9911796707
TMI Blog2013 (9) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... pening of assessment and thereafter sustaining addition by the CIT(A) in respect of commission towards subcontract at 1% on the basis of audit objection. 3. The learned AR submitted that the original assessment in this case was completed u/s. 143(3) on 15.12.2006. Thereafter notice for re-assessment u/s. 148 was served on the assessee on 25.12.2011 on the basis of audit objection. He also submitted that the assessment was reopened to consider the amount of commission at 1% of on work executed by the subcontractor on contract receipt of Rs. 17,55,72,285, which worked out at Rs. 17,55,753. Further, he submitted that there is no fresh material for reopening the assessment. The Assessing Officer (AO) reopened the assessment only on the basis of materials what he has considered while passing the original assessment order u/s. 143(3) of Income-tax Act, 1961. According to the AR, there is no failure on the part of the assessee to furnish all material facts necessary for the purpose of assessment. He relied on the judgement of Supreme Court in the case of GKN Driveshaft (I) Ltd. vs. ITO (259 ITR 19). He also submitted that audit objection cannot be a reason for reopening of assessment. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had escaped assessment. The Assessing Officer in her affidavit did not deny this. In the affidavit what was vaguely stated was that the Department was apprehensive about the source of information on the basis of which such averments were made. Inter-departmental correspondence was strictly confidential. On a direction from the court the Revenue made a candid statement that the file containing exchanges between the Assessing Officer and the audit party was not traceable. The Revenue not having either denied the clear averments of the assessee made in the petition on oath nor having produced the original files to demonstrate the independent formation of opinion by the Assessing Officer though sufficient time was made available, the issue stood firmly concluded in favour of the assessee. The reassessment notice was not valid. (d) Rose Serviced Apartments Pvt. Ltd. & Anr. vs. DCIT (348 ITR 452) (Del) wherein held that an assessment cannot be reopened on a mere change of opinion; where there is no allegation that there was failure on the part of the assessee to disclose true and full facts, notice issued u/s. 148 after expiry of four years was not valid. 4. The DR relied on the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the foregoing proviso. Explanation 2: For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E;] (c) where an assessment has been made, but- (i) income chargeable to tax has been under assessed; or (ii) such income has been assessed at too Iowa rate; or (iii) such income has been made the subject of excessive relief under this Act; or (d) where a person is found to have any asset (including financial interest in any enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.]" 7. Being so, a period of four years from the end of relevant assessment year is normally the period during which the AO can issue a notice unless the case falls under clauses (b) and (c) of section 149 of the Act which gives extended period of 6 years from the end of the relevant assessment year. Now the argument of the AR before us is that the Department has no material to show that the income which is said to have been escaped is on account of failure on the part of the assessee so as to reopen the assessment when the original assessment was completed u/s. 143(3) of the Act. Provisions of section 147 prescribed that no action should be taken u/s. 147 after the expiry of four years from the end of the relevant assessment year, unless income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return u/s. 139 or in response to notice issued under subsection (1) of section 147 or sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT vs. Steel Cast Corporation (107 ITR 683) wherein it was held as under: "Held, It must be found out what is the subject- matter of the appeal and that can be determined only by finding out what the AAC expressly or impliedly decided. Implied decision means that though a point might have been raised before the AAC, in his final order the AAC might not have dealt with that point and thereby impliedly rejected it. That is an implied decision of the AAC and a party may be aggrieved by an express decision of the AAC or by an implied decision of the AAC. The subject-matter of appeal before the Tribunal can only be the decision express or implied of the AAC and the jurisdiction of the Tribunal is restricted to the subject-matter of appeal. In the instant case, the grievance of the assessee before the Tribunal was that, though the question of relief under s. 80J and 80J(3) was orally urged before the AAC in the course of arguments, the AAC in his order had not dealt with this point and had not granted any relief. If in fact such a contention was orally urged, the Tribunal, in the first instance, should have found out whether factually the ground of appeal before i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, in our opinion, it is appropriate to remit the issue to the file of the CIT(A) for consideration after taking note of the assessee's arguments as well as the decision cited supra and decide accordingly. This ground is allowed for statistical purposes. 