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TMI Blog2021 (5) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... in case Nos. 1165/2014-15/B1/CIT(A)-6; 0034/2015-16/B2/CIT(A)-6; 0037/2016-17/B2/CIT(A)-6 and 0460/2016-17/B2/CIT(A)-6 for Assessment Years 2011-12 to 2014-15; respectively. Relevant proceedings in first and foremost Assessment Year 2006-07 are under section 143(3) r.w.s. 254 and u/s. 143(3) of the Income Tax Act, 1961 ('in short the Act'); respectively. Heard both parties. Case files perused. 2. Both the learned representatives state at the outset that the assessee's identical sole substantive grievance that in all these nine cases seeks to reverse both the lower authorities' action disallowing its 80IA deduction claim(s) of Rs. 2,85,67,175/-, Rs. 1,62,25,941/-, Rs. 1,85,37,574/- Rs. 6,65,60,238/-, Rs. 2,01,03,559/-. Rs. 49,40,186/-, Rs. 5,85,122/-, Rs. 3,85,097/- and Rs. 13,15,184/-; assessment years, respectively pertaining to execution of the alleged contract works forming part of M/s. Bhima Lift Irrigation Scheme in Mahaboob Nagar District, Telangana State (erstwhile undivided Andhra Pradesh). Learned counsel invited our attention to the tribunal's first round remand order dt. 8.3.2013 in assessee's appeal in ITA No. 517/Hyd/2010 in A.Y. 2006-07 resto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.03.2014 and rejected the claim for deduction u/s. 80IA of the Act. The Assessing Officer in the assessment order mentioned that - a) the entire project is not executed by the assessee and only part of the project was undertaken; b) the infrastructure facility was not operated by the assessee and the assessee did not commence the operating and maintenance and, therefore, failed to justify the crucial condition. c) The Assessing Officer is of the view that the infrastructure facility should be owned for a substantial period with a condition that the assessee should be eligible to operate and maintain. d) As the intent of the government is not to grant deduction u/s. 80IA and also block its funds in developmental activities, the Assessing Officer rejected the claim for deduction u/s. 80IA of the Act. 5. Before the learned CIT (A), a detailed submission was made a copy of which is available at page No. 18 & 19 of the paper book. The learned CIT (A) observed as under: 6. At paras 7.0 and 7.1, the learned CIT (A) held that for being eligible for deduction u/s. 80IA, it is enough if any of the three conditions i.e. developing or operating and maintaining or developing, ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Hon'ble ITAT Ahmedabad Bench-D in the case of Sugam Constructions Pvt. Ltd Vs. ITO. 6. Hon'ble ITAT Pune Bench-B in the case of B.T. Patil & Sons Belgaum Constructions (P.) Ltd Vs. ACIT. 7. Hon'ble ITAT Mumbai Bench-C in the case of ACIT Vs. Pratibha Industries Ltd. 8. [2016] 76 Taxmann.com 105 (Jammu & Kashmir) Hon'ble High Court of Jammu & Kashmir in the case of CIT Vs. TRG Industries Pvt. Ltd. 9. [2019] 107 Taxmann 362 (Madras) Hon'ble High Court of Madras CIT Vs. Chettinad Lignite Transport Services Pvt. Ltd. 10. Hon'ble ITAT Hyderabad Bench-B in the case of Sushee Hi Tech Constructions Pvt. Ltd Vs. DCIT. 11. Hon'ble ITAT Rajkot in the case of Katira Constructions Ltd Vs. ACIT. 12. Hon'ble ITAT Jaipur Bench-A in the case of Mis am Metals Infraprojects Ltd. Vs. CIT-I, Jaipur. 5. Ld. CIT-DR Mr. VYST Sai represents the Revenue in the instant batch of cases. He has strongly supported both the lower authorities making the impugned section 80IA (4) disallowance as per the following written synopsis: "The following synopsis of arguments made during hearing before the Hon'ble ITAT on 15.02.2021 is filed as directed by the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that even for supply of electro mechanical and other equipment, payments are made on receipts of goods(70%) and installation (20%). These details are available at Clauses 3.15.1 to 3.15.6 (at pages 1-73 to 1-78) of the contract agreement of the assessee with the Government with respect to Bheema Lift Irrigation Project. From the detailed reading of the above said clauses, it is seen that the assessee is not the developer but the Government is the developer. The Government has assigned contract work to the assessee, made advance payments as well as monthly lumpsum payments. There is no financial involvement or entrepreneurial risk borne by the assessee. 4. It is submitted that the letter and spirit of Section 80IA in general as well as Explanation to Sec. 80IA introduced by Finance Act, 2009 (w.e.f. 1.4.2000) in specific, has been dealt in detail by the Hon'ble Gujarat High Court in the case of Katira Construction Ltd [352 ITR 513]. When there is no entrepreneurial risk and financial involvement, the entire project is developed by the Government and the assessee is merely a works contractor, the assessee is not be eligible to claim deduction ix] s. 80IA (Specific reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he law that a fiscal statute as well as an exemption clause incorporated therein ought to be construed in stricter parlance only. Their lordships make it clear that benefit of doubt in case of taxing provision goes to the tax payer and vice versa in an instance of an exemption provision. The assessee's first argument is rejected therefore. 9. We next examine the merits of the assessee's claim in light of section 80IA(4) r.w. Explanation (c) thereof. This is for the reason that the legislature has reintroduced the Explanation; formerly inserted by the Finance Act, 2007 w.e.f. 1.4.2007 that "For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a works contract entered into with the undertaking or enterprise as the case may be," followed by its substitution by the Finance Act, 2009 w.e.f. 1.4.2000 that "for the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in subsection (4) which is in the nature of a works contract awarded by any person (including the central or state government) and executed by the undertaking or enterpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt's judgment in B. Laxmikantha Rao Vs. D Chinna Mallaiah AIR 1979 AP 132 whilst adopting the dictionary meaning of "work" in foregoing terms. We further quote Raghunath Rai Baraza Vs. PNB (2007) 135 Company cases 163 (SC) that it is the cardinal rule of interpretation that words used by the legislature are to be understood in their natural, ordinary or popular sense or constructed as per their grammatical meaning unless such a construction lead to some absurdity or there is something in the context or in the object of the statute to the contrary. 12. We go by the foregoing observations of their lordships and observe that the stages I & II of the Bhima Lift Irrigation project undertaken by the assessee containing " all the civil works like canal approach to the tunnel, tunnel, surge pool pump house, delivery mains manufacturing, testing, inspection, packing, supply, erection and commissioning of electro mechanical and hydro mechanical equipment" indeed formed an architectural as well as engineering structure and therefore, amounts to an execution of a "works contract awarded by the state government" through its irrigation development only and covered u/s. 80IA Explanation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is a contractor having executed works contract only. 15. We also deem it appropriate to quote Adam Smith's 'The Wealth of Nations' (published in 1776 and called as the founding work on modern economics) that " It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."16. Nevertheless, the same connotation applies in the facts of the instant case. It is clear that the assessee has first of all been paid mobilization advances by the state government's department on periodic basis, and, then only it executed the corresponding lift irrigation project works contract followed by its yet another claim of section 80IA of the Act deduction (supra). We are afraid that such a liberal interpretation would amount to going against the stricter interpretation principle in view of honourable apex court decision (supra). We accordingly conclude both the learned lower authorities have rightly disallowed assessee's 80IA deduction claim involving varying sum(s) (supra) in their respective orders. The same stands confirmed. These assessee's appeals are dismissed therefore. 17. No other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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