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TMI Blog2020 (6) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly all those additions are directed to be deleted. Since the legal issues are addressed, we refrain to give our findings on merits of additions under the provisions of the Act. Accordingly, the grounds raised by the assessee allowed. Disallowing the deduction claimed u/s 80-IA (4) with respect to the eligible infrastructure project - HELD THAT:- Assessee is in development of the infrastructure facilities eligible for deduction under section 80 IA(4) of the Act. The ground of appeal of the assessee is allowed and ground of appeal of the Revenue is dismissed. Deduction u/s 80-IA (4) - Denial of claim assessee is not executing any projects eligible for deduction specified - AY 2009-10 - HELD THAT:- We note that the assessee is supplying heavy earthmoving machinery on hiring basis to GMDC. CIT (A) held that there cannot be any deduction with respect to such projects under section 80-IA(4) of the Act, as the assessee is not executing any projects eligible for deduction specified under section 80-IA(4) of the Act. AR at the time of hearing before us has not advanced any argument against the finding of the learned CIT(A). Accordingly in the absence of any information/assistance fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JT/2015 for A.Y. 2005-06 the Grounds of appeal raised by the Revenue are as follows: "1) The Ld.CIT(A) has erred in law and on facts in allowing the deduction U/s 80IA(4) in respect of various projects by treating the assessee as developer instead of work contracts' as treated by the A.O. 2) The Ld.CIT(A) has erred in law and on facts in deleting the disallowance is made U/s 36(1)(va) r.w.s. 2(24)(x) of IT. Act. 3) On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O.." 5. In ITA No. 220/RJT/2015 for A.Y. 2006-07 the Grounds of appeal raised by the assessee are as follows: "1. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad erred in upholding the validity of order passed u/s 153A r.w.s. 143(3} of the particularly in respect of deductions claimed originally and allowed in one; order u/s 143(3) of the Act and not related to any incriminating material fou during action u/s 132 of the Act. 2. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad erred in confirming the action of the assessing officer in disallowing the claim of deduction u/s 80IA(4) in respect of following infrastru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as subject to the regular assessment framed under section 143(3) of the Act. 10. As per the ld. AR there was no incriminating material found during the search in respect of the unabated proceedings. Therefore no additions can be made. The assessments were framed u/s 153A/143(3) of the Act after making the addition of regular items as discussed above which were disclosed in the income tax return. 11. The Ld. AR accordingly argued in respect of assessment years 2005-06 and 2006-07 being unabated assessments, the Ld. AO has made the addition, for which absolutely no incriminating materials were found during the course of the search. Hence he prayed to delete disallowance made for assessment years 2005-06 and 2006-07 in the assessment framed under section 143(3)/153A of the Act. He placed reliance on the decisions of the Hon'ble Gujarat High Court in the case of PCIT vs. SaumyaConstrcution reported in 387 ITR 529. 12. The Ld. DR, on the other hand, vehemently supported on the validity of the assessment completed u/s 153A/143(3) of the Act, by placing reliance on the orders of the subordinate authorities. 13. We have perused the case record, analyzed the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Court in Continental Warehousing Corpn. (NhavaSheva) Ltd. (supra). In the appeal before us, the revenue has made no grievance with regard to the impugned order of the Tribunal holding that in law the proceedings under Section 153A of the Act are without jurisdiction. This in view of the fact that no assessment were pending, so as to abate nor any incriminating evidence was found. The grievance of the revenue is only with regard to finding in the impugned order on the merits of the individual claim regarding gifts and deemed dividend. However once it is not disputed by the revenue that the decision of this Court in Continental Warehousing Corporation (NhavaSheva) Ltd. (supra) would apply to the present facts and also that there are no assessments pending on the time of the initiation of proceedings under Section 153A of the Act. The occasion to consider the issues raised on merits in the proposed questions becomes academic." 16. We also draw support & guidance from the case of Saumya Construction(supra) where the Hon'ble Gujarat High Court has held as under: "the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in the 1st ground of appeal has challenged the validity of the assessment framed under section 153A r.w.s. 143(3) of the Act. 22. At the outset it was noticed that the year under consideration was the abated assessment year and therefore the AO is empowered to disturb the items of regular income, expenditures and deductions without finding out any incriminating materials during the search for the reasons which has been discussed in detail somewhere in the preceding paragraph. The learned AR has also not brought anything on record contrary to the finding of the learned CIT (A). Accordingly we dismiss the ground of appeal raised by the assessee. 