Income Tax Appellate Tribunal - Hyderabad
Nagarjuna Constructions Company ... vs Assessee on 28 June, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH 'B', HYDERABAD
BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER and
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA No. 141/Hyd/2007 - A.Y. 2003-04
M/s. Nagarjuna Vs. Asst. CIT
Construction Company Ltd., Central Circle-3
Hyderabad Hyderabad
PAN: AAACM7335C
Appellant Respondent
ITA No. 1312/Hyd/2008 - A.Y. 2001-02
ITA No. 1313/Hyd/2008 - A.Y. 2004-05
ITA No. 640/Hyd/2006 - A.Y. 2002-03
ITA No. 465/Hyd/2006 - A.Y. 2002-03
M/s. Nagarjuna Vs. The Dy. CIT
Construction Company Ltd., Central Circle-3
Hyderabad Hyderabad
PAN: AAACM7335C
Appellant Respondent
Appellant by: Sri S. Rama Rao
Respondent by: Sri Gnana Prakash
Date of hearing: 28.06.2012
Date of pronouncement: 27.08.2012
ORDER
PER CHANDRA POOJARI, AM:
These appeals by the assessee are directed against the different orders of the CIT(A)-I, Hyderabad.
2. Except in ITA No. 640/Hyd/2006, the issue in these appeals is relating to allowability of deduction u/s. 80IA(4)(i) of the Income-tax Act, 1961. For brevity, as the issues are common in all the above appeals, except ITA No. 640/Hyd/2006, we consider the facts as narrated in ITA No. 141/Hyd/2007. The assessee is a public limited company engaged in development of infrastructure facilities like water supply projects including construction of canals, road development including flyovers, bridge construction 2 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== including reconstruction, etc., for various State Governments and public sector undertakings and corporations. The total income was returned at Rs. 8,87,25,877 whereas the income assessed is Rs. 14,86,40,590. The assessee had claimed deduction u/s. 80IA for an amount of Rs. 12,30,33,718 but during the course of assessment hearing, the assessee restricted the claim to Rs. 5,98,76,713. The said claim of the assessee u/s. 80IA was disallowed by the Assessing Officer. The Assessing Officer after going through the claim of the assessee, was of the opinion that the assessee is not entitled for deduction u/s. 80IA of the Act. On appeal, the CIT(A) confirmed the order of the Assessing Officer. Against this disallowance, the assessee is in appeal before us in ITA Nos. 141/Hyd/07. Similar is the grievance in assessee appeals in ITA No. 1312/Hyd/08, 1313/Hyd/08 and 465/Hyd/06.
3. The learned authorised representative of the assessee drew our attention to the provisions of section 80 IA (4) of the Act. He read before us the said section 80 IA(4)(i) of the Act and submitted that by the Finance Act, 2001 with effect from 1-4-2002 which was amended as follows:-
"(i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a mew infrastructure substituted (i) developing (maintaining or operating or (iii) developing, maintaining and operating."
4. He also drew our attention to the Circular No. 14 of 2001 which reads as under:
Circular No. 14/2001 Explanatory Notes Finance Act, 2001 - Explanatory Notes on provisions relating to Direct Taxes Definition of 'Infrastructure facility' in section 10(23G) to be same as that in section BO-IA(4) 3 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== 17.1 Under the existing provisions contained in clause (23G) of section 10, any income of an infrastructure capital fund or an infrastructure capital company by way of interest, dividend (other than dividends referred to in section 115-0) and long term capital gains from investment made by way of equity or long-term finance in an approved enterprise wholly engaged in the business of (i) developing, (ii) maintaining and operating, or (iii) developing, maintaining and operating an infrastructure facility shall not be included in computing the total income.
17.2 Fiscal incentives for development of infrastructure have been provided in the Income-tax Act as a package, so that tax holiday is allowed under section 80-IA to the infrastructure enterprise and income from long-term investment made by the Infrastructure Capital Company or Infrastructure Capital Fund in the approved enterprise is exempt under section 10(23G). Thus, whenever a decision is taken to revise the scope of fiscal incentives to infrastructure by amending section 80-1A, necessary amendments are required to be made in sections 10(23G) as well.
17.3 Thus, as a measure of rationalisation, Finance Act, 2001, has amended section 10(23G) so as to provide that income by way of interest, dividend or long term capital gains of an infrastructure capital fund or an infrastructure capital company, from investments in any enterprise or undertaking wholly engaged in the business referred to in sub-section (4) of section 80-IA or in a housing project referred to in sub-section (10) of section 80-18 will not be included in computing the total income. This will remove the requirement of consequential amendment in section 10(23G) as a result of any future change in section Bo-IA regarding infrastructure.
17.4 This amendment will take effect from 1st April, 2002, and will, accordingly, apply in relation to the assessment year 2002-03 and subsequent assessment years.
[Section 5(g)] Tax holiday for infrastructure rationalised 47.1 Under the provisions of section Bo-IA, roads, highways, bridges, airports, ports and rail systems are 4 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== regarded as infrastructure facility and the enterprises engaged in developing or operating and maintaining or developing, operating and maintaining such infrastructure are entitled to a tax holiday for five years and a deduction of 30% of profits for the next five years. This benefit is applicable in respect of such specified infrastructural facility becoming operational on or after 1st April, 1995. The enterprise claiming such benefit has to enter into an agreement with the Central or State Government or a local authority or any other statutory authority, by which the enterprise which develops such facility, has to transfer such facility to the Government or public authority after the stipulated period. In other words, the required condition for availing of this benefit is that transfer under BOT (Build, Own, Transfer) or BOOT (Build, Own, Operate and Transfer) schemes has to be met.
47.2 Investments in infrastructure have to compete with investment in other sectors to be attractive. There is, in particular, a need to encourage investment in the area of surface transport, water supply, water treatment system, irrigation project, sanitation and sewerage system or solid waste management systems. With this in view, section Bo-IA has been amended to relax the existing two tier benefit to provide a ten year tax holiday. Keeping in view, their capital intensive nature, the higher allowances of depreciation in the initial years to such enterprises and the need for improved cash flows, an infrastructure facility in the nature of a road (including a toll road), bridge, rail system, highway project, water supply project, sanitation, sewerage and solid waste management system shall be allowed a ten year tax holiday in place of a two-tier tax holiday. Such an enterprise may avail of the tax holiday consecutively for any ten years out of twenty years beginning from the year in which the undertaking begins operating the infrastructure facility.
47.3 In the case of other infrastructure, namely, for airport, port, inland port and inland waterways, section Bo-IA has been further amended to relax the existing two tier fiscal incentive. Instead, an identical ten year tax holiday may be availed of in a block of initial fifteen years.
47.4 The condition that such infrastructure facility shall be transferred to the Central Government, State 5 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== Government or local authority has also been removed. However, the agreement with such authorities for creation of such infrastructure will have to be entered into.
47.5 Under sub-section (B) of section Bo-IA, where any goods are transferred for a consideration to any other business of the assessee, the consideration should correspond to the market value of such goods. As in certain cases, the transfer may relate to services, the provision has been accordingly amended to clarify that this would include services. Such services may include marketable services of operation and maintenance (O&M) in case of infrastructure facilities, marketable services for distribution of electricity and specified marketable services in telecom. Instead of the words "industrial undertaking" occurring in section 8O-IA, the word "undertaking" has also been substituted in the provision for the same reason.
47.6 These amendments will take effect from the 1st day of April, 2002, and will, apply in relation to the assessment years 2002-03 and subsequent years.
On reading the above section and the notes on causes/ CBDT Circular it is very clear ~ that with effect from 1- 4-2002 " the enterprises engaged in developing or operating and maintaining or developing, operating and maintaining such infrastructure are entitled to a tax holiday. Earlier to the above substitution there was no 'or' between the word M developing, (ii) maintaining and operating or (iii) developing, maintaining and operating, on entering into an agreement with Government would be eligible for deduction under section 801A."