14. The next ground in these two appeals is with regard to disallowance of liquidated damages. 15. The contention of the AR is that this expenditure pertains to liquidated damages as the same is charged by the contractee departments towards delay in execution and the same is not penal action by the contractee departments. Since recoveries are entirely based on commercial agreement and is not the statutory provision, the same cannot be disallowed. 16. The DR submitted that the above ground is not before the CIT(A) and the same is to be dismissed. 17. We have heard both the parties and perused the material on record. Admittedly this ground does not find place before the CIT(A). Accordingly, considering the plea of the DR, we are inclined to remit the issue back to the file of the CIT(A). This ground is partly allowed for statistical purposes. 18. The next ground is with regard to ad-hoc disallowance towards unvouched ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of depreciation. Against deletion of penalty, the Department is in appeal before us for A.Ys. 2003-04 and 2004-05. For sustaining penalty in respect of disallowance of depreciation, the assessee is in appeal before us for the same assessment years. The assessee also filed COs for these assessment years in support of deletion of penalty towards unvouched expenditure. 24. The assessee not pressed the COs in CO No. 15/Hyd/2013 and 16/Hyd/2013 and the same are dismissed as not pressed. 25. The learned AR submitted, with regard to sustaining of penalty on disallowance of depreciation, that the assessee claimed depreciation on plant and machinery taken on lease basis from M/s. IVRCL and paid monthly instalments as per lease agreement. He also submitted that after expiry of lease period, as per clause No. 7 of the lease agreement dated 30.3.2001 with effect from 30.9.2002, the assessee became the owner of the said plant and machinery. He drew our attention to clause No. 7 of the lease agreement which reads as follows: "7. TRANSFER OF OWNERSHIP: The machinery leased out as per schedule "A" hereto shall be transferred to Taher Ali on payment of Rs. 10,00,000/- (Rupees ten lakhs only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Had the assessing officer not conducted scrutiny and not added the amount in the assessment order, the assessee would have got away with its claim on depreciation which is not allowable. In addition it would also have claimed lease rentals on the same plant and machinery. The intent of the assessee was very obvious i.e., to artificially reduce their taxable income by making the claims towards depreciation which are not allowable. He submitted that the Tribunal has clearly brought out the facts in its order in ITA No. 843/Hyd/08 dated 21.01.2011 for A.Y. 2004-05 and drew our attention to the relevant portion of which is as under: "5 We have considered the rival submissions and perused the material available on record. With regard to the disallowance of expenditure amounting to Rs. 50 lakhs, we find that the department found that most of the payments paid by the assessee are by cash and no proper external vouchers are available for such payments. It is claim of the assessee that certain expenditure was incurred by M/s. IVRCL on behalf of the assessee and the same was debited to the account of the assessee as reflected in the ledger account. The assessee not produced any pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004-05 towards site expenses at Rs. 37,91,067, laying, jointing and carting at Rs. 2,85,13,377, welfare expenses at Rs. 17,83,567 and miscellaneous expenses at Rs. 12,74,829. Same is the position for the A.Y. 2003-04 and only change in the amounts. On verification of the books of account and the vouchers produced by the assessee indicated that a good part of those claims were only supported by vouchers and payments were made in cash. While the assessee received reimbursement of the expenditure from the subcontractors, at the same time it failed to keep proper record of the expenditure incurred by it for earning the income. The assessee also failed to give satisfactory explanation for non maintenance or non production of proper vouchers. The AO added a lump sum amount of Rs. 50 lakhs in A.Y. 2003-04 and Rs. 30 lakhs in A.Y. 2004-05 to the income of the assessee on account of unverifiable expenditure. The AR of the assessee also agreed to this addition and so penalty was levied u/s. 271(1)(c) of the Act and he prayed to confirm the penalty. 30. Regarding deletion of penalty, the AR relied on the order of the CIT(A). 31. We have heard both the parties and perused the material on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yd/2013 and 130/Hyd/2012 are allowed on this issue. 