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TMI Blog2019 (4) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, in our opinion, has rightly held that the Proviso does not require that there should be a direct agreement between the transferee enterprise and the specified authority for availing the benefit under Section 80IA of the Act. There is no dispute before us that the Assessee was duly recognised as transferee or assignee of the principal contractor M/s.ST-CMS Company Private Limited and was duly so recognised by the Railways to operate and maintain the said railway sidings at Vadalur and Uthangalmangalam Railway Stations. The findings of fact with regard to the said position recorded by the learned Tribunal are, therefore, unassailable and that clearly attracted the first Proviso to Section 80IA(4) of the Act. - Decided in favour of assessee. - Tax Case Appeal No.283 of 2010 - - - Dated:- 12-3-2019 - Dr. Justice Vineet Kothari And Mr. Justice C.V. Karthikeyan For the Appellant : M/s.T.R.Senthilkumar Senior Standing Counsel For the Respondent : Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan JUDGMENT DR.VINEET KOTHARI,J. The Revenue has filed this Appeal under Section 260-A of the Income Tax Act, 1961, raising the following substantial ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (i) of subsection (4), the provisions of this sub-section shall have effect as if for the words fifteen years , the words twenty years had been substituted. 3. The learned Senior Standing Counsel for the Revenue, Mr.T.R.Senthilkumar, urged before us that since the Assessee was only a sub-contractor and since it was not the Assessee, who itself had entered into a contract with the specified authority viz., Central Government or State Government or Local Authority as envisaged under Section 80IA(4) of the Act, the Assessee will not be entitled to the benefit of deduction under Section 80IA of the Act and that the Tribunal erred in giving the said benefit to the said Assessee. He submitted that the principal contractor, who had entered into an agreement with the Railways, was one M/s.ST-CMS Electric Company Private Limited and the Assessee was only a subcontractor and undertook the work of development of the railway sidings at Vadalur and Uthangalmangalam Railway Stations and was operating and maintaining such railway sidings under the agreement dated 16.04.2002 captioned as Lignite transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, the proviso was never attempted to be deliberated upon whereas the assessee relies only on the proviso to claim the relief u/s 80IA as if no transfer had taken place. To maintain a rail system and operating and maintaining such infrastructure facility as defined and the original ST-CMS agreement will hold good in view of the proviso to sec.80IA(4). This proviso has to be read along with CBDT Circular No.779 dated 14.09.1999 cited supra, clearly brings the assessee as one entitled to claim deduction u/s 80IA of the Act particularly in view of proviso to sub-sec.(4). The assessee performed the contract according to the terms agreed upon is not in dispute. Once we are satisfied that the services rendered by the assessee were an integral and inseparable part of operation and maintenance of a Lignite Transport System and therefore, the assessee's claim that it had complied with the requisite conditions specified under the proviso, and is entitled to deduction under sec. 80- IA in terms of proviso to sub-sec.(4) has to be accepted. As rightly claimed by the ld. Counsel for the assessee the decision of the Hon'ble Supreme Court in the case of Bajaj Temp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to in this section as the transferor enterprise) to another enterprise (hereafter in this section referred to as the transferee enterprise) for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with the agreement with the Central Government, State Government, local authority or statutory body, the provisions of this section shall apply to the transferee enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would have been entitled to the deduction, if the transfer had not taken place. Provided further that nothing contained in this section shall apply to any enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April 2017. Explanation : For the purposes of this clause, infrastructure facility means- (a) a road including toll road, a bridge or a rail system; (b) a highway project including housing or other activities being an integral part of the highway project; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Assessee ignoring the effect of Provisos to Section 80IA(4), therefore, could not be sustained. The learned Tribunal, in our opinion, has rightly held that the Proviso does not require that there should be a direct agreement between the transferee enterprise and the specified authority for availing the benefit under Section 80IA of the Act. There is no dispute before us that the Assessee was duly recognised as transferee or assignee of the principal contractor M/s.ST-CMS Company Private Limited and was duly so recognised by the Railways to operate and maintain the said railway sidings at Vadalur and Uthangalmangalam Railway Stations. The findings of fact with regard to the said position recorded by the learned Tribunal are, therefore, unassailable and that clearly attracted the first Proviso to Section 80IA(4) of the Act. 10. The learned counsel for the Revenue relied upon a decision of this Court in the case of M/s.Covanta Samalpatti Operating Private Limited, Chennai-20 v. The Assistant Commissioner of Income Tax, Company Circle I (3), Chennai-34, reported in (2018) 93 Taxmann 38. In the said case, the claim of the Assessee company, which was engaged in power gene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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