5. From the above, he submitted that the enterprises engaged in developing or operating and maintaining or developing, operating and maintaining such infrastructure are entitled to a tax holiday. Earlier to the above substitution there was no word 'or' between the word developing, (ii) maintaining and operating or (iii) developing, maintaining and operating, on entering into an agreement with Government would be eligible for deduction under section 801A of the Act. He drew our attention to the decision of 6 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== the Mumbai ITAT in the case of ACIT vs. Bharat Udyog Limited (118 ITD 336) wherein held that:-
"The amendment in section 80-IA was brought about by the Finance Act, 1995, with effect from 1-4-1996. By virtue of this amendment, the deduction under section 80-IA was provided to any enterprise carrying on the business of developing, maintaining and operating the infrastructure facility. Thus, to be eligible for this deduction, an assessee was required to carry out all the three activities, i.e., (i) to develop, (ii) to maintain and (iii) to operate. After the amendment effected in section 80-IA by the Finance Act, 1999 with effect from 1-4-2000, the deduction under section 80-IA(4) became available to any enterprise carrying on the business of
(i) developing or (ii) maintaining and operating, or (iii) developing, maintaining and operating any infrastructure facility. [Para 7] Sub-clause (c) of section 80-IA(4) is applicable to an enterprise which is engaged in 'operating and maintaining' the infrastructure facility on or after 1-4-
1995. It is not applicable to the case of an enterprise, which is engaged in mere 'development' of infrastructure facility and not its 'operation' and 'maintenance'. Therefore, the question of 'operating and maintaining' of infrastructure facility by such an enterprise before or after any cut off date cannot arise. When the Act provides for deduction under section 80- IA(4), undisputedly for an enterprise, which is only 'developing' the infrastructure facility, unaccompanied by 'operating and maintaining' thereof by such entity, there cannot be any question of providing a condition for such an enterprise to start operating and maintaining the infrastructure facility on or after 1-4- 1995. Since the assessee was only a developer of the infrastructure project and it was not maintaining and operating the infrastructure facility, sub-clause (c) of sub-section (4) of section 80-IA was not applicable. [Para 8] Further, from the assessment year 2000-01, deduction under section 80-IA(4) is available if the assessee carries on the business of any one of the above- mentioned three types of activities. When an assessee is only developing an infrastructure facility/project and is not maintaining nor operating it, obviously such an 7 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== assessee would be paid for the cost incurred by it; otherwise, how would the person, who develops the infrastructure facility project, realize its cost? If the infrastructure facility, just after its development, is transferred to the Government, naturally the cost would be paid by the Government. If a person who only develops the infrastructure facility is not paid by the Government, the entire cost of development would be a loss in the hands of the developer as he is not operating the infrastructure facility. When the Legislature has provided that the income of the developer of the infrastructure project would be eligible for deduction, it presupposes that there can be income to developer, i.e., to the person who is carrying on the activity of only developing infrastructure facility. Obvious, as it is, a developer would have income only if he is paid for development of infrastructural facility, for the simple reason that he is not having the right/authorization to operate the infrastructure facility and to collect toll there from and has no other source of recoupment of his cost of development. Therefore, the business activity of the nature of build and transfer also falls within eligible construction activity, that is, activity eligible for deduction under section 80-IA inasmuch as mere 'development' as such and un-associated/un- accompanied with 'operate' and 'maintenance' also falls within such business activity as is eligible for deduction under section 80-IA. Therefore, merely because the assessee was paid by the Government, for development work, it could not be denied deduction under section 80-IA (4). A person, who enters into a contract with another person, would be a contractor no doubt; and the assessee having entered into an agreement with the Government agencies for development of the infrastructure projects, was obviously a contractor; but that did not derogate the assessee from being a developer as well. The term 'contractor' is not essentially contradictory to the term 'developer'. On the other hand, rather section 80-IA(4) itself provides that the assessee should develop the infrastructure facility as per the agreement with the Central Government, State Government or a local authority. So, entering into a lawful agreement and thereby becoming a contractor should, in no way, be a bar to the one being a developer. Therefore, merely because, in the agreement for development of infrastructure facility, assessee was referred to as contractor or because some basic specifications were 8 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== laid down, it did not detract the assessee from the position of being a developer; nor would it debar the assessee from claiming deduction under section 80- IA(4).[Para 9] Therefore, the assessee, who was only engaged in developing the infrastructural facility, i.e., road, and not engaged in the 'operating and maintaining' the said facility, was entitled to the benefits of the deduction under section 80-IA(4). The provisions of sub-clause (c) of clause (i) of section 80-IA (4) were inapplicable to the instant case. Hence, the order of the Commissioner (Appeals) was correct. [Para 13]"
6. Further, he drew our attention to the decision of Bombay High Court in the case of CIT vs. Glenmark Pharmaceuticals Limited (319 ITR 199), the relevant extract of the head note reads as under:-
"By the Finance Act of 2009, which substituted the provisions of section 194C, the expression 'work' has now been defined in clause (iv ) of the substituted Explanation. Clauses (a) to (d ) are the same as clause (a ) to (d) of the erstwhile Explanation III. However, the Explanation (e ) has now been inserted. [Para 26] What has weighed in the introduction of clause (e ) of the Explanation was on-going litigation on the question as to whether TDS was deductible on outsourcing contracts. Clause (e) was introduced "to bring clarity on this issue" or, in other words, to remove the ambiguity on the question. Clause (e) as introduced contains a positive affirmation that the expression 'work' will cover manufacturing or supplying a product, according to the requirement or specification of a customer, by using material purchased from such a customer. Clause (e) has placed the position beyond doubt by incorporating language to the effect that the expression 'work' shall not include manufacture or supply of a product according to the requirement or specification of a customer by using material which is purchased from a person other than such customer. In other words, the circumstance that the requirements or specifications are provided by the purchaser is not regarded by the statute as being dispositive of the question as to whether a contract constitutes a contract of work or sale. What is of significance is whether material has 9 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== been purchased from the customer, who orders the product. When the material is purchased from the customer who orders the products, it constitutes a contract of work, while, on the other hand, where the manufacturer has sourced the material from a person other than the customer, it would constitute a sale. What is significant is that in using the words which clause (e) uses in the Explanation, the Parliament has taken note of the position that was reflected in the circulars issued by the CBDT since 29-5-1972. The judgment of the Supreme Court in Associated Cement Co. Ltd. v. CIT [1993J 201 ITR 435/ 67 Taxman 346 gave an expansive definition to the expression 'work' and rejected the attempt of the assessee in that case to restrict the expression 'work' to works contract. Both before and after the judgment of the Supreme Court, the expansive definition of the expression 'work' co-existed with the revenue's understanding that a contract for sale would not be within the purview of section 194C. The revenue always understood section 194C to mean that, though a product or thing is manufactured to the specifications of a customer, the agreement would constitute a contract for sale, if (i ) the property in the article or thing passes to the customer upon the delivery; and (ii) the material that was required was not sourced from the customer/ purchaser, but was independently obtained by the manufacturer from a person other than the customer. The rationale for this was that where a customer provides the material, what the manufacturer does is to convert the material into a product desired by the customer and ownership of the material being that of the customer, the contract essentially involves work of labour and not of a sale. The Parliament recognized the distinction which held the field, both administratively in the form of circulars of the CBDT and judicially in the judgments of the several High Courts. Consequently, the principles underlying the applicability of section 194C as construed administratively and judicially in decided cases, find statutory recognition in the Explanation. The Explanation, therefore, as the Memorandum explaining the clauses of the Finance Bill, 2009 states, was in the nature of a clarification. Where an explanatory provision is brought to remove an ambiguity or to clear a doubt, it is reflective of the law as it has always stood in the past, whereas, in the instant case, an Explanation is introduced statutorily to adopt an understanding of the law-both in the form of the 10 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== circulars of the CBDT and in judicial decision. The Parliament must be regarded as having intended to affirm that intent. In the instant case, the intent has held the field for over three decades. [Para 28) The fact that the specifications were provided by the assessee to the manufacturer/supplier would make no difference to the legal position. The agreement in the instant case was on a principal-to-principal basis. The manufacturer had his own establishment where the product was manufactured. The material required in the manufacture of the article or thing was obtained by the manufacturer from a person other than the assessee. The property in the articles passed upon the delivery of the product manufactured. Until delivery, the assessee had no title to the goods. The goods had an identifiable existence prior to delivery. [Para 31) The reason that a specification or requirement is enunciated by the assessee constitutes a matter of business expediency. A purchaser who desires to get the product, which he intends to sell under his brand name, or trademark, manufactured from a third party would be interested in ensuring the quality of the product. The trademark has associated with it an assurance of the quality of the goods which are marketed and are traceable to the origin of the goods. Associated with the trademark is the goodwill and reputation which is associated with the mark. This is particularly so in the case of a pharmaceutical product where the ultimate consumer is legitimately entitled to ensure that her health is not prejudiced by the consumption of a product not meeting prescribed standards. The owner of a mark, therefore, introduces specifications to ensure that the product meets the standards justifiably associated with the reputation of the mark. The specification ensures the observance of standards. Similarly, a clause relating to exclusivity is not inconsistent with a transaction of sale. Here again much depends upon the nature of the product. Restrictive covenants of this kind are intended to protect the intellectual and other property rights of a party which markets its goods by requiring a manufacturer to observe norms of specifications and exclusivity.