34. Regarding levy of penalty on ad-hoc disallowance of expenses like jointing, labour, supervision charges, site preparation, etc., this was disallowed on the reason that the expenditure was not properly vouched and the disallowance of expenditure is on ad-hoc basis. There is no conclusive proof that the assessee has furnished inaccurate particulars of income or concealed the particulars of income. The assessee was not able to file all vouchers and bills and that led to disallowance and the lump sum disallowance was made on estimate basis which cannot be a reason for levy of penalty. The AO could not point out which item of expenditure was not verifiable. Had the AO pinpointed the particular expenditure that is not verifiable then the case will be different. The Assessing Officer without examining the recipients of the payments, it is not appropriate to come to the conclusion that the assessee has concealed any particulars of income or furnished inaccurate particulars of income. The penalty proceedings are quasi criminal proceedings and the consideration that arise in penalty proceedings are different from those arising in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s. 80IA and completed the assessments. Hence, these appeals were filed by the assessee for these assessment years before the CIT(A). For the assessment years 2008-09 and 2009-10, by following the earlier year assessments and to maintain continuity, the Assessing Officer completed the assessments by disallowing deduction u/s. 80IA. Aggrieved with this also, the assessee filed appeals for these two A.Ys. i.e., A.Ys. 2008-09 and 2009-10. On appeal, the CIT(A) allowed the claim of the assessee u/s. 80IA of the Act. Against this, the Revenue is in appeal before us. 38. We have heard both the parties and perused the material on record. We find similar issue was considered by this Tribunal in Sushee Hitech Constructions Pvt. Ltd. for A.Ys. 2005-06 to 2007-08 in ITA Nos. 269/Hyd/2009, ITA No. 1165/Hyd/2009 and ITA No. 1171/ Hyd/2010 respectively vide order dated 16.3.2012. The Tribunal by the said order decided the issue in the following manner- "31. Findings: We have considered the elaborate submissions made by both the parties and also perused the materials available on record. We have also gone through all the case laws cited by both the parties. We find that the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee should have been the owner of the infrastructure facility. 33. The next question is to be answered is whether the assessee is a developer or mere works contractor. The Revenue relied on the amendments brought in by the Finance Act 2007 and 2009 to mention that the activity undertaken by the assessee is akin to works contract and he is not eligible for deduction under section 80IA (4) of the Act. Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen from the agreements entered into by the assessee with the Government. We find that the Government handed over the possession of the premises of projects to the assessee for the development of infrastructure facility. It is the assessee's responsibility to do all acts till the possession of property is handed over to the Government. The first phase is to take over the existi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. The circular issued by the Board, relied on by learned counsel for the assessee, clearly indicate that the assessee is eligible for deduction under section 80IA (4) of the Act. The department is not correct in holding that the assessee is a mere contractor of the work and not a developer. 34. We also find that as per the provisions of the section 80IA of the Act, a person being a company has to enter into an agreement with the Government or Government undertakings. Such an agreement is a contract and for the purpose of the agreement a person may be called as a contractor as he entered into a contract. But the word "contractor" is used to denote a person entering into an agreement for undertaking the development of infrastructure facility. Every agreement entered into is a contract. The word "contractor" is used to denote the person who enters into such contract. Even a person who enters into a contract for development of infrastructure facility is a contractor. Therefore, the contractor and the developer cannot be viewed differently. Every contractor may not be a developer but every developer developing infrastructure facility on behalf of the Government is a contractor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee at present has undertaken huge risks in terms of deployment of technical personnel, plant and machinery, technical know-how, expertise and financial resources. Further, the order of Tribunal in the case of B.T. Patil cited supra is prior to amendment to sec 80IA(4), after the amendment the section 80IA(4) read as (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility, prior to amendment the "or" between three activities was not there, after the amendment "or" has been inserted w.e.f. 1-4-2002 by Finance Act 2001. Therefore, in our considered view, the assessee should not be denied the deduction under section 80IA of the Act as the contracts involves, development, operating, maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract. In our opinion the contracts which contain above features to be segregated and on this deduction u/s. 80-IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitle for deduction u/s 80IA of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further in the case of R.R. Constructions, the Chennai Bench of the Tribunal in its order dated 3.10.2011 in I.T.A. No. 2061/Mds/2010 for assessment year 2007-08 held as follows: "3. We have heard rival submissions and have carefully perused the entire record. The first issue of the appeal is regarding claim of deduction under section 80IA(4) of the Act. The case of the revenue is that the assessee is a 'works contractor' and not a 'developer' as stipulated under section 80IA(4) of the Act. The section 80IA(4) applies to any enterprise, which carries on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facilities, which fulfil all