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TMI Blog2012 (9) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... r such entities. The Assessing Officer while completing the assessment disallowed the deduction claimed u/s 80-IA(4) of the Act on the ground that the construction of water treatment plant by the assessee is a simple works contract and if at all deduction u/s 80-IA arises it would be only available for CMWSSB and not to the assessee who is doing only a simple works contract job. 3. The assessee carried the matter before the CIT(Appeals). It was submitted before the learned CIT(Appeals) that the assessee has fulfilled all the conditions as laid down u/s 80-IA(4) of the Act and the Assessing Officer without considering the provisions of sec. 80-IA(4) simply rejected the claim of the assessee. It was further submitted that merely because the construction contract refers to the assessee as a contractor or because of some basic specifications are laid down in the agreement, it does not detract the assessee from the position of being a developer nor will it debar from claiming the deduction u/s 80-IA(4) of the Act. The learned CIT(Appeals) after considering the submissions of the assessee held as under : " 6. I have considered the argument of the learned Authorised Representative. I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y contended by the learned Authorised Representative, the provisions of section 80IA(4) certainly allows deduction in respect of profit derived from development of infrastructure facility in the hands of the person who has constructed the infrastructure facility and the profits from operating and maintaining the said infrastructure facility. The bifurcation between development on the one hand and operating and maintaining on the other hand by the legislature and granting deduction for both such parties reveals the intention of law in plain words and as such I have to necessarily agree with the arguments of the learned Authorised Representative that the appellant being the developer of the infrastructure facility is to be held eligible for deduction u/s 80IA(4). The other factor viz., that the appellant has only executed a works contract, the appellant is just a contractor who simply executed the construction and therefore the appellant is precluded from claiming deduction u/s 80IA(4) does not also appear to be legally sustainable. The decision in the case of Patel Engineering Ltd., cited by the learned Authorised Representative directly supports the plea of the appellant. It has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the Mumbai 'I' Bench of the Tribunal in the case of The Indian Hume Pipe Co. Ltd. v. DCIT (2011-TIOL-518-ITATMUM). 5. On the other hand the learned counsel for the assessee has submitted that this case is covered by the decision of the Hon'ble Bombay High Court in the case of CIT v. ABG Heavy Industries Limited (322 ITR 323) (Bom). 6. We have heard both the sides, perused the records and gone through the orders of the authorities below. The issue involved in this appeal is whether the assessee is eligible for the deduction under section 80-IA(4) of the Act or not. According to the Assessing Officer the assessee company had constructed water treatment plant for CMWSSB and some private entities and as per the construction contract the assessee had simply executed works contract on job work basis for CMWSSB and therefore was denied the deduction u/s 80-IA(4) of the Act. In appeal the learned CIT(Appeals) simply following the order of the Tribunal in the case of Patel Engineering Ltd. (94 ITD 141) allowed the deduction claimed by the assessee under section 80- IA(4) of the Act. In the assessment order, the Assessing Officer has categorically given the finding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal position, and the assessee having merely executed the works contract for infrastructure development as awarded to him, we are of the considered view that authorities below rightly declined the deduction u/s 80IA to the assessee. We approve the conclusions arrived at by the CIT(A) and decline to interfere in the matter;" 9. In view of the facts and circumstances of the case and also following the decision of the co-ordinate Bench of this Tribunal in the case of The Indian Hume Pipe Co. Ltd. (supra), the assessee is not eligible for deduction under section 80-IA(4) of the Act. 10. The learned CIT(Appeals) simply followed the decision of the Tribunal in the case of Patel Engineering Ltd. v. DCIT (94 ITD 141), which has been followed in the case of ACIT v. Bharat Udyog Ltd. (24 SOT 412) also, and allowed the appeal of the assessee ignoring the Explanation inserted to sub-section (13) of section 80-IA by the Finance (No.2) Act, 2009. However, we find that the order of the Tribunal in the case of Patel Engineering Ltd. v. DCIT (supra) relied on by the learned CIT(Appeals) no more holds the field as an Explanation has been inserted to subsection (13) of section 80-IA by the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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