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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 ..... y 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. 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 enterprise would be credited to the profit and loss account of the assessee, which is not the case here. The members of consortium are also charging the SPVs at more than the cost incurred by them and thus making their own profits. SPVs cannot be considered as an undertaking or enterprise owned by the assessee. Hence, we are of the view that the AO was right in holding that the assessee has only executed a works contract allotted to it by the SPVs. There should not be any dispute that the deduction u/s 80IA is not available to the persons executing works contract. CIT(A) was justified in affirming the decision of the AO in rejecting the claim for deduction u/s 80IA of the Act. Decided against assessee. - Shri B.R. Baskaran (AM) Shri Pavan Kumar Gadale (JM) For the Appellant : Shri F.V. Irani Shri Madhur Agrawal For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed consortium. The contract consisted of implementing a project envisaging Design, construction, finance, operation and maintenance of 4 lane Bridge across river Kosi including its approaches and Guide Bund Afflux Bund from Km 155.00 to 165.00 on NH 57 in the State of Bihar on Annuity basis. This SPV was formed as 100% subsidiary of the assessee herein. Further, it is pertinent to note that the assessee herein is subsidiary of M/s Gammon India Ltd. The assessee herein has provided Project Advisory Services to this SPV and has received fees. (c) Gorakhpur Infrastructure Company Ltd:- M/s Gammon India Ltd, the assessee herein and M/s Associated Transrail Structures Ltd formed consortium. The contract consisted of design, construction, finance, operation and maintenance Km 0.00 to Km 32.27 of Gorakhpur Bypass on NH-28 in the State of Uttar Pradesh on Annuity basis. The assessee herein holds 51% share and M/s Gammon India Ltd holds 39%. As noticed earlier, the assessee herein has claimed deduction u/s 80IA of the Act in respect of income received on the project advisory services provided by it to the three SPVs mentioned above. 5. For the sake of convenience, we extract below relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lfilled. (b) The SPVs are the enterprises of the consortium, which have entered into agreement with NHAI. Hence the second condition is also fulfilled. (c) Since the project has been commenced after 1st day of April, 1995, the third condition also would get fulfilled. In addition to the above, the assessee, by placing reliance on the decision rendered by Hon ble Supreme Court in the case of Bajaj Tempo Ltd (196 ITR 188)(SC), also contended that the incentive provisions should be interpreted liberally. 7. The AO did not accept the above said contentions of the assessee. The AO noticed that the Concession agreement has been entered by SPVs with NHAI. The assessee is only remotely connected with the project, i.e., it has provided advisory services to the SPVs. The AO held that the decision rendered in the case of Bajaj Tempo Ltd is not applicable, since the assessee is not developing or maintaining the infrastructure facility and it is only the SPVs which have entered into the Contract and were executing the projects. The AO also held that other decisions relied upon by the assessee before him are not applicable to the facts of the present case. He held that the assessee has only been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices were awarded to the assessee herein. The engineering and construction work was awarded to the other member of Consortium, viz., M/s Gammon India Ltd. It was also submitted that the assessee herein will raise invoices on the SPV in respect of project advice given by it to the SPVs at cost plus its mark up . 11. However, a perusal of the provisions of sec.80IA(4) would show that the Enterprise , which is executing the infrastructure facility is eligible for the deduction u/s 80IA of the Act subject to the condition that (a) the said enterprise is owned by an Indian company or other forms of organization mentioned in sec. 80IA(4)(i)(a) of the Act. (b) the said enterprise has entered into an agreement with Government or other statutory body mentioned in sec. 80IA(4)(i)(b) of the Act and (c) the said enterprise has started is operation on or after 1st day of April, 1995. The enterprise contemplated under sec. 80IA(4), in our view, refers to the division or department or concern exclusively owned by the assessee as its owner and not as holding company. The profit/loss of Enterprise shall be reflected in the profit and loss account of the assessee. We notice that the Special Purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 80IA is not available to the persons executing works contract. 13. Before us, the Ld A.R placed reliance on following case laws in support his contentions. In our view they are distinguishable:- (a) CIT vs. ITC Ltd (2022)(142 taxmann.com 177)(Cal). It is a case where it was held that the deduction u/s 80IA cannot be denied merely for the reason that the power generated by the undertaking was consumed by the assessee in its entirety. (b) ACIT vs. Ho Hup Simplex JV (2018)(92 taxmann.com 106)(Kol Trib). The question in this case was whether the assessee was a developer or mere works contractor. The moot point in this case was that it was the assessee who was awarded contract for construction of Road. (c) Transstory (India) Ltd vs. ITO (2011)(16 taxmann.com 24)(Visakha). In this case, the Joint Venture Company was acting only as fa ade. The work was executed by the Joint venture partners. The revenue received by the JV was transferred to the partners on back to back basis, i.e., the Joint Venture Company was acting as a paper entity. (d) TRG Industries P Ltd vs. DCIT (2013)(35 taxmann.com 253)(Amritsar Trib.); Bhinmal Contractors Property and Land Developers (P) Ltd vs. ACIT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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