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TMI Blog2014 (7) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 80 IA(4) - assessee is entitled for deduction u/s 80 IA(4) - CIT(A) has held that assessee is not entitled to get deduction u/s 80 IA(4) – thus, the assessee is entitled for deduction u/s 80 IA(4) in respect of A.Y. 2004-05 and 2005-06 – Decided in favour of assessee. - ITA No. 7398/Mum/2011 - - - Dated:- 25-6-2014 - Shri I. P. Bansal, JM and Shri Rajendra, AM,JJ. For the Appellant : Shri Rajiv Khandelwal /Neelkant Khandelwal For the Respondent : Ms. Neeraja Pradhan ORDER Per I. P. Bansal (JM) : This is an appeal filed by the assessee. It is directed against the order passed by Ld. CIT(A)-1, Thane dated 28/2/2011 for assessment year 2008-09. Grounds of appeal read as under: 1.On the facts and in the circumstances of the case and in law the learned CIT(Appeal) erred in: i) Upholding the AO s action in disallowing the appellant s claim for deduction u/s. 80IA of ₹ 1,00,47,579/-. ii) Not accepting the appellant J.V s contention that it is entitled to claim the deduction for infrastructure facilities as laid down in section 80 IA. iii) Not deleting the interest levied u/s. 234B 2. The appeal is time barred by 144 days. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee. 5. So far as it relates to the issue raised by the assessee in Ground No.1(i) (ii) we found that in assessee s own case for A.Y 2007-08 vide order dated 20/06/2014 in ITA No.7885/Mum/2010 we have held that assessee is entitled to get deduction under section 80IA(4) of the Act. Accordingly, following the order of the Tribunal in which both of us are party, we direct the AO to allow deduction under section 80 IA to the assessee. The relevant portion of the said order is reproduced below: 10. We have heard both the parties and their contentions have carefully been considered. We have carefully gone through the assessment order for A.Y 2004-05 which is the base year for which the assessee is claiming that it is entitled to get deduction under section 80 IA(4). The first and foremost objections of the AO is that assessee, while executing the project, had acted in the capacity of a contractor, therefore, the deduction cannot be allowed to the assessee as pre-requisite of the section to enable the assessee to claim deduction is that he should be a developer. 10.1 The second contention of AO is that assessee has only built some part of the project and it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments namely the cranes in question. Their Lordships in para-17 have observed that the obligations which have been assumed by the assessee under the terms of the contract are obligations involving the development of an infrastructure facility. Section 80 IA(4) of the Act essentially contemplated a deduction in a situation where an enterprise carried on a business of developing, maintaining and operating infrastructure facility. A port was defined to include within the purview of the expression infrastructure facility . The obligations, which the assessee assumed under the terms of the contract were not merely for supply and installation of the cranes but involved a continuous obligation from the supply of the cranes to the installation, testing, commissioning, operation and maintenance of cranes for a term of 10 years, after which the cranes were to vest in JNPT free of cost. The assessee did not have to develop the entire port in order to qualify for deduction under section 80 IA(4). Parliament did not legislate a condition impossible of compliance. 10.3 If the facts of the present case are to be examined in the light of aforementioned decision of Hon ble Bombay High Court, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under section 80 IA(4) it is necessary for an assessee not only to develop the project but also to operate and maintain the infrastructure facility. This issue is also no more res-integra and is covered by the aforementioned decision of Hon ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd. (supra). In that case it was the contention of the Revenue that for assessment year 1997- 98 and 1998-99, it was necessary for the assessee to cumulatively fulfill the requirement of developing, operating and maintaining infrastructure facility. It was pleaded by the Revenue that, even if it be held to have developed the facility it cannot be regarded as operating the facility. Their Lordships have referred to such contention of Revenue in para-19 of the decision and they observed that it is not possible to accept such submissions. Their Lordships have observed that it has already been noted that assessee had as a matter of fact developed the facility. Their Lordships after considering the provisions and various circulars of CBDT and also the judicial pronouncements have concluded in para-22 of the decision that after section 80IA was amended by Finance Act, 2001, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 2001 would be defeated. A harmonious reading of the provision in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii) operates and maintains; or (iii) develops, maintains and operates that infrastructure facility. However, the commencement of the operation and maintenance of the infrastructure facility should be after 1-4- 1995. In the present case, the assessee clearly fulfilled this condition( emphasis ours). 23. In the view which we have taken, all the assessment years in question to which this batch of appeals relates would be governed, by the same principle. The subsequent amendment of section 80-IA(4A) of the Act to clarify that the provision would apply to an enterprise engaged in (i) developing; or (ii) operating and maintaining; or (iii) developing, operating and maintaining an infrastructure facility was reflective of a position which was always construed to hold the field. Before the amendment that was brought about by Parliament by the Finance Act of 2001, we have already noted that the consistent line of circulars of the Board postulated the same position. The amendment made by Parliament to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 323. All contentions are kept open. 3. The appeal is dismissed of in above terms. 10.8 In the order the Tribunal after considering the decision of Hon ble Bombay High Court in the case of CIT vs. ABG Heavy Industries Ltd. (supra) has decided the issue in favour of assessee. While deciding the present appeal vide order dated 9/2/2010 it was found by the Tribunal that both sides were in agreement that the facts and circumstances are mutatismutantis similar to those considered by the Larger Bench of the Tribunal in the case of B.T.Patel Sons Belgaun Construction Pvt. Ltd.(supra). The said order of the Tribunal was recalled only for the reason that the Larger Bench decision in the case of M/s. B.T.Patel Sons Belgaum Construction Pvt. Ltd.(supra) was no more good law in view of subsequent decision of Hon ble Bombay High Court in the case of CIT vs. ABG Heavy Industries (supra). The order in the case of present assessee was not recalled for the reason that there is any difference in the facts and circumstances of the present case and the decision in the case of B.T.Patel Sons Belgaun Construction Pvt. Ltd.(supra). Now the decision of Larger Bench is no more good law and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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