{"id":3443,"date":"2011-07-12T16:31:13","date_gmt":"2011-07-12T11:01:13","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=3443"},"modified":"2011-07-12T16:31:13","modified_gmt":"2011-07-12T11:01:13","slug":"laxmi-civil-engineering-pvt-ltd-vs-acit-itat-pune-s-80-ia4-deduction-available-even-to-contractor-who-merely-develops-but-does-not-operate-maintain-the-infrastructure-facility","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/laxmi-civil-engineering-pvt-ltd-vs-acit-itat-pune-s-80-ia4-deduction-available-even-to-contractor-who-merely-develops-but-does-not-operate-maintain-the-infrastructure-facility\/","title":{"rendered":"Laxmi Civil Engineering Pvt Ltd vs. ACIT (ITAT Pune)"},"content":{"rendered":"\n\n
Click here to download the judgement (laxmi_80_IA_4_contractor_developer.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 80-IA(4) deduction available even to contractor who merely develops but does not operate & maintain the infrastructure facility
\n<\/strong><\/p>\n

Relying on the judgement of the Larger Bench<\/strong> in B. T. Patil & Sons<\/a><\/strong> 126 TTJ 577 (Mum), the assessee\u2019s claim for deduction u\/s 80-IA(4) was denied by the Tribunal on the ground that the assessee was only a contractor and had not complied with all the conditions specified in sub-clauses (a), (b) & (c) of clause (i) of s. 80-IA(4)<\/em>. The order was recalled pursuant to the assessee\u2019s MA claiming that the judgement of the Bombay High Court in ABG Heavy Industries Ltd<\/a><\/strong> 322 ITR 323 covered the issue in its favour. HELD deciding the issue afresh:<\/p>\n

The issues as to (i) whether the word \u201ccontractor\u201d is synonymous with \u201cdeveloper\u201d within the meaning of s. 80-IA(4)(i) and (ii) whether the condition in clause (c) is applicable to a developer who is not carrying on the business of operating and maintaining the infrastructural facilities are covered by the judgement in ABG Heavy Industries<\/a><\/strong> 322 ITR 323 (Bom). There, it was held that the department\u2019s contention that since the assessee was not \u201coperating and maintaining the facility<\/em>\u201d, he was not eligible for s. 80-IA(4) deduction was wrong because a harmonious reading of s. 80-IA(4) led to the conclusion that the deduction was available to an assessee who (i) develops or (ii) operates and maintains or (iii) develops, operates and maintains the infrastructure facility<\/strong>. The 2001 amendment made it clear that the three conditions of development, operation and maintenance were not intended to be cumulative in nature<\/strong>. A developer who is only developing the infrastructure facility cannot be expected to fulfill the condition in sub-clause (c) which is an impossibility<\/strong> and requiring it to be fulfilled will be an absurdity<\/strong>. The result is that even a contractor who merely develops but does not operate or maintain<\/strong> the infrastructure facility is eligible<\/strong> for s. 80-IA(4) deduction (B.T.Patil & Sons Belgaum vs. ACIT<\/a><\/strong> 126 TTJ 577 (Mum) impliedly held not good law). <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The issues as to (i) whether the word \u201ccontractor\u201d is synonymous with \u201cdeveloper\u201d within the meaning of s. 80-IA(4)(i) and (ii) whether the condition in clause (c) is applicable to a developer who is not carrying on the business of operating and maintaining the infrastructural facilities are covered by the judgement in ABG Heavy Industries<\/strong> 322 ITR 323 (Bom). There, it was held that the department\u2019s contention that since the assessee was not \u201coperating and maintaining the facility<\/em>\u201d, he was not eligible for s. 80-IA(4) deduction was wrong because a harmonious reading of s. 80-IA(4) led to the conclusion that the deduction was available to an assessee who (i) develops or (ii) operates and maintains or (iii) develops, operates and maintains the infrastructure facility<\/strong>. The 2001 amendment made it clear that the three conditions of development, operation and maintainence were not intended to be cumulative in nature<\/strong>. The result is that even a contractor who merely develops but does not operate or maintain<\/strong> the infrastructure facility is eligible<\/strong> for s. 80-IA(4) deduction (B.T.Patil & Sons Belgaum vs. ACIT<\/a><\/strong> 126 TTJ 577 (Mum) impliedly held not good law)<\/p>\n

Read more ›<\/a><\/div>\n

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