23. The 2nd issue raised by the assessee is that the learned CIT (A) erred in disallowing the deduction claimed under section 80-IA (4) of the Act, with respect to the eligible infrastructure project. 24. During the year under consideration assessee has claimed deduction u/s 80-IA of the Act, for ₹ 10,48,13,775/- with respect to the eligible projects carried out by it. As per the assessee it has fulfilled all the conditions for claiming the deduction under section 80-IA (4) of the Act. The assessee in support of its contention su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: "Findings in appeal 9. After perusal of the ratio laid down by the different courts and Tribunals and the relevant provisions of the Act, it emerged that an enterprise has to enter into an agreement with the Central or State Government or a Local Authority or any Statutory Authority for development of an infrastructure facility. The infrastructure facility should undisputedly I belong to the Government, therefore, the infrastructure facility is owned by the Government. But the enterprise which is developing or constructing the infrastructure facility is to be owned by a Company registered in India. The Act also says that an enterprise which is constructing or developing the infrastructure facility can be a consortium of such companies. Such an arrangement is eligible for the claim of deduction. 9.1 Several Tribunals and Courts have elaborately discussed in their decisions the provisions of section 80IA (4) and laid down broad criteria for eligibility to a developer to claim deduction u/s 80IA (4) of the Act. 9.2 The terms and conditions of the agreements of works have been individually examined in the light of broad criteria laid down by several Tribunals and Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first category was not entitled for the deduction. The decisions in the cases of ABG Heavy Industries Ltd. (supra), Koya & Co. Construction (P.) Ltd. (supra), Radhe Developers (supra), Bharat Udyog Ltd. (supra), Rohan and Rajdeep Infrastructure 61 SOT 9 (Pune) (2014), Sushee Infra (P)Ltd 36Taxmann.com 397 (Hydr), KMC Construction Ltd 36 Taxmann.com 415(Hyder), 59 SOT 64 (Amrit) (2013). are clearly applicable to the facts of the case of the appellant. 9.5 The assessee has executed the construction of infrastructure facility in respect of the Government Projects, as is evident from the terms and conditions of the nature of work mentioned in the agreements placed on record. Therefore, in my considered opinion, the assessee is eligible for deduction u/s.80IA (4) to the extent of the profits earned from the eligible projects as discussed in the subsequent part of this order. 9.6 The appellant furnished list of the contracts, for claim of deduction u/s 80IA (4), which were executed during the period under consideration as below:- Sr.No. Name of site 1. Opa - Goa 2. Tillari - Goa 3. Akalpada 4. Bhuj Sublate & Bhuj Khavda 5. Khadkpurna 6. Kutchh Canal 7. Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or public utility. After having regard to the terms and conditions of the agreement for development of the infrastructure facility, the rulings of the courts and position of law on the issue, in my opinion, the assessee acted as a developer because he developed infrastructure facility and handed over the same to the authority concerned with guarantee period for maintenance thereof. Therefore, the assessee was eligible for claim of deduction u/s.80IA (4) (i) of the Act. Accordingly, the same is allowed. The contract at Sr.No.3 was an agreement between the appellant and Tap! Irrigation Development Corporation, Jalgaon of Govt. of Maharashtra, it was a Lower Panzara (Akkalpada) Medium Project for manufacturing & Errection of Radial Gates of size 12mx8m radial gates 17 nos. in over flow section of spillway and construction spillway bridge for tunnel outlet for left bank canal and constructing diversion to Surat Chule Road N.H. 6 from 557/030 to 560/984 to the existing N.H. 6 coming under submergence due to Akkalpada Dam near village Akkalpada in Dhule Dist. Thereafter, the assessee had to undertake maintenance of the said infrastructure for a period of 3 years. If any damage occurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for contract. The appellant was to complete the project within 60 months and maintenance for 3 years after satisfactory erection and testing on turnkey basis. The terms and conditions of the contract were examined and it was noticed that .the appellant was required to execute the contract work wherein he was to plan and design with drawings and after approval by the competent authority for fabrication and execution of spillway radial gate, stop log gate, etc: of Khadagpurna Project in Buldhana, Maharashtra. The appellant was required to obtain approval and clearance of all applicable national laws, safety codes and local regulations from the concerned statutory authorities. The project was to be developed by the appellant as per specifications of the employer and to hand- over