the above conditions. There cannot be any question of providing a condition for such an enterprise to start operating and maintaining the infrastructure facility on or after 01.04.1995. From the assessment year 2000-01, deduction is available if the assessee is carrying out the business of any one of the above mentioned three types of activities. When an assessee is only developing an infrastructure facility project and is not maintaining nor operating it, obviously such an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Bombay Bench of ITAT while deciding the case of Patel Engineering Ltd. vs. DCIT in ITA No.1221/Mum/2004 has gone to the extent of holding that the assessee, a civil contractor, having executed a part of contracts of irrigation and water supply on 'build and transfer' basis and handed over them to contractee Governments, was eligible for deduction under section 80IA(4). 5. We have also taken a similar view in ITA No. 554/Mds/2010 in the case of East Coast Constructions & Industries Ltd v. DCIT vide order dated 13.09.2011 and relevant paras from 9 to 14 are reproduced hereunder: "9. After considering the rival submissions, we can safely say that the benefit of section 80IA is available only to a 'developer' who carries on business of 'developing of infrastructure facility'. A person who enters into contract with another person for executing 'works contracts' is not eligible for such a benefit. Explanation to section 80IA was inserted by Finance Act, 2007 with retrospective effect from 1.4.2000 which has further been amended by Finance (No. 2) Act, 2009 with retrospective effect from 1.4.2000. The amendment in this Explanation was necessitated due to contrary judicial dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly work contracts and only those who make the development work will be eligible for tax benefit u/s 80IA of the Act. Be that as it may, when we apply this provision in its letters and spirit, we find that this assessee is verily eligible for deduction u/s 80IA, as the assessee-company fulfils all the relevant conditions. The facts of this case go to prove that the assessee is a 'developer' of infrastructure facilities. The reasons for our above conclusion are given in the following paras. Firstly, the assessee-company not only designs but also creates new products. The assessee had undertaken four projects during the relevant year and executed, constructed, delivered and maintained by it. As per the definition of Advanced Law Lexicon [placed at page 533 of the paper book] "Developer" means - a person engaged in development or operation or maintenance of Special economic Zone, and also includes any person authorized for such purpose by any such developer. The "works contract" means an agreement in writing for the execution of any work relating to construction, repair, or maintenance of any building or superstructure, dam, weir, canal, reservoir, tank, lake, road, well, bridge, culv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who executes a works contract entered into with the undertaking or enterprise referred to in the said section. Thus, in a case where 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 under section 80- lA. In contrast to this, a person who enters into a contract with another person (i.e., undertaking or enterprise referred to in section 80-IA) for executing works contract, will not be eligible for tax benefit under section 80- IA. This amendment will take retrospective effect from April I, 2000 and will accordingly apply in relation to the assessment year 2000-01 and subsequent years." It is made abundantly clear that the prescription of section 80- IA shall not apply to a person who executes work contracts entered into with an undertaking or enterprise. Thus, in a case where a person who makes investment and himself executes development works and carries out civil works, will be eligible for tax benefit under section 80- IA of the Act. In contrast to this, a person who enters into a contract with another person for executing works contract will not be eligible for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n enterprise carrying on the business of (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining any infrastructure facility' which fulfils certain conditions. Those conditions are (I) ownership of the enterprises by a company registered in India or by a consortiums; (II) an agreement with the central or State Government, local authority or statutory body; and (III) the Start of operation and maintenance of the infrastructure facility should commence after 1st April, 1995. The requirement that operation and maintenance of the infrastructure facility should commence after 1st April, 1995 has to be harmoniously construed with the main provision under which deduction is available to an assessee who develops or operates and maintains, or develops, operates and maintains an infrastructure facility". A harmonious reading of the provisions in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops, or operates and maintains; or (iii) develops, maintain and operates that infrastructure facility. However, the commencement of the operation and maintenance: of the infrastructure facility should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'developer'. In fact, in every development the term 'developer' will definitely be a 'works contractor' but every works contractor may not be a 'developer'. A 