9911796707
TMI Blog2013 (4) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that - We find that the assessee has filed sufficient evidence before the CIT(A) to prove his case that it is party to the consortium, which was engaged in the business of civil construction and was also awarded the contract by the NHAI. Thus, we are satisfied that the assessee has itself carried on the works contract and was not a sub-contractor carrying on the works contract. Further, as rightly held by the CIT(A), every year the assessee cannot be expected to enter into a new contract for the reason that the infrastructure project are by the very nature carried on over a period of time and cannot be completed within a year. Thus, the CIT(A) has properly appreciated the evidence before allowing the claim of the assessee and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the profit and loss account. He further observed that the assessee has undertaken sub-contract works from M/s ECSB-JSR Constructions (JV) Private Limited and received income of Rs.26,55,66,961/- (as per the TDS certificates) and has received the remaining balance of Rs.24,16,95,998/- from the other contract works undertaken by the assessee company. He observed that the deduction u/s 80IA of the Act would not be available to a person who executes a works contract entered into with an undertaking or enterprise as the case may be. As the assessee has undertaken the sub-contract works with the joint venture of M/s ECSB-JSR Construction Private Limited, he held that the assessee company is not eligible to claim deduction u/s 80IA of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he attention of the CIT(A) to the Explanatory Memorandum to the Finance Bill, 2007 reported in 289 ITR 312 (St.) wherein clarification regarding 'Developer' with reference to infrastructure facility, industrial park etc. for the purpose of section 80IA of the Act was given stating that when a person makes the investment and himself executes the development work, i.e. carries out the civil construction work, he will be eligible for tax benefit u/s 80IA of the Act. 5. After considering the assessee's submissions at length and also after going into the joint venture agreements and the consortium agreement between M/s ECSB and the assessee and the other agreements, such as, the agreement with National Highway Authority of India etc., the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsortium that bid for and was awarded the contract in question and it is only thereafter that the JV Company had come into existence and the sub-contract was entered into. Thus, according to him, the assessee has fulfilled the conditions prescribed u/s 80IA of the I T Act and the assessee is eligible for deduction thereunder. As regards the AO's observation that the contract is not new, he observed that the term 'new' is meant to ensure that the deduction is available to entities that are contributing by adding to the country's infrastructure and it cannot be taken to mean that in order to avail the deduction, the assessee need to enter into new agreement every year as infrastructure projects by their very nature, generally have implementa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) to prove his case that it is party to the consortium, which was engaged in the business of civil construction and was also awarded the contract by the NHAI. It was also proved that the assessee has invested the entire capital for completion of the contract and so it was entitled to receive the entire contract receipts. In such a case, we are satisfied that the assessee has itself carried on the works contract and was not a sub-contractor carrying on the works contract. Further, as rightly held by the CIT(A), every year the assessee cannot be expected to enter into a new contract for the reason that the infrastructure project are by the very nature carried on over a period of time and cannot be completed within a year. The main aim o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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