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TMI Blog2014 (10) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... ela, by Delhi Development Authority (DDA), on the terms and conditions contained in the order for which our attention was invited to pages 27 to 38 of the paper book. It was submitted that as per the work execution it includes planning, designing, soil testing, earth filling, civil work including its electrification, infrastructure and services like sewerage, drainage, street lighting, roads, water supply, horticulture, landscaping etc. The assessee was argued to be responsible for complete development, thus it was not simplicitor execution of work contract rather complete development of the project, therefore, the assessee is entitled to deduction u/s. 80IB /80IA. It was further submitted that the project was to be developed till the stage of fit for habitation without any additional cost with all services. It was explained that before taking up the work the lay-out plan as well as building plan and structural design etc. were to be got approved from DDA/competent authority. The ld. Counsel further submitted that even the whole planning was done by the assessee and further asserted that the assessee is a creator of this facility, purchased own material having entire risk qua the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round that the assessee is not a developer of the project and merely worked as a contractor and placed reliance upon the decision of the Tribunal in the case of M/s. B.T. Patil and Sons, Belgaum Constructions (P) Ltd. vs. ACIT (2010) 35 SOT 171 wherein it was held that the claimed deduction is allowable only to the enterprise which is engaged in developing the infrastructure projects. On appeal, the ld. CIT(A) affirmed the stand of the AO, resultantly, the assessee is in appeal before this Tribunal. 3.1 Before coming to any conclusion we are reproducing hereunder the relevant provisions of the Act for ready reference and its analysis with respect to the facts of the present appeals:- "80IA (4A) This sec. applies to any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility which fulfils all the following conditions namely :- (i) the enterprise is owned by a company registered in India or by a consortium of such companies; (ii) the enterprise has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing, maintaining and operating a new infrastruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r & equipment in it, laying of H.T. cables, L. T. network service cables etc. and making the units complete and habitable including watch & ward for 3 (three) years from the date of recorded completion. This scope of work given in the NIT is only indicative and not exhaustive. The agency shall be responsible for execution of all items required for completing these houses in all respects to make these units habitable and ready for occupation as well as functioning of all services, making environment -fit for habitation without any additional cost, complete as per direction of the Engineer-in-charge iii) The Flats will be maintained till these are handed over to the Engineer-in- charge in good conditions and free from all defects. iv) The services will be handed over to the various local bodies after its completion as per approved plans, etc. as stated in the NIT also. v) Before taking up the work, the layout plans as well as building plans, structural designs etc. are to be got approved from DDA/competent Authority as mentioned in the NIT by adhering to the time schedule laid down in the NIT vi) The agency will also be responsible for getting the fire fighting arrangements, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earth and soil- testing etc., therefore, the assessee cannot be said to be a contractor simplicitor. e) As per the conditions after complete development of the project meaning thereby the units and other facilities includes watch and ward for 3 years from the date of completion of the project, and the assessee shall be responsible for execution of all items required for completing the project in all respect along with all services without any additional cost. And not only this all the services was to be handed over to the local bodies after its completion as per approved plans. All these terms & conditions are clearly indicative of the fact that the assessee is not a contractor rather a developer because it is not the case that part of the work was completed by different persons rather, it was completed/developed in all respects by the assessee itself. 3.4. Now we are expected to analyze the aforementioned provisions of the Act. Sub-section (10) to sec. 80IB of the Act speaks about an undertaking developing and building housing projects approved before a specified date by the local authority and, if the conditions are fulfilled, then the profit derived therefrom shall be 100% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify that in order to avail a deduction the assessee should (i) develop or (ii) operate and maintain or (iii) develop, operate and maintain the facility. Parliament eventually stepped into to clarify that it was not invariably necessary for a developer to operate and maintain the facility. Even the Hon'ble Apex Court in Bajaj Tempo vs. CIT (196 ITR 188) emphasized that a provision in a taxing statute granting incentive for promoting growth and development should be construed liberally. After sec.80IA was amended by the Fin. Act of 2001 the Section applies to an enterprise carrying on the business of (a) developing or (b) operating and maintaining or (c) developing, operating and maintaining any infrastructure facility subject to fulfillment of certain conditions. Thus, the provision has to be construed harmoniously. While coming to a particular conclusion the Hon'ble Apex Court considered the decision in allied Motors Pvt. Ltd. vs. CIT (224 ITR 677)(SC)(para-23), CIT vs. Alom Extrusions Ltd. (319 ITR 306)(SC)(para-23). It is noteworthy that the Pune Bench of the Tribunal in the case of M/s. Pratibha Constructions & Engineers (I) P. Ltd. (supra), on identical fact deliberated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the assessee clearly fulfilled this condition." Before the amendment that was brought about by Parliament by Finance Act, 2001 we have already noted that the consistent line of circular of the Board postulated the same position The amendment made by Parliament to S. 80IA(4) of the Act, set the matter beyond any controversy by stipulating that the three conditions for development, operation and maintenance were not intended to be cumulative in nature." (underlined for emphasis by us)." 3.6. So far as, the contention of the Revenue that the assessee is not the owner of the project. We note that the section nowhere put a condition that for claiming deduction under these sections necessarily the assessee has to be the owner of the project. This is not the intention of the legislature otherwise nothing prevented it to include such clause at the time of legislating/inacting the provision. If the contention of the ld. DR is accepted then whole purpose of inacting such provision and consequent development of infrastructure will be defeated. 3.7. Identically, in the case of Mahalaxmi Constructions (ITA No.433/PN/2007 order dt 6/2/12 the decision in the case of B.T. Patil an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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