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TMI Blog2024 (11) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... facility at Sardar Vallabhbhai Patel International Airport and the assesse was supposed to undertake necessary financial and entrepreneurial risk so as to qualify as a developer. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE D.N.RAY Appearance: For the Appellant(s) No. 1: Mr. Varun K. Patel (3802). For the Respondent : None. ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. Dev Patel for learned advocate Mr. Varun K. Patel for the appellant. 2. This Tax Appeal is filed under Section 260A of the Income Tax Act, 1961 (for short the Act ) by the Appellant-Revenue proposing the following substantial question of law arising out of the judgment and order dated 29th January, 2024 passed by the Income Tax Appellate Tribunal (for short the Tribunal ) in ITA No. 231/Ahd/2012 for Assessment Year 2008-09 : Whether in the facts and circumstances of the case and in law, the order of the learned ITAT is erroneous, illegal and ex-facie perverse, because the learned ITAT has deleted the addition of Rs. 6,86,60,491/ - made on account of disallowance of deduction claimed u/s. 80IA (4) of the Income Tax Act, 1961, despite the fact that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clarification that the work to be done was not just construction of the airport but all other associated work, General and Special Conditions of the Contract Agreement (famished through spiral bound paper books), Bill of Quantities which is part of Contract Documents mentioned at serial number 20 of the Contract Documents list. (Contract Documents are mentioned in Article 2 of the Contract agreement enclosed as Annexure-3 of this order). Bill of Quantities submitted during appellate proceedings through submission dated 30.11.2011 were relied upon. From the perusal of the same it is clear that the appellant had to do the following works which brought into existence a full-fledged New Domestic Arrival building at Ahmedabad airport. i) Construction of New Domestic Arrival Building and other associated works at S.V.P.l. Airport, Ahmedabad ii) Curtain Glazing System iii) Development of Car Parking Other miscellaneous related works. iv) Internal / External electrification, v) Air conditioning system, vi) Fire Protection System, vii) CCTV surveillance System, viii) Flight Information Display System ix) and Public Address System The Scope of work itself shows that it was not just simp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant clauses of the documents are furnished in the main written submissions . Relevant portion from reply dated 30.11.2011 is re-produced below: Therefore, it has been our respectful contention that our activity under the impugned contract with AAI cannot be said to have been limited to execution simpliciter of the contractual work but it also encompasses work of highly technical and independent nature that was carried out by us on our own, with our own technical skills by assuming certain specific risk and deploying our resources which were over and above the specifications laid down in the tender document. It is in this context that the provision of the Sec. treating development, maintenance and operating the facility as independent activities ought to be interpreted, more so in order to advance the objective of the statute rather than to restrict the same, more so when what is work contract is also not spelt out or defined in the retrospectively inserted Explanation in the year 2009. Thus the appellant undertook obligations which amounted to 'developing the infrastructure facility . The Contract Agreement despite the strict clauses of monitoring, approval and control by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he controversy in the present case would have to be considered. The contention of the Revenue is that the assessee was not engaged in developing the facility at all and that under the Contract that was entered into between the assessee and JNPT all that the assessee was required to carry out was to supply and install cranes at the Port. The submission cannot be accepted. The expression 'development' has not been artificially defined for the purposes of Section 80IA of the Act and must, therefore, receive its ordinary and natural meaning. Under the terms of the contract between the assessee and JNPT, the assessee undertook an obligation for supplying, installing, testing, commissioning and maintenance of Container Handling equipment namely, the cranes in question. JNPT has a dedicated Container Handling Terminal. The case of the assessee is that the only activity at the Terminal consists of the loading, unloading and storage of containers. Under the contract, the assessee was obligated to provide the equipment in question in an operable condition. The contract envisaged two different options; the first being one under which the assessee would carry out operation and maintena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a BOLT basis under the contract with JNPT. On the fulfillment of the lease of ten years, there was a vesting in the JNPT free of cost. . 21 ......The provision was intended to (reproduced in sub-para 7 below) In the case of the appellant, the appellant did not supply Machines but rather constructed and developed a full-fledged arrival block of the airport with all facilities, for the Airports Authority of India and is covered by Hon'ble Bombay High Court decision in the case of ABG Heavy Industries Limited. It would be too narrow a view to hair-split the decision on the ground that it does not discuss the Explanation about Works Contract, when in principle what matters is the work undertaken or done by the appellant. And the appellant did hand over a fully developed New Domestic Arrival Block of the airport at Ahmedabad. 3.6. The Tribunal, considering the above analysis carried out by the CIT (Appeals) held as under : 16. In the instant facts we have to firstly see whether the assessee is engaged in development for any new infrastructural facility or is engaged only in carrying out repair works or other incidental works, not amounting to development of a new infrastructural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee 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 AAl 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 instant case, it is observed that the assessee has undertaken to bring into existence a new infrastructure facility being new domestic arrival block at Sardar Vallabhbhai Patel International ..... X X X X Extracts X X X X X X X X Extracts X X X X
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