The law is, therefore, consistent with the transaction being regarded as a transaction of sale, provided that 11 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== the requirements of a contract of sale are met. They were net in the instant case. The contract entered into by the assessee was not a contract for carrying on any work within the meaning of section 194C. [Para 32]"
7. Further, he submitted that in the case of the assessee agreements entered with the Government authorities and it is not related a part of the work and work was undertaken on turnkey basis. The site has been handed over to the assessee for carrying on the work as per the requirements of the Government and also operating system for a certain period mentioned therein and completed the project at the end of the above said period and as such the assessee is a developer and also operating the system for a certain period. According to the counsel for assessee, it has been developing the infrastructure project relating to water supplying scheme by designing, erection, testing and commissioning of project on turnkey basis. Broadly the technical nature of the work undertaken by the assessee is as follows:
i) Designing and Manufacturing of pipes: The assessee specially designed and manufactured Pre-stressed concrete pipes and it has been done in accordance with specific requirements.
ii) Design and manufacturing of pipe fittings or specials.
iii) Transporting, Laying and Joining of pipes conforming with specifications. The activity involves earth work excavation, trench excavation, hard rook blasting, lowering and laying of pipes, fitting of specials, fitting of rubber rings at the joints, testing pipe joints and pipeline.
iii) Construction of pump house, providing and fitting of pump sets. Supply and fitting of submersible pumps, centrifugal pumps, turbine pumps, submersible motors, motors for 12 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== turbines and centrifugal pump sets, transformer, generator, panel boards etc.
iv) Design and construction of raw water pumping stations, water treatment plant, treated water pumping station, treated water transmission main, construction of surge tank and pipe connection arrangement, booster stations, internal transmission main and feeder mains, construction of service reservoirs and master reservoirs.
v) Mobilisation of labourers, [preparation of plans technical expertise, supervision, co-ordination and control, set up manufacturing facility nearby the project site to manufacture project specific pipes as per the required specifications which requires well equipped machines, employment of skilled labour and technical experts, equipment to transport heavy pipes to laying sites, equipment to lift and lowering of pipes at the excavated sites, provide qualified and experience engineer for each project site etc to bring in to existence an infrastructure facility. Manufacturing of pipes to sites, excavation under various conditions of soil and rock, lowering and laying of pipes, jointing and testing of pipe joint and pipe line as a whole, construction of pump houses, storage tank/collection well, treatment plants, distribution plants etc and all these together develop in to a new infrastructure water supply facility.
8. Accordingly, the assessee is entitled for deduction under section 80IA of the Act. He submitted that the assessing officer ignored the fact that in all the contracts handed over to the assessee for development of the infrastructure facility. In few cases, after operation for certain period, had to re-hand over back 13 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== the entire site with the infrastructure facility developed to the owner. He drew our attention to the copies of agreement entered with the State Government. He submitted that the above observation of the assessing officer is factually incorrect as it can be seen from the agreements and contracts the site if handed over back to the employer after development of the entire facility and in few cases after operation and maintenance for a period specified therein. According to the authorised representative of the assessee, the assessee has undertaken the construction of the entire infrastructure facility as envisaged by the Government in the agreements. The assessee has entered into agreement with Government thereby satisfying the conditions envisaged in section 80IA of the Act. He drew our attention to a sample of the agreement in which the nature of work is "Surveying, design, supply, installation, testing and commissioning lift irrigation on turnkey basis.
9. He drew our attention to all the various agreements which were carried out by the assessee in these assessment years. He submitted that out of the above agreements the contracts which are undertaken as turnkey projects are entitled for deduction u/s 80IA.
10. According to the authorised representative, all the contracts of the site which was handed over by the Government Bodies to the assessee for development of the infrastructure facility and on completion, in few cases after operation for certain period, the entire site with the infrastructure facility developed to the owner. He submitted that the lower authorities wrongly relied on the order of the Tribunal in the case of Patel Engineering Limited (94 ITD 411) wherein the Tribunal has not considered the retrospective amendment by Finance Act, 2007. According to the authorised representative, after amendment to section 80IA(4)(i)(b) 14 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== which reads as " it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; the word 'it' means undertaking and 'develop' is independent of operating and maintaining or developing, operating and maintaining. For this purpose, he relied on the order of the ITAT, Mumbai larger third Member Bench in the case of B.T. Patil & Sons Belgaum Construction Pvt. Ltd. (126 TTJ (Mumbai) 577; 35 SOT 171, 32 DTR 1. He submitted that the assessee engaged in development of infrastructure facility by way of constructing irrigation canals and irrigation systems. In this connection, he drew our attention to the order of the Tribunal in the case of B.T. Patil & Sons cited supra specifically to paras 36 to 41 which reads as follows:-
"36. Here it is important to mention that the Legislature inserted the word 'or' between (i) and (ii) with effect from 1-4-2002, which is applicable to assessment year 2002-03. So with effect from the assessment year 2002-03, not only the enterprise (i) developing, (ii) operating and maintaining the infrastructure facility shall be entitled to deduction, but also the enterprise which is only (i) developing or (ii) operating and maintaining the infrastructure facility. From such year onwards the enterprise which only develops the infrastructure facility and thereafter transfers it to someone else for operating and maintaining on behalf of transferee shall also be covered for the purposes of granting benefit. The difference in the situation between assessment year 2002-03 onwards and prior two years is that whereas the operation and maintenance of the infrastructure facility on behalf of the enterprise developing is necessary in the former period, but in the later period, the operation and maintenance shall be on behalf of the transferee enterprise itself. Since in the years in question, the transfer of the enterprise for operation and maintenance has necessarily to be on behalf of the enterprise developing the infrastructure facility, and for the time being assuming without admitting the contention of the Id. AR that the assessee 15 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== is developer of infrastructure facility, it does not satisfy the other condition of its transfer for operating and maintaining on its behalf for the obvious reason that there is no transfer at all of any infrastructure facility from the assessee, much less for operating and maintaining on its behalf 37. Be that as it may it remains to be examined as to whether the assessee can be called as 'developer' within the meaning of section 80IA(4). The learned counsel submitted that the work done by the assessee made it a developer entitled to deduction. Shri Vijay Mehta, the learned counsel for the intervener contended that the "works contract" has not been defined in the context of section 8o-IA and, hence, in the absence of assignment of any definition by the statute, its meaning should be understood in the common parlance. According to him, a developer is a person who develops the facility and such person mayor may not be a contractor. On the other hand, a contractor is stated to be a legal term whose rights and duties vis-a-vis contract are determined by way of legal document called the contract. He cited an example that if a contract to construct a highway from Mumbai to Delhi is given to a person he is contractor as well as developer. As against that a person who has been given a contract for painting or beautification is merely a contractor but not a developer. According to him, while developing a project, a developer has to make technological inputs, entrepreneurial inputs, etc. Besides, there is financial involvement in terms of deployment of man and machine as well as bank guarantees. He went on to explain that the developer undertakes the risk and reward of the project and is accountable to the authorities for the development work carried out by him. In his opinion, the assessee in the present case cannot be characterized anything other than a developer. 38. In the circumstance, the learned Departmental Representative submitted that the construction is a minor part of the development. According to him, development includes the works to be done relating to the planning, designing, engineering and financing, etc., of the project. He relied on the judgment of the Hon'ble Supreme Court in the case of Hindustan Aeronautics Ltd. v. State of Orissa [1984) 55 STC 327 in which it has been observed that in a contract for work, the person producing has no property in the thing produced as a whole, even if part or whole of the material used by him may have been his property earlier. He also relied on another judgment of 16 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== the Hon'ble Supreme Court in the case of Tamil Nadu v. Anandam Vishwanathan [1989) 1 SCC 613 in which it was held that the nature of contract can be found only when the intention of parties is found out. The fact that in the execution of the works contract some material are used and the property in the goods so used passes to the other party, the contractor undertaking the work will not necessarily be deemed, on that account, to sell the material. It was, therefore, argued that the developer is a person who brings in additional resources by way of investment and technical expertise for developing the infrastructure facilities. Since the assessee had simply done a part of work of civil construction relating to the infrastructure facility, he stated that it is not eligible for deduction.
39. We find it as an undisputed position that the words 'developer' and 'contractor' have not been defined in or for the purposes of section 80-1A. The primary question which arises is that how to find out the meaning of a word or an expression which is not defined in the Act. It is a settled legal position that ordinarily the meaning or definition of a word used in one statute cannot per se be imported into another as has been held by the Hon'ble Supreme Court in the case of Union of India v. R.C. Jain [1981]2 SCC 308. Therefore, the meaning of the words 'developer' and 'contractor', as put forth before us by the rival parties from other legislations, be they State or Central enactments, cannot be automatically applied in the present context. In order to ascertain the meaning of a word not defined in the Act, a useful reference can be made to the General Clauses Act, 1897. If a particular word is not defined in the relevant statute but has been defined in the General Clauses Act, such definition throws ample light for guidance and adoption in the former enactment. According to section 3 of the General Clauses Act, the definitions given in this Act shall have applicability in all the Central Acts unless a contrary definition is provided of a particular word or expression. On scanning section 3 of the General Clauses Act, we observe that neither the word 'contractor' nor 'developer' has been defined therein. Thus, the General Clauses Act is also of no assistance in this regard. Going ahead, when these words are neither defined in the Income-tax Act, 1961 nor in the General Clauses Act, the next question is that where from to find the meaning of such words. There is no need to wander here and there in 17 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== search of answer which has been aptly given by the Hon'ble jurisdictional High Court in the case of Abdulgafar A. Nadiadwala v. Asstt. CIT [2004] 267 ITR 4881 (Bom.) wherein the Hon'ble High Court was looking into the meaning of the words 'goods' and 'merchandise', which are not defined under section 80HHC in the context of Income-tax Act, 1961. The Hon'ble High Court held that : "it is well-settled that in the absence of there being anything contrary to the context, the language of a statute should be interpreted according to the plain dictionary meaning of the terms used therein". Similar view has been expressed by the Hon'ble Supreme Court in the case of CWT v. Officer-In- Charge (Court of Wards) [1976]105 ITR 133 in which it was held that the ordinary dictionary meaning of a word cannot be disregarded.
