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TMI Blog2017 (12) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... s, we are of the view that the AO was right in law in granting the assessee the benefit of deduction u/s. 801A(4) of the Act. See ARSS Infrastructure Projects Ltd. Versus ACIT [2014 (1) TMI 847 - ITAT CUTTACK ] Also this Tribunal in assessee’s own case for A.Ys 2008-09, 2009-10, 2010- 11 and 2007-08 [2017 (6) TMI 776 - ITAT KOLKATA] held that assessee is a developer vide order dt. 07-10-2016. Also see case of M/s. GVPR Engineers Ltd &Ors [2012 (4) TMI 149 - ITAT HYDERABAD ] - Decided against revenue - ITA No.691/Kol/2016 - - - Dated:- 6-12-2017 - Shri Waseem Ahmed, Accountant Member And Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri Saurabh Kumar, Addl. CIT-DR For The Respondent : Shri Ravi Tulsiyan, FCA ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-9, Kolkata dated 29.01.2016. Assessment was framed by DCIT, Circle-33 Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 23.12.2014 for assessment year 2012-13. The grounds raised by the Revenue per its appeal are as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (page 23, para 7.1.4(f). ( iii) Superintendence: In addition to labour and technical assistants (see page 32) the assessee was to provide overall superintendence during the execution of Works. (para 11.1, page 31) ( iv) Safety Security of the site: The assessee was responsible for the safety and security of the project site. In this regard, it was to : comply with all environmental requirements under environmental laws and regulations. (page 34) provide fencing lighting and guarding (page 36, para 13.S) ( v) Risk: The assessee was responsible for the care of the Works and materials, goods and equipment etc., which were at its risk. (page 36, para 14.1) vi) Licenses, permissions etc.: The assessee was to procure and maintain as necessary, appropriate proprietary rights, licenses, agreements and permissions for materials, processes and systems used in the Project [page 23, para 7.1.4 (b)] ( vii) Strengthening of bridges: The assessee was responsible for and was to pay the cost of strengthening any bridge or altering or improving any road communication necessary for smooth execution of works (page 3S, para 16.2) ( viii) Electricity, W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e portion of the said order is reproduced below:- 8. Heard rival submissions and perused the material available on record. We find that the only question is to be decided by us for allowance of deduction u/s. 80IA of the Act as to whether the assessee is a developer or a works contractor. The AO found that the assessee claimed TDS credit of the amounts deducted by the project authority and thereby he held that the assessee is not a developer and is a works contractor. Now we may refer to the consolidated order dt:18-06-2013 of the Coordinate Bench in identical case supra , wherein it considered the order of ITAT Hyderabad in the case of M/s. GVPR Engineers Ltd Vs. ACIT. Relevant portion of which is reproduced herein below:- the co-ordinate bench ITAT, Hyderabad B Bench, Hyderabad in the case of M/s. GVPR Engineers Ltd Ors in ITA Nos. 347/Hyd/2008 17 Others dated 29.02.2012, wherein in paras 26-29, it has been held as under:- 26. 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 Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee should have been the owner of the infrastructure facility. 28. 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 801A (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. 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 801A (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. 29. We also find that as per the provisions of the section 801A 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (13) brings in the nature of work as a works contract. The provisions of section 194C, which deals with TDS in respect of payment to contractors for carrying out any work in the Explanation thereto as explained the term work to be an inclusive definition, but has provided an exclusion to be does not include manufacturing or supplying of a product. according to requirement or specification of the customer by using materials purchased from a person, other than such customer . Thus, with this in mind, a perusal of the turnkey contract agreement entered into by the assessee with the Irrigation Department, Govt of A.P clearly shows that the construction of all the structures of the whole canal system is to be as per approved design, drawings, specifications of the department etc. The survey is to be done as per investigation and designing criteria of the Irrigation Department. This is also as per article 11.1 of the agreement. The assessee is to procure the materials independently and those materials are to confirm to the specifications provided. The assessee is also to make its arrangements for storage of the materials. This is as per article 107 of the agreement. Thus, admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of development of railway tracks and bridges thereof as also roads. If, we are to accept the contention of the Ld. CIT that the provisions of section 801A(4) of the Act after the substitution of the explanation to section 8OIA of the Act was introduced was only for the purpose of giving the benefit to BUT contracts then, the explanation to section 801A(4) of the Act becomes otiose. This is as explanation to section 801A(4) of the Act specifically provides for the road to include a toll road, a bridge or a rail system. BUT contract in respect of the railway system can never exist. Further, a perusal of the provisions of section 801A of the Act shows that the term works contract is not defined in the said section. However, the terms works and contract is defined in the provisions of section 194C of the Act. If a particular word or term is not defined in the specific section then, one could go to other sections in the said Act where the definition would be available to draw a meaning to the said terms. In the provisions of section 194C of the Act, work has been given an inclusive definition but in the subsequent portion it has excluded the manufacturing or sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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