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TMI Blog2024 (8) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Gammon Infrastructure Projects Ltd. It belongs to Gammon India group. In all these years, the assessee has provided Project Advisory Services to the following three companies:- (a) Mumbai Nasik Expressway Ltd (b) Kosi Bridge Infrastructure Company Ltd (c) Gorakhpur Infrastructure Company Ltd The assessee claimed deduction u/s 80IA of the Act in respect of fees received by it from the above said three companies. 4. The above said three companies are Special Purpose Vehicles (SPV) formed to execute the contract obtained from National Highways Authority of India Ltd (NHAI). The assessee has explained as to how the above said three SPVs came into existence as under:- (a) Mumbai Nasik Expressway Ltd:- The above said company was formed by M/s Gammon India Ltd, Sadbhav Engineering Ltd and B E Billimoria & Company Ltd. These three companies have formed consortium in order to bid the tender of a project floated by NHAI, viz., Improvement, Operation and Maintenance, Rehabilitation and Strengthening of existing two lane road and widening it to 4 lane divided Highway of Vadape to Gonde section of National Highway 3 (NH3) from 539.500 to 440.000 in the State of Maharashtra on B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining a new infrastructure facility; (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995" A perusal of the above said provisions would show that the deduction u/s 80IA is allowed to an "enterprise" carrying on the business of developing etc of "infrastructure facility". The conditions prescribed in this regard are that:- (a) the "enterprise" is owned by an Indian company or other forms of organization mentioned in clause (a) above. (b) the "enterprise" has entered into an agreement with the Government mentioned in clause (b) above. (c) the "enterprise" has started or starts operating and maintaining the infrastructure facility on or after 1st day of April, 1995... In the instant case, the "enterprise" is the three SPVs mentioned above, since the said SPVs (a) are owned by the Indian Companies (b) have entered into an agreement with NHAI, being a statutory body of the Government. (c) the operations have been started after 1st day of April, 1995. Hence the three SPVs are the "enterprises", which are mentioned in sec. 80IA(4) of the Act. 6. However, the assessee herein has claimed deduction u/s 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the SPVs in all the years under consideration. 8. The Ld CIT(A), in principle, upheld the order passed by the AO. In addition to the above, the Ld CIT(A) also noticed that the most of the work has been completed in the earlier years and the assessee has not furnished proof to show that it has executed works mentioned under the "Scope of work" and accordingly, held that the assessee is not eligible for deduction u/s 80IA of the Act in all the years under consideration. 9. We heard the rival contentions and perused the record. The Ld A.R submitted that the assessee along with its consortium members was awarded the work of development of infrastructure facility. In order to execute the Concession Agreement with NHAI, a Special Purpose Vehicle was formed. The work of development of infrastructure facility was divided and allocated to the various consortium members. Accordingly, it was contended that the SPV is only an 'enterprise' or 'undertaking' of the assessee. Accordingly, the Ld A.R contended that the income received by the assessee from its undertaking is eligible for deduction u/s 80IA of the Act. 10. Thus we notice that the case of the assessee herein flows from the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence only those SPVs may be eligible for deduction u/s 80IA(4) of the Act. We observe so because, it is the Special Purpose vehicles, which have entered agreement with NHAI and also raising invoices upon the NHAI. Hence, in the eyes of law, it is the SPVs which are actually executing the work of development and operation of infrastructure facility. We noticed earlier that the SPVs have divided entire work of execution of infrastructure facility and each of the said work have been allocated to members of the consortium. That's how the assessee has been allotted project advisory work. In addition to the assessee, other consortium members have also executed the part of the work allocated to them. It was stated that the assessee has raised invoices upon the SPVs by including its mark-up over the costs incurred by it. That is how the assessee has earned income on the work executed by it for the SPVs. This fact also shows that the assessee has also recognised the SPVs as separate legal entity and not its own enterprise/undertaking. Further, all the Special Purpose Vehicles are filing their return of income separately. If the enterprise is owned by the assessee, the income earned by the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the expression "Profits and gains derived from any business of an industrial undertaking" and "profit derived from industrial undertaking" has been discussed. (f) CIT vs. Chanda Diesels (1994)(75 Taxman 428)(Bom). In this case, the assessee has purchased machinery for manufacturing fuel injection pipes for diesel engines. The question was whether the said purchase of machinery would amount to industrial undertaking or not. Thus it was totally different issue. (g) ITO vs. Oricon (P) Ltd (1990)(32 ITD 645)(Bom). In this case, it was observed that the 'industrial undertaking' have not been defined under the Act. It was held that it would mean a venture or an enterprise carrying on some activities carrying on some activities which had some relation to some industrial activity. This decision only lays down the criteria to understand the meaning of an industrial undertaking. In our view, none of the above said case laws would support the case of the assessee. 14. In view of the foregoing discussions, we are of the view that the Ld CIT(A) was justified in affirming the decision of the AO in rejecting the claim for deduction u/s 80IA of the Act. 15. In the result, all the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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