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TMI Blog2010 (10) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law the learned CIT[A] erred in disallowing appellant company's claim for deduction of ₹ .2,91,93,349/- u/s.80IA 2. After hearing both the parties, we find that during the assessment proceedings, AO noticed that the assessee had claimed deduction u/s.80IA as the assessee was engaged in the business of civil contractor for infrastructure project, water pipeline project and other civil works. The AO was of the view that the assessee was merely a contractor, therefore, deduction u/s.80IA could not be allowed. Further, though assessee had excluded certain other income from the profits but the bank interest received and miscellaneous income was not excluded. On this, AO opined that the bank interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es a work contact entered into with the undertaking enterprise, as the case may be. Notes on clause of the Finance Bill, 2007 at (2007) 289 ITR 237(St.) explain the rationale behind the insertion of this Explanation. 'It is also proposed to insert an Explanation To section 8-IA so as to clarify that nothing contained in the said section shall apply to a person who executes a works contract entered into with the understanding of enterprise, as the case may be. This amendment will take effect retrospectively from 1st April, 2000 and will, accordingly apply in relation to the assessment year 2000-2001 and subsequent years. 4.6 Memorandum explaining the provisions in the Finance Bill, 2007 at (2007) 289 ITR 312 (St) explains the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for executing works contract, will not be eligible for the tax benefit under section 80-IA. This amendment will take retrospective effect from 1st April, 2000 and will, accordingly, apply in relation to the assessment year 2000-01 and subsequent years. 5. Before us, ld. counsel of the assessee reiterated the submissions made before the lower authorities and relied on the decision of the Tribunal in the case of M/s. Patel Engg. Vs. ACIT 94 ITD 411. 6. On the other hand, the ld. DR submitted that now this issue is squarely covered against the assessee by the decision of the Special Bench of the Tribunal in the case of B. T. Patil Sons Belgaum Construction (P) Ltd. vs. ACIT 126 TTJ (Mum) 577. 7. We have considered the rival subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualify for deduction within the framework of sub-s. (4)(i) itself--With a view to clarify the position beyond any doubt, the Explanation was substituted by the Finance Act, 2009 with a new Explanation to clarify that the deduction is not available to business referred to in sub-s. (4) which is in the nature of a works contract awarded by any person (including the Central or State Government) and executed by an enterprise referred to in sub-s. (1)-- With this substitution of Explanation below s. 80-IA(13), the entire controversy, created for no reason to needlessly distinguish between contractor and developer, has subsided--Position which was earlier apparent on a careful look of the provisions of sub- s. (4) has now been made available eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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