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TMI Blog2024 (1) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... any statutory body for carrying out development work. Therefore, in our considered view, claim of deduction u/s 80-IA(4) cannot be denied to the assessee only on the ground that since the assessee has entered into a contract with AAI, which does not constitute as a Central / State Government, the assessee is not eligible for claim of deduction under Section 80-IA(4) of the Act. Satisfaction of other conditions for eligibility of claim - qualifying as a developer - whether the assessee qualifies as a developer or the assessee is a works contractor within the meaning of Explanation to Section 80-IA of the Act? - Evidently the contract has not been awarded to the assessee for carrying out any repairs, maintenance or upkeep etc. of existing airport facility, but the assessee has been awarded contract for bringing into existence a new infrastructural facility in place being new domestic arrival block at Sardar Vallabhbhai Patel International Airport. Accordingly, the assessee in our view is has been entrusted the responsibility of bringing into existence and new infrastructure facility being a new domestic arrival block at Sardar Vallabhbhai Patel International Airport. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide working order dated 08.05.2006. 3. For A.Y. 2007-08, the Ld. CIT(A) dismissed the appeal of the assessee on the ground that the assessee is not eligible for deduction under Section 80-IA(4) in view of Explanation inserted in the Act by Finance Act 2009 with retrospective effect from 01-04-2000 and therefore, he confirmed the disallowance of Rs. 1,28,29,000/- made by the Assessing Officer. The assessee is in appeal against the aforesaid order passed by Ld. CIT(A) dismissing the appeal of the assessee and confirming the disallowance of claim of deduction under Section 80- IA(4) of the Act. 4. For A.Y. 2008-09, Ld. CIT(A) allowed the appeal of the assessee on the same set of facts and held that the assessee qualifies as a developer and is eligible for claim of deduction under Section 80- IA(4) of the Act. The Department is in appeal before us against the aforesaid order passed by Ld. CIT(A) holding that the assessee is eligible for claim of deduction under Section 80-IA(4) of the Act. 5. Accordingly, since common facts and issues for consideration are involved for both the years under consideration before us, both appeals are being taken up together. 6. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A(4) of the Act is that the assessee has not entered into a contract with Government of India towards construction of new Domestic Arrival Terminal at Ahmedabad Airports. The issue for consideration therefore is that whether contracts granted by Airports Authority of India would be eligible for claim of deduction under Section 80-IA(4) of the Act. 10. We observe that Section 80-IA(4)(i)(b) of the Act states that the assessee can enter into an agreement with Central Government or a State Government or a Local Authority or any Statutory Body for development of new infrastructure facility. The relevant extracts of Section 80-IA(4) of the Act are reproduced for ready reference:- (4) This section applies to .. (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility ; 11. The Government of India constituted the International Airports Authority of India (IAAI) in 1972 to manage the nation's international airports while the National Airports A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the project was to be made by the assessee, interim payment to the tune of estimated contract value in respect of the development work done for each month after retention and other adjustments, were to be made to the assessee, security deposit was to be paid by the assessee, there was penalty for delay by the assessee in completion of the project, procurement of the material was the responsibility of the assessee, procurement of land for camp, for shop, labour camp etc. and also the employment of qualified engineers, action and compensation in respect of bad work, defect liability of the accidents to persons in relation to Workman Compensation Act, indemnity insurance of the workmen employed etc. were all the responsibility of the assessee. Accordingly, the Gujarat High Court held that the Ld. CIT(A) and Tribunal considering such aspects of the tender agreement, concurrently held that the assessee had entered into a contract for development of infrastructure facility agreement and not a works contract and was eligible for claim of deduction under Section 80-IA(4) of the Act. 16. In the instant facts we have to firstly see whether the assessee is engaged in developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of work, penalty provisions etc. are to be borne by AAI and assessee is only working at the behest and under the control and directions of AAI. In this case, we observe that the assessee has furnished bank guarantee to AAI (refer Pages 51-61 of the Paper Book), the assessee has furnished detailed program and CPM work diagram to AAI for its approval (refer Pages 51-61 of the Paper Book), the assessee has prepared and submitted electrical layout drawing for site office (refer Pages 69-70 of Paper Book), the assessee has prepared various other designs like curtain glazing wall (refer Pages 72-98 of Paper Book), honey comb panels designs (refer Pages 99-103 of Paper Book), design for air handling unit Duct Pipe (refer Pages 104-124 of the Paper Book) etc. Further, the assessee has also undertaken to provide all materials for the project at it s own expenses (other than those which are supplied by AAI) (refer Pages 131 and 06 of Paper Book). The assessee has also undertaken to indemnify AAI employees against action for claim or proceedings relating to infringement or use of any patent or design etc. (refer Pages 132 of Paper Book). Accordingly, looking into the facts of the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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