40. Coming back to our point of ascertaining the meaning of the words 'contractor' as well as 'developer', which have neither been defined in the Act nor in the General Clauses Act, we fall upon Oxford Advanced Learner's Dictionary to find out their meaning. According to this dictionary, . "developer" is a person or company that designs and creates new products, whereas "contractor" is a person or a company that has a contract to do work or provides services or goods to another. The New Shorter Oxford Dictionary defines the word "contractor" as : person who enters into a contract or agreement. Now chiefly spec. a person or firm that undertakes work by contract, esp. for building to specified plans". In the light of the meaning ascribed to these words by the dictionaries, it is observed that the developer is a person who designs and creates new products. He is the one who conceives the project. He may execute the entire project himself or assign some parts of it to others. On the contrary, the contractor is the one who is assigned a particular job to be accomplished on the behalf of the developer. His duty is to translate such design into reality. There may, in certain circumstances, be overlapping in the work of developer and contractor, but the line of demarcation between the two is thick and unbreachable. When the person acting as developer, who designs the project, also executes the construction work, he works in the capacity of contractor too. But when he assigns the job of construction to someone else, he remains the developer simpliciter, whereas the person to whom the job of construction is assigned, becomes the contractor.18 ITA No. 141/Hyd/2007 & Ors.
M/s. Nagarjuna Construction Co. Ltd.
=========================== The role of developer is much larger than that of the contractor. It is no doubt true that in certain circumstances, a developer may also do the work of a contractor but a mere contractor per se can never be called as a developer, who undertakes to do work according to the pre-decided plan.
`
41. Further it is relevant to note that the word "developing" used in sub-section (4) is with reference to "infrastructure facility". When we further peruse the meaning of the word "infrastructure facility" as per Explanation, it is found to have been defined exhaustively by referring to a road project, airport, port, etc., a highway project, a water supply project and irrigation project, etc. Therefore, the use of word "developing" in juxtaposition to infrastructure facility indicates that what is eligible for deduction under this sub-section is the profits and gains derived from the development of infrastructure facility and not something de hors it. So in order to be eligible for deduction the development should be that of the infrastructure facility as a whole and not a particular part of it, as has been contended by the Id. AR. It may be possible that some part of development work is assigned by the developer to some contractor for doing it on his behalf. That will not put the doer of such work into the shoes of a developer.
11. Further, he relied on the judgment of Bombay High Court in the case of ABG Heavy Industries Limited 322 ITR 323 (Bom) wherein held that:
"Section 80-IA of the Income-tax Act, 1961, was introduced to provide an impetus to the growth of infrastructure in the nation. A sound infrastructure is a sine qua non for economic development. Absence of infrastructure poses significant barriers to growth and development. A model which relied exclusively on the provision of basic infrastructure by the State was found to be deficient. Section 80-lA was an instrument of legislative policy, conceived with a view to provide an impetus to private sector participation in infrastructural projects. Contemporaneously, with the provisions which were made by Parliament in section 80-IA of the Act, explanatory circulars issued in an administrative capacity by the Central Board of Direct Taxes held the field. These circulars gave expression to the scope and 19 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== ambit of the concession was provided by section 80-lA. The evolution of section 80-lA would show a progressive liberalisation of the legislative scheme, in the interests of aiding the growth of infrastructure. The administrative circulars issued by the Central Board of Direct Taxes in implementation of section 80-IA similarly liberalised the scheme, consistent with the Act.
The expression "development" has not been artificially defined for the purposes of section 80-lA of the Act and must, therefore, receive its ordinary and natural meaning. An assessee does not have to develop the entire port in order to qualify for a deduction under section 80-lA. Parliament did not legislate a condition impossible of compliance. A port is defined to be an infrastructure facility and the circular of the Board clarified that a structure for loading, unloading, storage, etc., at a port would qualify for deduction under section 80 IA. Parliament amended the provision of section 80 IA of the Act so as to clarify that in order to avail of a deduction, the assessee (i) develop,(ii) operate and maintain or (ii) develop, operate and maintain the facility. The condition as regards development, operation and maintenance of an infrastructure facility was contemporaneously construed by the authorities at all material times, to cover within its purview the development of an infrastructure facility under a scheme by which an enterprise would build, own, lease and eventually transfer the facility. This was perhaps a practical realisation of the fact that a developer may not possess the wherewithal, expertise or resources to operate a facility, once constructed. Parliament eventually stepped in to clarify that it was not invariably necessary for a developer to operate and maintain the facility. In Bajaj Tempo v. CIT [1992]196 ITR 188, the Supreme Court emphasized that a provision in a taxing statute granting incentives for promoting growth and development should be construed liberally. In the present case, the administrative circulars issued Central Board of Direct Taxes proceeded on that basis by adopting a liberal view of the scope and ambit of the provisions of section 80-IA of the Act. Parliamentary intervention endorsed the administrative practice. After section 80-IA was amended by the Finance Act of 2001, the section applies to an enterprise carrying on the business of (i) developing; or (ii) operating; maintaining; or (iii) 20 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== developing, operating and maintaining any infrastructure facility which fulfils certain conditions. Those conditions are ownership of the enterprise by a company registered in India or by a consortium (ii) an agreement with the Central or State Government, local authority of statutory body; and (iii) the start of operation and maintenance of infrastructure facility on or after April 1, 1995. The requirement that the operation and maintenance of the infrastructure facility should commence after April 1, 1995 has to be harmoniously construed with the main provision under which a deduction is available to an assessee who develops; or 'operates and maintains; or develops, operates and maintains an infrastructure facility. Unless both the provisions are harmoniously construed, the object intent underlying the amendment of the provision by the Finance Act of 2001 would be defeated. A harmonious reading of the provision in its entirety would lead to the conclusion that the deduction is available to an enterprise which (i) develops; or (ii) operates and maintains; or (iii) develops maintains and operates that infrastructure facility. However, the commencement of the operation and maintenance of the infrastructure facility should be after April 1, 1995.
The assessee, in terms of the policy of the Government of India to encourage private sector participation in the development of infrastructure, bid for and was awarded a contract for leasing of container handling cranes at the Jawaharlal Nehru Port Trust (JNPT). In pursuance of the contract, the assessee deployed rail mounted quay side cranes, rail mounted gantry cranes and rubber tired gantry cranes at the container handling terminal of the JNPT. JNPT had a dedicated container handling terminal. According to the assessee, the only activities of the terminal consisted of loading, unloading and storage of containers. Under contracts dated September 2, 1994 and October 16, 1995, JNPT accepted the bid submitted by the assessee for supply, installation, testing, commissioning and maintenance of the cranes. By the terms of the agreement, JNPT agreed to pay lease charges in a total sum of Rs. 215.50 crores over a period of ten years. The contract envisaged two options. Under the first option, operation and maintenance was to be carried out by the assessee. Under the second option only maintenance was to be carried out by the assessee. Under the contracts, JNPT reserved the right to exercise the option to request the 21 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== assessee to carry out both operation and maintenance during the lease period or to carry out only maintenance while operation was done by JNPT. The contracts stipulated, inter alia, the submission of a performance guarantee bond representing 10 per cent of the average annual contract value computed with reference both to maintenance and operation. The assessee assumed the responsibility of making the equipment available for operation for a minimum number of days as stipulated in the contract and became liable to pay liquidated damages for non- availability of the equipment after commissioning. After the expiry of the lease period of ten years, the assessee was liable to hand over the equipment to JNPT free of cost. Under the contract the assessee furnished an indemnity to JNPT towards damages that may be sustained to the equipment or to any property of the port trust or to the lives persons or properties of others. The assessee assumed other contractual obligations including amongst them, the liability to insure the equipment, to indemnify JNPT towards the claims of workers' compensation and for compliance with labour legislation. The assessee claimed special deduction under sec. 80-IA. The Assessing Officer rejected the claim but the Commissioner (A)) and Tribunal allowed it. On appeal to the High Court:
Held, dismissing the appeal, that on May 31, 2004, JNPT issued a certificate confirming the award of contracts to the assessee on September 2, 1994 and October, 16, 1995 for supply, installation, testing, commissioning and maintenance of container handling equipment on lease for a period of ten years for loading and unloading of containers at the port and that the cranes that were to be supplied by the assessee formed an integral part of the port. JNPT clarified that the contracts had been executed under the BOLT scheme and in accordance with its directions; the cranes would be transferred to the port trust at no cost on the expiry of a period of ten years of the commencement of the contract. The obligations which had been assumed by the assessee under the terms of the contract were obligations involving the development of an infrastructure facility. Section 80-IA of the Act essentially contemplated a deduction in a situation where an enterprise carried on the business of developing, maintaining and operating an infrastructure facility. A port was defined to be included within the 22 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== purview of the expression "infrastructure facility". The obligations which the assessee assumed under the terms of the contract were not merely for supply and installation of the cranes, but involved a continuous obligation right from the supply of the cranes to installation, testing, commissioning, operation and maintenance of the cranes for a term of ten years after which the cranes were to vest in JNPT free of cost. An assessee did not have to develop the entire port in order to qualify for a deduction under section 80-IA. The condition of a certificate from the port authority was fulfilled and JNPT certified that the facility provided by the assessee was an integral part of the port. The assessee developed the facility on a BOLT basis under the contract with JNPT. On the fulfilment of the lease of ten years, there was a vesting in the JNPT free of cost. The finding that the assessee had developed the infrastructure facility and that it was engaged in operating the cranes was, therefore, based on the material on record. The fact that the assessee was also maintaining the cranes was not disputed. The facility was commenced after April 1, 1995. The assessee was entitled to the special deduction under section 80-IA".