the same after its completion. The appellant undertook an obligation to design the project which was approved by tne competent authority of the Vidarbh Irrigation Development Corporation, Nagpur and was assigned with the duty to develop the facility, the appellant was fully responsible to execute and complete the work. He was given possession of the land and property during the period of development agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developer because he developed infrastructure facility. Accordingly, he is eligible for claim of deduction u/s.80IA (4) (i) of the Act and the same is allowed. The contract at Sr.No.6 was an agreement between the appellant and Narmada Water Resources and Kalpsar Department for constructing Kachchh branch Canal Reach 54.90 to 65.00 km. (Eathwork, Lining, Structures and Service Road) Package-VI. Kachchh branch Canal- Package-VI (Ch. 54.90 to 65.00), Kachchh branch Canal_offtakes at Ch. 385.814 k.m. of Narmada Main Canal. The length the branch canal is 352 km. having C.C.A. of 63100 ha. in Banaskantha and Patan Districts and 112700 ha. in Kachchh Districts. The capacity of branch canal at head is 220 cumecs with canal section at head is 16.50 x 5.80 (FSD), Total no. of structure along the alignment for Package-VI (Ch. 54.90 to 65.00 km) are 15 nos. The approximate quantity of earthwork for Package-Vi is 15.75 L.C.M. whereas the quantity of concrete for structure and lining for Package-VI is 76 TCM. The important towns in the vicinity of branch canal and command are Radhanpur (Patan Dist.) and Santalpur (Patan Dist.). It was a work for construction of tunnel and other allied works ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned with the duty to develop the facility, the appellant was fully responsible to execute and complete the work. He was given possession of the land and property during the period of development agreement and he used to exercise complete domain over the land and the project, he had to arrange finances, suitable manpower, machinery and equipments and managerial force. The risk in execution of work was also undertaken by the assessee as he was responsible for any damage or loss to the property. The assessee had to develop the infrastructure facility and in the process all the works were to be executed by him. It may be laying of drainage system, provision of way for traffic etc. without any hindrance. The assessee's duty was to develop infrastructure whether it involved construction of a particular item as agreed to in the agreement or not. The agreement was not for a specific wok, it was for development of the facility as a whole. The assessee was not entrusted with any specific work to be done by him. The material required was to be brought in by the assessee by adhering to the quality and quantity irrespective of cost of such material. Thus, the contract was provided for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty. The assessee had to develop the infrastructure facility and in the process all the works were to be executed by him. It may be laying of drainage system, provision of way for traffic etc. without any hindrance. The assessee's duty was to develop infrastructure whether it involved construction of a particular item as agreed to in the agreement or not. The agreement was not for a specific wok, it was for development of the facility as a whole. The assessee was not entrusted with any specific work to be done by him. The material required was to be brought in by the assessee by adhering to the quality and quantity irrespective of cost of such material. The employer did not provide any material to the assessee. Thus, the contract was provided for the works in package and not as a works contract. The assessee utilized its funds, its expertise, its employees and took the responsibility of developing the infrastructure facility. The losses suffered either by the employer, the workers of the developer or the people in the process of such development would be that of the assessee.The appellant handed over the developed infrastructure facility to the Narmada Water Resources and Kalps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veloper and the government or its agencies for developing any infrastructure facility for public utility. After having regard to the terms and conditions of the agreement for development of the infrastructure facility, the rulings of the courts and position of law on the issue, in my opinion, the assessee acted as a developer because he developed infrastructure facility and handed over the same to the authority concerned with guarantee period for maintenance thereof. Therefore, the assessee was eligible for claim of deduction u/s.80IA (4) (i) of the Act. Accordingly, the same is allowed. The contract at Sr.No.10 was an agreement between the appellant and Narmada Water Resources and Kalpsar Department for the work of construction of Earthen Dam, Spillway, Masonry Dam, Head Regulator & Spillway Bridge for Machhu-lll Water Resources Project Taluka Murve, Dist. of Rajkot. The work, in brief, consisted of Masonry spillway having length 302.12 m., Earthen dam on both flanks having length 220.45m., Spillway bridge having 4.89 m. carriage width, Head regulator having discharging capacity of 46 