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TMI Blog2025 (2) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ll under the definition of local authority statutory authority. It is trite law that for claiming deduction u/s 80IA(4) all conditions have to be fulfilled cumulatively. No merit in the claim of deduction u/s 80IA of the Act and the lower authorities have not faulted anywhere by denying the same. Since we have dismissed the claim of the assessee u/s 80IA at the very threshold treating the assessee as a contractor, we do not find it necessary to address the issues taken by the AO for denying the impugned claim. Accordingly both the appeals by the assessee are dismissed. Disallowance of legal and professional fees (fees for technical services) paid to Gulemark TPL JV - sole reason for the disallowance is that Gulemark TPL JV, has not rendered the services, therefore, the claim was disallowed u/s 37 - HELD THAT:- As details were supported by copies of bank payment advices for payment made to GLM were legal and professional fees before the AO along with copies of visa of the two employees of GLM visited India from time to time during the tenure of the project for rendering services supported with copy of leave and license agreement wherein concerned employees of GLM are accommodated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rapid Transit System) Phase 1 A project at Lucknow, Uttar Pradesh, India. 5.1. In this connection, the assessee entered into a contract agreement with LMRCL on 27/05/2016. During the course of scrutiny assessment proceedings, the assessee was asked to justify that its business is an eligible business in terms of Section 80IA of the Act against which deduction have been claimed. The assessee was specifically asked to justify its claim as the agreement has to be with (a) Central Government (b) State Government (c) Local Authority or (d) Statutory Authority and LMRCL does not fit in any of the four categories. 6. The assessee filed detailed reply justifying its claim of deduction u/s 80IA of the Act which did not find any favour with the AO who denied the claim of deduction. The denial was confirmed by the ld. First Appellate Authority. 7. A perusal of the contract agreement shows that LMRCL has agreed to hire the contractor which is the assessee. On perusal of the above related documents we find that the metro rail, as per the contract is conceived by LMRCL who undertook the groundwork of taking necessary approvals/sanctions from the State government/local authorities and floated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment Act, 1999, contains detailed provisions of awarding contract for infrastructural development within the State through private participation. On such facts, the Hon'ble Gujarat High Court upheld that GSRDC was a nodal agency constituted by the State Government and was a government agency as defined u/s 2(e) of Gujarat Infrastructure Development Act, 1999. 9. It is a simple case of hiring a contractor by issuing a tender. It is not a case of build-own-trade (BOT). The moment the underground project is completed it has to be handed over to LMRCL. Thereafter the assessee had no role to play. The business pertains to LMRCL, the ownership vests with LMRCL and it is LMRCL which is carrying on the business of developing operating and maintaining of infrastructural facility i.e., underground Metrorail. 10. In the case of Commissioner of Income-tax, Central-II v. ABG Heavy Industries Ltd. [2010] 322 ITR 323 (Bombay), the Hon'ble Jurisdictional High Court was seized with the fact that the assessee was responsible for supplying, installation, testing, commissioning and maintenance of cranes for the period of 10 years after which the cranes would rest with JNPT, free of cost. On such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atutory Authority as LMRCL, does not fit in any of them. It can be seen from the record that LMRCL was incorporated on 25/11/2013 under the Companies' Act, 1956 as a special purpose vehicle between the Central and State Government with equity share of 50:50, therefore, in our understanding of the law it cannot be regarded as Central Government or State Government, nor does it fall under the definition of local authority statutory authority. It is trite law that for claiming deduction u/s 80IA(4) of the Act, all conditions have to be fulfilled cumulatively. 12. Considering the peculiar facts of the case in hand from all possible angles we do not find any merit in the claim of deduction u/s 80IA of the Act and the lower authorities have not faulted anywhere by denying the same. Since we have dismissed the claim of the assessee u/s 80IA of the Act, at the very threshold treating the assessee as a contractor, we do not find it necessary to address the issues taken by the AO for denying the impugned claim. Accordingly both the appeals by the assessee are dismissed. 13. Coming to the appeals of the revenue, there is a delay and the delay is condoned. 14. The common grievance in both t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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