12. The learned counsel for the assessee placed reliance on two decisions- Mumbai High Court in the case of CIT vs. ABG Heavy industries Limited 322 ITR 323 and ITAT Pune Bench in the case of Laxmi Civil Engineering Pvt. Ltd., vs. Addl. CIT Kolhapur (unreported/ITA No. 766/Pn/09 dated 8-6-2011). It was urged by the learned authorised representative that these decisions supported the proposition that (i) the ITAT's decision in the case of B.T. Patil & Sons, Larger Bench (Mumbai) reported in 126 TTJ 577 is no longer good law, and (ii) the distinction between developer and contractor is no longer relevant in the context of changed law explained by the Mumbai High Court in the case of ABG Heavy Industries (supra) and followed within its jurisdiction by the Pune Bench of the ITAT in the case of Laxmi Civil Engg. (supra). Further, he submitted that order of the Tribunal relied by the Departmental Representative in ITA No. 2932/Mumbai/2010 relating to the A.Y 2006-07 in the case of The Indian home Pipe 23 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== Company has no application to the facts of assessee case. In the case before Mumbai Bench, the assessee was supplying, laying of pipelines and was only a works contract which is evident from para 3 of that order. On the contrary the assessee is engaged in development of water supply project as evident from the tender allotted by various authorities, project has been undertaken on turnkey basis. The project also includes operation and maintenance for a period one year to two year. As the assessee is engaged in designing, manufacturing of pipes, maintenance, operating and maintenance of the project and more so the assessee itself incurred expenditure for procuring men and materials, machines and the investment is by the assessee itself, being so it can not be equated with Indian Home pies Company. Further, in the case of Indian Home pies Company, the Tribunal has recorded the finding of fact that there is no dispute that the assessee is covered by the Explanation below the section 80IA(13) of the Income Tax Act. But in the case of present assessee, it has been disputed the applicability of Explanation to section 80IA(13) s the undertaken various contracts on turnkey basis as submitted in earlier paras.
13. On the other hand, the learned departmental representative submitted that the meaning of the word "developer" and the eligibility of the business to claim deduction meant for 'development of infrastructural facilities' within the meaning of section 80IA has to be seen in the context of the genesis and legislative history of the section as held by the Supreme Court in the case of CIT vs. N.C. Buddhiraja (204 ITR 412,433) the provision as introduced by the Finance Act, 1991 as amended by Finance Act, 1996, Finance Act, 1999, Finance Act, 2001, up to Finance Act 2007 and Finance Act, 2009 and as explained by Circular 794 dated 9-8-2000 Circular 779 dated 14-9-1999 (240 ITR st. 32), Circular 794 dated 9-8-2000, Circular 779 dated 14- 25 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
===========================
14. The particulars furnished in the paper book shows the rate analysis, Bill of quantities etc., which makes it clear that the assessee had no autonomy in matters of design and specification which completely vested with the employer. The only lawful entitlement of the assessee was to be paid for the measurement of work completed at rates agreed upon. The partial and sectional nature of the proposed work is immediately clear from this notice and it is also apparent from this that the section of the road proposed for improvement has no independent existence capable of satisfying the requirement of section 80 IA (2). Therefore, this project is incapable of commencement of operations by itself, or to qualify the larger infrastructure facility of which it is a part.
15. The DR submitted that the contractor was granted mobilisation advance as well as interest-free advance for machinery purchase, should be required them and it would be readily apparent from the agreement that there is no element of entrepreneurial initiative or financial participation of the contractor in this kind of a project The successful bidder merely executes a Government contract and gets paid for it at mutually agreed rates and the nature of responsibilities assumed under the other contracts as per agreements included in the paper book are similar. It is further stated that during the hearing, the authorised representative of the assessee was at pains to emphasise that the assessee undertook maintenance work and was hence it is to be treated as a developer. However, it is clear from the document as furnished in the paper book that the maintenance function was actually remedying of defects for a prescribed period. No separate charges have been collected and this cannot be seen as a maintenance function.
16. On these facts, having regard to the responsibilities assumed under the agreement, the assessee cannot be seen as a 26 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== developer; instead he plays the role of an executor/contractor. Be that as it may, it was urged by the departmental representative in the reply that the issue whether the assessee was a developer for the purposes of section 80IA after the changes in law w.e.f. 1-4- 2002 is not material for adjudication of the grounds in the impugned appellate orders. This is because in so far as the contracts in question are in the nature of works contracts, the explanation inserted below section 80IA (13) with retrospective effect from 1-4-2000 has over-riding influence and debars the assessee's claim. Further it is contended that the introduction of the explanation below section 80 IA(13) in 2007 with retrospective effect from 1-4-2000 puts matters beyond doubt. The law on the subject of application of a retrospective amendment is clear from the special Bench decision of the Tribunal in the case of Aquarius Travels P Ltd. Vs. ITO (111 ITD 53). Such provisions should be applied in pending proceedings, even when they have not been involved earlier. As matters stand, therefore, the most important question for examination on facts is whether the business agreement in question can be termed a works contract or not. If the answer is in affirmative, nothing else matters because the Explanation takes over. If not, the other nuances such a development/operation etc., and other specified conditions become relevant. Reliance was placed in this regard on the decision of the Mumbai High Court in the case of Glenmark Pharma (324 ITR 199, 207) which digests the case law for ascertainment of whether facts of the agreement would amount to a contract for work or for sale.
17. The ld. DR placed reliance on the decision of jurisdictional High Court in the case of Dr. Mrs. Renuka Datla vs. CIT (240 ITR
463) (AP), that provisions granting exemptions have to be strictly construed. It was held by the Supreme Court in the case of IPCA Laboratory Limited vs. DCIT (SC) 266 ITR 521 that when there is 27 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== no ambiguity, provisions cannot be interpreted to confer a benefit upon the assessee. The provision is incapable of application to the facts of the assessee's case because the assessee is only an executor of a contract, which is in turn, part of a larger project undertaken by the Government, or its agency. It has been argued in rejoinder by the departmental representative that such reliance is neither correct nor relevant in deciding the issues on hand. In the case of Laxmi Civil Engg. Pvt. Ltd., the argument of the assessee that was accepted by the ITAT, Pune Bench is broadly- the assessee is a contractor, every contractor is a developer as per the Mumbai High Court decision in the case of ABG Heavy Industries and a developer need not operate and maintain the infrastructure facility, as held by the Mumbai High Court in the case of ABG Heavy Industries.
18. The DR submitted that the decision of the Pune Bench of the ITAT in the case of Laxmi Civil Engg. (supra) is of no help in deciding the issues in the impugned appeals for the reason that the terms and conditions of the contracts and the nature of obligations assumed there-under, by the business are not discussed in the said order. This is the factual fulcrum on which the decision of the ITAT (larger Bench) in B.T. Patil as well as the Mumbai High Court in ABG case was decided. Without such detail, there is no point of comparability between the Pune Bench decision and the other cases. The unanswered questions emerging there-from are -
i) Can we assume that there was a BOLT contract or was it a works contract?
ii) Can we assume that the assessee took ownership control of the asset created?
iii) The circumstances under which the enterprise in ABG Heavy Industries became akin to a developer, and do they obtain in the case of LCE? Such as 10 year ownership; retransfer; assumption of assured 28 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== responsibility regarding operational readiness, etc., noticed in ABG Heavy Industries are not noticed in the facts of the case as digested by the afore mentioned decision of the Pune Bench of the ITAT in the case of LCE.
iv) The unbundling of conditions of development, operation & maintenance, and development operation and maintenance, in the sense of making them non cumulative by amendment of law effective from 1-4- 2002 is not the only relevant issue. The larger issue is whether the assessee is a developer in the first place.
v) In the case of B.T. Patil, the cumulative or non cumulative satisfaction of conditions in section 80IA(4)(i) was never a material fact. This was so not only because the impugned appeals related to pre 1-4- 2002 period, but also because the matter was deci9ded on the preliminary issue of whether the assessee was a developer or not in the first place.
vi) Some of the attributes of a developer were discussed in the case of B.T. Patil, none of whom were absent in the case of ABG Heavy Industries.