cusecs in left bank, canal work on left bank having approximate length 26 km., 20 nos. radial g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing arrangement and its operation on turnkey basis. The appellant was required to obtain approval and clearance of all applicable national laws, safety codes and local regulations from the concerned statutory authorities. The project was to be developed by the appellant as per specifications of the employer and to hand-over the same after its completion. The appellant undertook an obligation to design the project which was approved by the competent authority of Tapi Irrigation Development Corporation, Jalgaon and was assigned with the duty to develop the facility, the appellant was fully responsible to execute and complete the work. He was given possession of the land and property during the period of development agreement and he used to exercise complete domain over the land and the project, he had to arrange finances, suitable man-power, machinery and equipments and managerial force. The risk in execution of work was also undertaken by the assessee as he was responsible for any damage or loss to the property. The assessee had to develop the infrastructure facility and in the process all the works were to be executed by him. It may be laying of drainage system, provision of way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deletion of the disallowance made by the AO for the deduction under section 80-IA (4) of the Act with respect to the remaining project. 31. The Revenue has raised the grounds in ITA No. 201/RJT/2015 for the assessment year 2008-09 as detailed under: "1) The Ld.CIT(A) has erred in law and on facts in allowing the deduction U/s 80IA(4) in respect of various projects by treating the assessee as developer instead of'work contracts' as treated by the A.O. 2) On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O.. 3) It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent." 32. The learned AR before us submitted that the tribunal in the own case of the assessee for the assessment year 2007-08 has already held that the assessee is acting as a developer for the projects which are continued in the year under consideration. 33. On the other hand the learned DR claimed that the principles of rest judicata does not apply to the income tax proceedings. Therefore the order of the ITAT for the earlier year does not have any relevance to decide the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was granted but thereafter the C.I.T. passed orders u/s 263 of the Act on the ground that the assessees were contractors and not developers. Against the said orders, appeals were filed wherein after duly examining the nature of business of those assessees, we have given a finding that although the assessees had entered into agreements with Govt. for infrastructure facilities, the same were in the nature of development by the assessees within the ambit of infrastructure facility, which aspect was also noted from the accounts of the assessees and thereafter it was held by us that the assessees being developers, they were entitled to deduction-u/s 80-IA(4) of the Act. In the case of Gujarat Industrial Development Corporation and Others 227 1TR 414 has considered the meaning of "Developer" and has held that the word "Development" should be understood in its wider sense and that development means the realisation of potentiality of land or territory by building or mining. In this context therefore, based on facts on record and after examining the nature of business, it was held that the assessees were developers and not mere contractors carrying out works contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he country as a special benefit or rebate to eligible persons and therefore even if there could be more than one view regarding the particular nature of business of the assessee, the view favourable to the assessee can be taken. 8. The C.I.T. D.R. relied upon the decision of the Hon'ble Mumbai Bench in the case cited supra. We have carefully perused the said judgement and from the facts narrated therein, we find that in that case the assessee namely B. T. Patil & Sons therein is stated to have been employed as a sub-contractor by M/s. Patel Engineering Co. to carry out civil work and that a portion of the contract was assigned to that assessee who carried out the assigned work in the capacity of a sub-contractor. In this context, we find that in the present case before us, it is nobody's case that the appellant is a sub-contractor. The appellant is stated to be the person who entered into the contract with the Govt. in respect of infrastructure facility and directly was involved in executing the same. We find force in the argument of the A.R. before us that entering into a contract and that too with the Govt. only is a pre-condition u/s 80-IA(4) and hence merely because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt, both the grounds of appeal are allowed." 