'developer' is a specific kind of works contractor to be eligible for deduction u/s 80IA(4) who fulfils all the conditions namely, if the assessee develops the infrastructure facility if it operates the infrastructure facility and if it maintains the infrastructure facility or to put it in simpler terms, the harmonious reading of the provisions in its entirety would lead to the conclusion that this deduction is available to an enterprise who - develops or operates and also maintains; or develops, maintains and operates that infrastructure facility. The provision for giving the impugned incentives has been examined, re-examined, modified and amended after giving conscious and deliberate discussions by the concerned law makers. To our great chagrin even after this conscious exercise an entity who executes the works contract entered into between local authority/Central or State Government and makes a development of an infrastructure has not been excluded from the scope of this provision. And rightly so, because what infrastructu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating and maintaining the same, is entitled to the benefit of deduction u/s 80IA(4). A copy of this decision is enclosed at page 139 of the paper book. In the case of Patel Engineering Ltd vs Dy. CIT, 84 TTJ (Mumbai) 646 [copy enclosed at page No. 145 of the paper book], it has been held that a person, who enters into a contract with another person will be treated as a 'contractor' undoubtedly; and that assessee having entered into an agreement with the Government of Maharashtra and also with APSEB for development of the infrastructure projects, is obviously a contractor but does not derogate the assessee from being a 'developer' as well. The term 'contractor' is not necessarily contradictory to the term 'developer'. On the other hand, rather section 80IA(4) itself provides that assessee should develop the infrastructure facility as per the agreement with the Central Government, State Government or a Local Authority. So, entering into a lawful agreement and thereby becoming a contractor should in no way be a bar to the one being a 'developer'. The assessee has developed infrastructure facility as per the agreement with Maharashtra Government/APSEB, therefore, merely because in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITD 336 and Patel Engineering Ltd vs Dy. CIT, 84 TTJ 646, are relevant. As per Circular No. 4/2010[F.No. 178/14/2010-ITA-I] dated 18.5.2010, widening of existing roads constitutes creation of new infrastructure facility for the purpose of section 80IA(4)(i). The assessee is not required to develop the entire road in order to qualify for deduction u/s 80IA as has been held by the Hon'ble Bombay High Court in the case of CIT vs ABG Heavy industries Ltd, 322 ITR 323. The newly inserted Explanation 2 to section 80IA vide Finance Act, 2007, does not apply to a works contract entered into by the Government and the enterprise. It applies to a work contract entered into between the enterprise and other party 'the sub-contractor'. The amendment aims at denying deduction to the sub contractor who executes a work contract with the enterprise as held by the ITAT, Jaipur 'A' Bench in the case of Om Metal Infra projects Ltd vs CIT-I, Jaipur, in I.T.A. No. 722 & 723/JP/2008 dated 31.12.2008. The reliance by the ld. CIT(A) on the decision of ITAT, Chennai Bench in the case of ACIT vs Indwell Lianings Pvt. Ltd, 313 ITR(AT) 118, has been enlarged in its finding by the ITAT, Mumbai 'F' Bench in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The CIT(A) confirmed the order of the Assessing Officer. Matter was carried before the ITAT. However, while passing the order, the Judicial Member and the Accountant Member differed. While the Judicial Member accepted the claim of the assessee, the Accountant Member did not agree. Accordingly, under provisions of section 255(4) of the Act the matter was referred to the Third Member. The issue in question pertains to A.Y. 2000-01 and 2001-02 The appeals were heard by the Third Member. However, while giving its opinion as per the provisions of section 255(4) of the Act the Third Member was of the opinion that the said matter ought to be heard by the Larger Bench of third Member i.e. a bench comprising of three members u/s. 255(4) of the Act. The matter was heard at length by the Larger Bench of the Third Member and they agreed with the Accountant Member. They were of the opinion that the assessee is not entitled to deduction u/s.80IA(4) of the Act. The said matter was referred back to the Division Bench of the Tribunal to give effect in conformity with the opinion of the Third Member as per the provisions of section 255(4) of the Act. 2. The said appeals were pending befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected the Tribunal to consider the decision of the ABG Heavy Industries and other decisions while passing their order giving effect to the opinion of the Third Member as per the provisions of section 255(4) of the Act. The relevant portion of the said order of Hon'ble jurisdictional High Court in ITXA No.1307 of 2011 for A.Y. 2000-01 and 1640 of 2011 for A.Y. 2001-02 is as under: "1. Since the Tribunal has recalled the impugned order dated 23.03.2011, the appellant is withdrawing its appeal. 2. Further, while considering the matter afresh, the Tribunal will take into consideration all decisions including the decision of this court in the matter of CIT v. ABG Heavy Industries Ltd. reported in 322 ITR page 323. All contentions are kept open. 3. The appeal is dismissed of in above terms." 