19. According to the DR, the decision of the Mumbai High Court, though later in time was different in facts that there was no occasion even to refer to the ITAT's decision in the case of B.T. Patil. Therefore, it can be said that the decision of the Mumbai High Court in the case of ABG Heavy Industries will be binding in its jurisdiction for infrastructure contract cases, only in so far as the facts of the case are compatible. For the same reason, there can be no adverse implication for the precedent value of the B T Patil case. As submitted hereinabove, on immediate and necessary consequence of the retrospective amendment introduced by the Finance Act, 2009 inserting Explanation below section 80 IA(13), is that any business transacted in terms of a works contract stands disqualified from seeking deduction under section 80I(A(4). The decision of the Mumbai High Court in the case of ABG would have no application from this point of view also. Since the agreement in ABG was a BOLT agreement and not a works contract their Lordships had no occasion to consider the 29 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== Explanation introduced in Finance Act, 2009 with effect from 1-4- 2001. Even if it is assumed, hypothetically, that the agreement in ABG was in the nature of a works contract, or that every contractor was a developer, the decision of the Mumbai High Court without considering the Explanation cannot operate to overrule the ITAT's decision in the case of B.T. Patil where the Bench of the Tribunal considered the effect of the explanation and it was explained by the Hyderabad Bench of the Tribunal in the case of Hyderabad Chemicals Supplies Limited (ITA No. 352/Hyd/2005 and 6 others appeals dated 21-1-2011, in the context of an apparent conflict between a Special Bench (Ahmedabad) decision of the ITAT and Madras High Court at para-15 on page-8 as follows:-
"Further, judgment of High Court though not of the jurisdictional High Court, prevails over an order of the Special Bench even though it is from the jurisdictional Bench of the Tribunal, however, where the judgment of the non jurisdictional High Court, though the only judgment on the point, has been rendered without having been informed about certain statutory provisions that are directly relevant, it is not to be followed."
20. Without prejudice to the argument that the stand that the Mumbai High Court's order in ABG runs on completely different facts, it is respectfully pointed out that this decision cannot be a binding precedent, in any case, for the above-cited reason also and this issue can be seen in another perspective. There is nothing in the case of ABG Heavy Industries that supports the view that the 'developer' has to e seen de hors the contract and its stipulations. In the case of ABG Heavy Industries the Revenue took the stand that the assessee was not a developer because it was only a supplier of the equipment. This did not find favour because it was held that the nature of the business had to be seen in terms of the obligations assumed under the contract which included not only supply and installation of the cranes but also testing, commitment 30 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== of operational readiness for a period of ten years on the pain of liquidated damages and eventual re-transfer after such period. In the case of ABG Heavy Industries, the creation of certain standalone parts of the part complex qualified for being termed on infrastructure project because the Board Circular 793 dated 23-6- 2000 clarified that part of the project would qualify if so certified by the Port Authorities. The container handling cranes assembly was certified to be an integral part of the Port Complex by the Port Authority. This is contextually very different from parts of the running length of a highway or irrigation canal being executed on a rate contract. The Department's argument that the assessee did not actually operate or maintain the facility in question was not upheld because the benefits of the section were held to be available to BOT/BOLT contracts by CBDT Circulars, which were any way binding on the IT authorities. In the case of the present case, it is not even claimed by the assessee that the work was carried out under a BOT/BOLT contract, or that it was not a works contract. It is further submitted that the distinction between business of development operation/maintenance and development/ operation/ maintenance was removed with the change in law effective from 1-4-2002, and that this was explained by the decision of the Mumbai High Court in the case of ABG Heavy Industries is fallacious for the following reasons:
"The Mumbai High Court decision was rendered in the context of a BOLT contract, which was in any case clarified by the Board Circular to qualify for the deduction under section 80IA. It was noticed by their Lordships that the subsequent changes in the law effective from 1-4-2002 merely mirrored this liberalised outlook. That is not the same thing as saying that a business in the nature of a works contract qualified for the deduction in spite of not operating/maintaining the facility. The decision of the larger Bench in the case of B.T. Patel was not un-ware of the change in law effective from 1-45-2002 as would be evident from para 36 of the order. The change making the conditions of 31 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== development/operation/maintenance non cumulative was not relevant since the case related to pre 1-4-2002 period. In the case of B.T. Patel the larger Bench enunciated certain tests to determine whether the business was one of a 'developer' or a mere 'contractor'. The briefly stated facts are as follows:
"The distinction between creation of product vs. Rendering of service (para -40), owner vs. Executor of owner's plan with reference to project specification (para-42), vesting of property, subject to retransfer if need be (para 46) and need for interpretation to avoid absurd results (para 50)".
21. The DR submitted that in view of the terms of the relevant contract, it was possible to give a finding that the business was not one of 'development' per se. Therefore, the changes in law after 1-4-2002 were not even called into play in the case of B.T. Patil. It is further submitted that the Mumbai High Court's decision in the case of ABG Heavy Industries not only runs on different facts, it does not even refer to the case of B T Patil. Furthermore, the Mumbai High Court's stand that the nature of the business should be seen in the context of the obligations assumed under the contract only complements, not contradicts the larger Bench's distinction between a developer and contractor simpliciter, as noted hereinabove. It would be wrong and therefore to suggest that the case of B.T. Patil has been impliedly over-ruled by the High Court's decision. The departmental representative also places reliance on another decision of the Mumbai Bench of the Tribunal in the case of Indian Hume Pipe Co. Ltd., vs. DCIT ITA No. 5172/Mum/2008, dated 29-7-2011 for assessment year 2004-05 wherein held that the company was not entitled to deduction u/s 80IA(4) of the Income Tax Act 1961 as it was only a works contract and not a development of eligible infrastructure projects.. This decision pronounced after the Pune Bench decision in the case of Laxmi Civil Engg.. considers the Tribunal decision of B.T. Patil as well as its jurisdictional High Court decision in the 32 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== case of ABG and goes on to hold that the assessee is not entitled to the deduction under section 80IA (4) in view of the Explanation introduced with retrospective effect.
22. We have heard both the parties and perused the material on record. In our opinion, this issue came for consideration before this Tribunal in the case of M/s. Koya & Co. Construction (P) Ltd. v. ACIT, 51 SOT 203 (Hyd) (URO) wherein the Tribunal held as follows:
"24. ... We find that the provisions of Section 80IA (4) of the Act when introduced afresh by the Finance Act, 1999, the provisions under section 80IA (4A) of the Act were deleted from the Act. The deduction available for any enterprise earlier under section 80IA (4A) are also made available under Section 80IA (4) itself. Further, the very fact that the legislature mentioned the words (i) "developing" or (ii) "operating and maintaining" or (iii) "developing, operating and maintaining" clearly indicates that any enterprise which carried on any of these three activities would become eligible for deduction. Therefore, there is no ambiguity in the Income-Tax Act. We find that where an assessee incurred expenditure for purchase of materials himself and executes the development work i.e., carries out the civil construction work, he will be eligible for tax benefit under section 80 IA of the Act. In contrast to this, a assessee, who enters into a contract with another person including Government or an undertaking or enterprise referred to in Section 80 IA of the Act, for executing works contract, will not be eligible for the tax benefit under section 80 IA of the Act. We find that the word "owned" in sub-clause (a) of clause (1) of sub section (4) of Section 80IA of the Act refer to the enterprise. By reading of the section, it is clears that the enterprises carrying on development of infrastructure development should be owned by the company and not that the infrastructure facility should be owned by a company. The provisions are made applicable to the person to whom such enterprise belongs to is explained in sub-clause (a). Therefore, the word "ownership" is attributable only to the enterprise carrying on the business which would mean that only companies are 33 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== eligible for deduction under section 80IA (4) and not any other person like individual, HUF, Firm etc.
25. We also find that according to sub-clause (a), clause
(i) of sub section (4) of Section 80-IA the word "it"
denotes the enterprise carrying on the business. The word "it" cannot be related to the infrastructure facility, particularly in view of the fact that infrastructure facility includes Rail system, Highway project, Water treatment system, Irrigation project, a Port, an Airport or an Inland port which cannot be owned by any one. Even otherwise, the word "it" is used to denote an enterprise. Therefore, there is no requirement that the assessee should have been the owner of the infrastructure facility.