36. As the facts in the case on hand are identical to the facts of the case as discussed above, therefore we are bound to follow the same. We cannot change the stand taken by the ITAT in the own case of the assessee in the earlier year involving identical facts. Regarding this we find support & guidance from the judgment of Hon'ble Madras High Court in the case of CIT v. L.G. Ramamurthi 1977 CTR (Mad.) 416 : [1977] 110 ITR 453 (Mad.) wherein it was held as under: "No Tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the same facts. It may be that the members who constituted the Tribunal and decided on the earlier occasion were different from the members who decided the case on the present occasion. But what is relevant is not the personality of the officers presiding over the Tribunal or participating in the hearing but the Tribunal as an institution. If it is to be conceded that simply because of the change in the personnel of the officers who manned the Tribunal, it is open to the new officers to come to a conclusion totally contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Art. 31A itself is of no consequence. The comprehensive vocabulary of that purposeful provision obviously catches within its protective net the present Act and, broadly speaking, the antiseptic effect of that Article is sufficient to immunise the Act against invalidation to the extent stated therein. The extreme argument that Art. 31A itself is void as violative of the basic structure of the Constitution has been negatived by my learned brother, Bhagwati, J. in a kindred group of cases of Andhra Pradesh. The amulet of Art. 31A is, therefore, potent, so far as it goes, but beyond its ambit it is still possible, as counsel have endeavoured, to spin out some sound argument to nullify one section or the other. Surely, the legislature cannot run amok in the blind belief that Art. 31A is omnipotent. We will examine the alleged infirmities in due course. It is significant that even apart from the many decisions upholding Art. 31A, GolakNath's case decided by a Bench of 11 Judges, while holding that the Constitution (First Amendment) Act exceeded the constituent power still categorically declared that the said amendment and a few other like amendments would be held good based on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee is allowed and the appeal of the Revenue is dismissed. 39. Coming to the ITA No. 222/RJT/2015 for the AY 2009-10 where the assessee has raised the following grounds: "1. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad Ahmedabad erred in upholding the validity of order passed u/s 153A r.w.s. 143(3) of the Act. 2. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad erred in confirming the action of the assessing officer in disallowing the claim of deduction u/s 80IA(4) in respect of following infrastructure projects undertaken by the appellant: Sr. No. of site referred by IT (Appeals) Name of the site 2 Bhavnagar 5 Bhuj Khavda 12 Bagodara Dholka 3. The learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad erred in holding that appellant was not a developer of infrastructure facility in respect of projects specified by him and listed in ground No. 2 above." 40. Coming to the ITA No. 202/RJT/2015 for the AY 2009-10 where the Revenue has raised the fllowing grounds: "1) The Ld.CIT(A) has erred in law and on facts in allowing the deduction U/s 80IA(4) in respect of various projects by treating the assessee as devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executing any projects eligible for deduction specified under section 80-IA(4) of the Act. 47. The learned AR at the time of hearing before us has not advanced any argument against the finding of the learned CIT(A). Accordingly in the absence of any information/assistance from the side of the learned AR for the assessee, we do not find any reason to interfere in the finding of the learned CIT (A). Hence the ground of appeal of the assessee is dismissed. In the result the ground of appeal of the assessee is partly allowed whereas the appeal of the Revenue is dismissed. 48. In the result, the appeal of the assessee is partly allowed whereas appeal of the revenue is dismissed. 49. Before we part with the issue/appeal as discussed above, it is pertinent to note that the clause © of rule 34 of the Appellate Tribunal Rules 1963 requires the bench to make endeavour to pronounce the order within 60 days from the conclusion of the hearing. However the period of 60 days can be extended under exceptional circumstances but the same should not ordinarily be further extended beyond another 30 days. In simple words the total time available to the Bench is of 90 days upon the conclusion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continues to operate shall be added and time shall stand extended accordingly", and also observed that "arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020". It has been an unprecedented situation not only in India but all over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus "should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure…". The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be neither anticipated nor controlled' When such is the position, and it is officially so notified by the Government of India and the Covid- 19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an "ordinary" period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring prono ..... X X X X Extracts X X X X X X X X Extracts X X X X
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