6. The issue before us is whether the Tribunal while complying with the provisions of section 255(4) of the Act can consider the judgment of the Hon'ble High Court in the case of ABG Heavy Industries. In light of the clear directions given by the Hon'ble Bombay High Court in the appeals filed by the assessee for the impugned assessment years inter alia directed the Tribunal to consider the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which the deduction is available. Thus, jurisdictional High Court held that the amendment of Finance Act 2001 of inserting 'or' between 'developing' and 'Maintaining & operating' is clarificatory in nature to cure the ambiguity of the amendment of Finance Act, 1999 and therefore such amendment will be applicable retrospectively from the A.Y. 2000-01 & onwards. In order to be eligible for deduction the assessee should develop the infrastructure facility as a whole and not in a particular part of it. We find that Hon'ble Bombay High Court in the case of ABG Heavy Industries has observed as under: "The assessee did not have to develop the entire project in order to qualify for a deduction under s. 80-IA. The Parliament did not legislate a condition impossible of compliance." 8. In the case of ABG Heavy Industries (supra), the assessee therein had not developed the entire port but was only the supplier of cranes at the loading and unloading terminal at the said JNPT port. Thus assessee was not required to execute the entire project as observed by the Third Member. Another significant word used here is "owned", which indicates that the infrastructure facility should be owned by a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal is no longer good law. More specifically in light of the observations made by the Hon'ble Bombay High Court in the case of ABG Heavy Industries Limited and while giving the effect as per provisions 255(4) of the Act the Hon'ble Tribunal was clearly directed to consider the said decisions and allow the deduction u/s. 80IA of the Act for all the projects undertaken by the assessee. 11. The assessee Company has been included as a sub contractor for the all the other projects either the contracts are directly in the name of assessee company or in the name of the joint venture enterprise. The assessee has undertaken the work on Back to Back Agreement concept under sub contract from Patel Engineering Company Limited (hereinafter referred to as PEC) vide Sub-Contract Agreement dated 15.10.1992 for construction of Tunnel which supplies the water form River Koyna and makes it available to Power House. In fact the assessee and PEC had proposed a joint venture to the relevant authorities for the Execution of the said project. As the project was being financed by World Bank the relevant authorities forwarded the proposal to World Bank. World Bank however did not accept the proposal but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute and which effectuate the object of the legislation. The provisions or promoting economic growth should be interpreted liberally and the restriction on it too has to be construed so as to advance the objective of the provisions and not to frustrate it. If the facts of the case were put within the above parameter, the assessee, though it not entered into an agreement with the State Government at the initial stage, had obtained the tender/contract by virtue of a valid assignment, which was duly recognised by the State Government. Therefore, it should be deemed to have entered into an agreement with the State Government for construction of the said bridge on BOT basis. It was not the case of the revenue that the entire expenditure incurred in the construction of the aforesaid bridge was not borne by the assessee but by "A ", the main tenderer. " The revenue had rejected the claim of the assessee for the simple reason that the assessee had never entered into any contract with the State Government and the assessee- company was nothing but a colourable device to evade tax. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Joint Venture firm in turn issued R.A. bills to the owners. Joint Venture firm had not executed any portion of work under the Project. The Joint Venture firm has filed its Return of Income with NIL Profit or Loss. In fact the work completion certificate issued by Project Authorities is in favour of the assessee company only and not in favour of Joint Venture, also the whole amount of initial security deposit, the Bank guarantees were given by the assessee company only in the name of the assessee and not by the Joint Venture, as the joint Venture partner is in no way connected with the execution of the work and to that effect it had already submitted necessary instrument like "Assignment Deed, "Power of Attorney", Undertaking with Bankers etc. 14. In this background, the assessee could certainly claim the deductions under the provision of Section 80IA. One has to see the substance and not the Form Essentially, though it was a Joint Venture, it was converted into assessee's venture. The Other Venturer withdrew and the entire work was executed by the assessee though in the name of Joint Venture. The Joint Venture is nothing but the venture of the assessee company and the other perso ..... 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