26. The next question is to be answered is whether the assessee is a developer or mere works contractor. The Revenue relied on the amendments brought in by the Finance Act 2007 and 2009 to mention that the activity undertaken by the assessee is akin to works contract and he is not eligible for deduction under section 80IA (4) of the Act. Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen from the agreements entered into by the assessee with the Government. We find that the Government handed over the possession of the premises of projects to the assessee for the development of infrastructure facility. It is the assessee's responsibility to do all acts till the possession of property is handed over to the Government. The first phase is to take over the existing premises of the projects and thereafter developing the same into infrastructure facility. Secondly, the assessee shall facilitate the people to use the available existing facility even while the process of development is in progress. Any loss to the public caused in the process would be the responsibility of the assessee. The assessee has to develop the infrastructure facility. In the process, all the works are to be executed by the assessee. It may be laying of a drainage system; may be construction of a project; provision of way for the 34 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== cattle and bullock carts in the village; provision for traffic without any hindrance, the assessee's duty is to develop infrastructure whether it involves construction of a particular item as agreed to in the agreement or not. The agreement is not for a specific work, it is for development of facility as a whole. The assessee is not entrusted with any specific work to be done by the assessee. The material required is to be brought in by the assessee by sticking to the quality and quantity irrespective of the cost of such material. The Government does not provide any material to the assessee. It provides the works in packages and not as a works contract. The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility. The losses suffered either by the Govt. or the people in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development. Thereafter, the assessee has to undertake maintenance of the said infrastructure for a period of 12 to 24 months. During this period, if any damages are occurred it shall be the responsibility of the assessee. Further, during this period, the entire infrastructure shall have to be maintained by the assessee alone without hindrance to the regular traffic. Therefore, it is clear that from an un-developed area, infrastructure is developed and handed over to the Government and as explained by the CBDT vide its Circular dated 18-05-2010, such activity is eligible for deduction under section 80IA (4) of the Act. This cannot be considered as a mere works contract but has to be considered as a development of infrastructure facility. Therefore, the assessee is a developer and not a works contractor as presumed by the Revenue. The circular issued by the Board, relied on by learned counsel for the assessee, clearly indicate that the assessee is eligible for deduction under section 80IA (4) of the Act. The department is not correct in holding that the assessee is a mere contractor of the work and not a developer.
27. We also find that as per the provisions of the section 80IA of the Act, a person being a company has to enter into an agreement with the Government or Government undertakings. Such an agreement is a contract and for the purpose of the agreement a person may be called as a contractor as he entered into a 35 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== contract. But the word "contractor" is used to denote a person entering into an agreement for undertaking the development of infrastructure facility. Every agreement entered into is a contract. The word "contractor" is used to denote the person who enters into such contract. Even a person who enters into a contract for development of infrastructure facility is a contractor. Therefore, the contractor and the developer cannot be viewed differently. Every contractor may not be a developer but every developer developing infrastructure facility on behalf of the Government is a contractor.
28. We find that the decision relied on by the learned counsel for the assessee in the case of CIT vs. Laxmi civil Engineering works [supra] squarely applicable to the issue under dispute which is in favour of the assessee wherein it was held that mere development of a infrastructure facility is an eligible activity for claiming deduction under section 80IA of the Act after considering the Judgement of the Mumbai High Court in the case of ABG Heavy Engineering [supra]. The case of ABG is not the pure developer whereas, in the present case, the assessee is the pure developer. We also find that Section 80IA of the Act, intended to cover the entities carrying out developing, operating and maintaining the infrastructure facility keeping in mind the present business models and intend to grant the incentives to such entities. The CBDT, on several occasions, clarified that pure developer should also be eligible to claim deduction under section 80IA of the Act, which ultimately culminated into Amendment under section 80IA of the Act, in the Finance Act 2001, to give effect to the aforesaid circulars issued by the CBDT. We also find that, to avoid misuse of the aforesaid amendment, an Explanation was inserted in Section 80IA of the Act, in the Finance Act-2007 and 2009, to clarify that mere works contract would not be eligible for deductions under section 80IA of the Act. But, certainly, the Explanation cannot be read to do away with the eligibility of the developer; otherwise, the parliament would have simply reversed the Amendment made in the Finance Act, 2001. Thus, the aforesaid Explanation was inserted, certainly, to deny the tax holiday to the entities who does only mere works contact or sub-contract as distinct from the developer. This is clear from the express intension of the parliament while introducing the Explanation. The explanatory memorandum to Finance Act 2007 states 36 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== that the purpose of the tax benefit has all along been to encourage investment in development of infrastructure sector and not for the persons who merely execute the civil construction work. It categorically states that the deduction under section 80IA of the Act is available to developers who undertakes entrepreneurial and investment risk and not for the contractors, who undertakes only business risk. Without any doubt, the learned counsel for the assessee clearly demonstrated before us that the assessee at present has undertaken huge risks in terms of deployment of technical personnel, plant and machinery, technical know-how, expertise and financial resources.
29. As per submission of the assessee's counsel broadly the technical nature of the work undertaken by the assessee is as follows:
i) Designing and Manufacturing of pipes: The assessee specially designed and manufactured Pre-stressed concrete pipes and it has been done in accordance with specific requirements.
ii) Design and manufacturing of pipe fittings or specials
ii) Transporting, Laying and Joining of pipes conforming with specifications. The activity involves earth work excavation, trench excavation, hard rook blasting, lowering and laying of pipes, fitting of specials, fitting of rubber rings at the joints, testing pipe joints and pipeline.
iii) Construction of pump house, providing and fitting of pump sets. Supply and fitting of submersible pumps, centrifugal pumps, turbine pumps, submersible motors, motors for turbines and centrifugal pump sets, transformer, generator, panel boards etc.
iv) Design and construction of raw water pumping stations, water treatment plant, treated water pumping station, treated water transmission main, construction of surge tank and pipe connection arrangement, booster stations, internal transmission main and feeder mains, construction of service reservoirs and master reservoirs.37 ITA No. 141/Hyd/2007 & Ors.
M/s. Nagarjuna Construction Co. Ltd.
===========================
v) Mobilisation of labourers, [preparation of plans technical expertise, supervision, co-ordination and control, set up manufacturing facility nearby the project site to manufacture project specific pipes as per the required specifications which requires well equipped machines, employment of skilled labour and technical experts, equipment to transport heavy pipes to laying sites, equipment to lift and lowering of pipes at the excavated sites, provide qualified and experience engineer for each project site etc to bring in to existence an infrastructure facility. Manufacturing of pipes to sites, excavation under various conditions of soil and rock, lowering and laying of pipes, jointing and testing of pipe joint and pipe line as a whole, construction of pump houses, storage tank/collection well, treatment plants, distribution plants etc and all these together develop in to a new infrastructure water supply facility.
30. Further, the order of Tribunal in the case of B.T. Patil cited supra is prior to amendment to sec 80IA(4), after the amendment the section 80IA(4) read as (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility, prior to amendment the "or" between three activities was not there, after the amendment "or" has been inserted w.e.f. 1-4-2002 by Finance Act 2001.
31. Accordingly, the assessee is entitled for deduction under section 80IA of the Act on the projects which involve above activities. Therefore, in our considered view, the assessee should not be denied the deduction under section 80IA of the Act if the contracts involves development, operating, maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act. In our opinion the contracts which contain above features to be segregated on this deduction u/s. 80-IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitle for deduction u/s 80IA of the Act. The profit from the contracts which involves development, operating, maintenance, financial 38 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== involvement, and defect correction and liability period is to be computed by assessing officer on pro-rata basis of turnover. The assessing officer is directed to examine the records accordingly and grant deduction on eligible turnover as directed above. It is needless to say that similar view has been taken by the Chennai Bench of the Tribunal and deduction u/s. 80IA was granted in the case of M/s. Chettinad Lignite Transport Services (P) Ltd., in ITA No. 2287/Mds/06 order dated 27th July, 2007 for the assessment year 2004-05. Later in ITA No. 1179/Mds/08 vide order dated 26th February, 2010 the Tribunal has taken the same view. ..."
23. In the case of GVPR Engineers Ltd. v. ACIT, 51 SOT 207 (Hyd) (URO) wherein the Tribunal held that deduction u/s. 80IA is available to developers who undertake entrepreneurial investment risk and not for the contractors, who undertake only business risk. Without any doubt, the assessee clearly demonstrated that the plant and machinery, technical know-how, expertise and financial resources. Therefore, if the contracts involve design, development, operation & maintenance, financial involvement and defect correction and liability period, then such contracts cannot be called as simple works contract, to deny the deduction under section 80IA. The contracts which contain above features to be segregated have to be granted deduction under section 80IA and the other agreements which are pure works contracts hit by the Explanation to section 80IA(13) are not entitled for deduction under section 80IA. The profit from the contracts which involve design, development, operating & maintenance, financial involvement and defect correction and liability period is to be computed by the Assessing Officer on pro rata basis of turnover. The Assessing Officer is directed to examine the records, accordingly, and grant deduction on eligible turnover.
24. In the case of KMC Construction Ltd. v. ACIT, 51 SOT 214 (Hyd) (URO) wherein the Tribunal has taken the same view.
39 ITA No. 141/Hyd/2007 & Ors.M/s. Nagarjuna Construction Co. Ltd.
===========================
25. In the case of Sushee Hi-Tech Constructions Pvt. Ltd. vs. DCIT, in ITA Nos. 269 & 1165/Hyd/2009 and ITA No. 1171/Hyd/2010 dated 16th March, 2012 wherein the Tribunal held as follows:
" ... The assessee should not be denied the deduction under section 80IA of the Act as the contracts involves, development, operating, maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract. In our opinion the contracts which contain above features to be segregated and on this deduction u/s. 80-IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitle for deduction u/s 80IA of the Act. The profit from such contracts which involves development, operating, maintenance, financial involvement, and defect correction and liability period is to be computed by assessing officer on pro-rata basis of turnover. The assessing officer is directed to examine and grant deduction on eligible turnover as directed above."
26. In view of the above orders of the Tribunal on similar issue relating to deduction u/s. 80-IA(4), we are inclined to remit the issue back to the file of the Assessing Officer to decide the issue in the light of the above orders
27. The next for our consideration in ITA No. 465/Hyd/06 is with regard to claim of bad debts. The assessee claimed bad debts of Rs. 26,42,293 with regard to advance made to suppliers of labourers, miscellaneous sub-contractors and suppliers who are normally local residents of the project site. Further the assessee claimed deduction in respect of debt of Rs. 1,68,79,143. The CIT(A) while considering the issue relating to the allowability of bad debts of Rs. 26,42,293 given a finding that the assessee not discharged the genuineness of the case and also failed to furnish complete address of debtors, invoice no., amount and date. Being so, the claim was disallowed.
40 ITA No. 141/Hyd/2007 & Ors.M/s. Nagarjuna Construction Co. Ltd.
===========================
28. Before us the learned AR submitted that these debts were made in usual course of business of the assessee and all the requirements of section 36(1)(vii) of the IT Act, 1961 were complied with and the assessee has written of the amount of Rs. 26,42,293 as bad and it has to be allowed.
29. On the other hand, the learned DR submitted that the assessee has not discharged the onus cast upon it to prove that it is a genuine trade debt as it is given in the course of business of the assessee.
30. We have heard both the parties on this issue. In our opinion, the assessee is to claim a bad debt, the debt should arise in the course of business activity of the assessee, it is to be a bad debt and that bad debt is to be written off in the books of account of the assessee. Once it is written off, the claim of the assessee is to be allowed. Accordingly, we remit back this issue to the file of the Assessing Officer to examine the issue whether the debt is written off in the books of account of the assessee as required under the provisions of section 36(1)(vii) of the IT Act and decide there upon.
31. With regard to disallowance of claim of bad debt by enhancement of assessment by the CIT(A), the learned AR submitted that the assessee complied with all the requirements of provision of section 36(1)(vii) of the Act.
32. The learned DR submitted that the assessee claimed a bad debt of Rs. 1,68,79,143 and the same was allowed by the Assessing Officer without verification. Out of the above amount Rs. 62,19,596 was claimed in respect of Tamil Nadu Housing 41 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== Board (TNHB). The assessee company completed the construction of 560 flats under agreement with TNHB and it was paid a sum of Rs. 64,21,67,483. The final bill of Rs. 13,44,482 was not paid by the TNHB and bank guarantee was invoked to the tune of Rs. 62 lakhs. Further TNHB demanded payment of Rs. 36,56,954 towards excess payment on 12.8.1997. Further there was a demand for payment by TNHB on 18.9.1997 for Rs. 16,99,702. The dispute was referred to arbitration wherein the assessee claimed an amount of Rs. 75,44,482 and the TNHB claimed an amount of Rs. 1,28,94,517. The Tribunal directed the assessee to pay a sum of Rs. 53,50,035 to TNHB. The said award was not accepted by the assessee and the assessee filed an appeal before the Madras High Court and claimed an amount of Rs. 62,19,596 as bad debt. This was noticed by the CIT(A) and the same was disallowed by him which resulted in enhancement of income.
33. We have heard both the parties on this issue. As noticed by the CIT(A), there was a dispute regarding this issue and the dispute is pending before the Madras High Court. Further, it is not possible to claim the debt as bad debt in this assessment year 2002-03 on the basis of Tribunal award dated 10.1.2000 which is relevant to the assessment year 2000-01. Being so, we do not find any infirmity in the order of the CIT(A) and the same is confirmed on this issue.
34. Now coming to the appeal in ITA No. 640/Hyd/2006, the issue is relating to levy of penalty u/s. 271(1)(c) of the Income-tax Act, 1961.
35. Facts of the issue in brief are that the assessee filed a return of income for assessment year 2002-03 on 28.8.08 admitting total income of Rs. 3,17,19,933. The revised return was filed on 24.10.02 admitting income at Rs. 3,31,82,219. The revised return 42 ITA No. 141/Hyd/2007 & Ors. M/s. Nagarjuna Construction Co. Ltd.
=========================== was processed u/s. 143(1) on 27.11.2002. The case was selected for scrutiny and the assessment u/s. 143(3) was completed on 31.3.2005 determining total income at Rs. 3,62,19,230. The assessee filed an appeal before the CIT(A) against the order u/s. 143(3) challenging two additions made by the Assessing Officer. Disallowance of Rs. 20,89,171 u/s. 43B and disallowance of prior period expenses of Rs. 9,10,302. During the course of appeal proceedings before CIT(A), it was observed that the assessee's claim of deduction u/s. 80IA amounting to Rs. 10,12,57,865 was prima facie not in accordance with the relevant provisions of the Act, though allowed by the Assessing Officer without any examination. Hence, to verify the assessee's claim, it was asked to file the details regarding the works undertaken by the assessee. The CIT(A) given a finding that the assessee is not entitled for deduction u/s. 80IA. Thus, he enhanced the assessment by income of Rs. 11,01,19,754 and thereafter initiated the penalty proceedings u/s. 271(1)(c) of the Act and given a finding that the assessee made a wrong claim of deduction u/s. 80IA to the tune of Rs. 13,18,017. According to the CIT(A), the admission of assessee of having filed inaccurate particulars of income in its return of income and having considered the income, is after detection made during the first appellate proceedings. Accordingly, he levied penalty of Rs. 4,70,532 u/s. 271(1)(c) of the Act. Against this, the assessee is in appeal before us.
36. We have heard both the parties on this issue. The issue relating to allowability of deduction u/s. 80IA for this assessment year 2002-03 is also subject matter of appeal before us in ITA No. 465/Hyd/06. Being so, in earlier paras, we have remitted back the issue relating to allowability of deduction u/s. 80IA to the file of the Assessing Officer for fresh consideration. Hence, at this stage levy of penalty u/s. 271(1)© is premature. Accordingly, we are of the opinion that levy of penalty at this stage is not justified.
43 ITA No. 141/Hyd/2007 & Ors.M/s. Nagarjuna Construction Co. Ltd.
=========================== Even otherwise, the Supreme Court in the case of CIT vs. Reliance Petro Products (P) Ltd. (322 ITR 158) held that mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. If the contention of the Revenue is accepted then in case of every Return where the claim made is not accepted by the AO for any reason, the assessee will invite penalty u/s 271(1)(c). That is clearly not the intendment of the Legislature.
37. Accordingly, appeal No. 640/Hyd/2006 by the assessee is allowed. The other appeals of the assessee in ITA No. 141/Hyd/ 2007, 1312/Hyd/2008, 1313/Hyd/2008 and 465/Hyd/2006 are partly allowed for statistical purposes.
Order pronounced in the open court on 27th August, 2012.
Sd/- Sd/-
(SAKTIJIT DEY) (CHANDRA POOJARI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, dated the 27th August, 2012
Copy forwarded to:
1. M/s. Nagarjuna Construction Co. Ltd., c/o. Sri Samuel Nagadesi, Chartered Accountant, 408, Sri Ramakrishna Towers, Besides Image Hospitals, Ameerpet, Hyderabad-500 073.
2. The Assistant Commissioner of Income-tax, Central Circle-3, Shakhar Bhavan, Opp. L.B. Stadium, Hyderabad-500 004.
3. The Deputy Commissioner of Income-tax, Central Circle-3, Shakhar Bhavan, Opp. L.B. Stadium, Hyderabad-500 004.
4. The Commissioner of Income-tax (Appeals)-I, Hyderabad.
5. The Commissioner of Income-tax (Central), Hyderabad.
6. The Departmental Representative, B-Bench, ITAT, Hyderabad.
tprao