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(c) of sub-section (4) of section 80-IA was not applicable.

Further, from the assessment year 2000-01, deduction under section 80-IA(4J is available if the assessee carries on the business of anyone of the abovementioned three types of activities. When an assessee is only developing an Infrastructure facility/project and is not maintaining nor operating it, obviously such an 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 I . T. A . N o. 1 1 5 9 / KO L . / 2 0 1 3 Assessment year: 2009-2010 & I . T. A . N o s . 9 9 1 to 9 9 5 / KO L / 2 0 1 6 A s s e s s m e n t Ye a r : 2 0 0 4 - 0 5 to 2 0 0 8 - 0 9 income only if he is paid for development of infra structural 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 in as much as mere 'development' as such and unassociated/unaccompanied 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 should 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 project 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 tile 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 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) (underline supplemented).

(d) The execution of a contract for development of Infrastructure facilities is also a "contract" and the contract is also a part of business. The Assessing Officer should have appreciated that what the appellant was carrying on was not a mere execution of a works contract but the appellant's works comprised of several parts such as designing, 'conceptualising, development, constructing, commissioning and thereafter releasing the infrastructure facilities for the public use.

(e) The Agreements entered into between the appellant and the prescribed government authorities, viz., HRBC and DMRC, had been for development of Infrastructure facilities such a~ Flyover and Metro Railway. The appellant had not merely been required to execute any work contract as per the specifications given by HRBC and/or DMRC. On the basis of the desire of the above-mentioned local authorities, the appellant had been required to give its own ideas supported by highly technical diagrams/plans as regards the viability of the development of a flyover and/or metro railway at the places owned by the Government. It was only after several sets of discussions held between the appellant and the government authorities in the presence of technical personnel that the decisions had been finally taken for the development of Flyovers at Kolkata and Metro Railway at Delhi. The entire process to be adopted for carrying out the developmental works, had been planned by the appellant and after thorough examination thereof and necessary sanctioning by the government authorities. the appellant could proceed with the construction of Flyovers as well as the Metro Railway.

(h) The appellant, in respect of all the above-referred developmental projects, had to guarantee the designs made by it and in the case of Metro Railway project such guarantee would remain for 120 years for Civil Engineering Structures and for 50 years for above ground building structures. So, a substantial Risk factor had always been present in these developmental works. However, this issue has been totally overlooked by the Assessing Officer while preparing his Remand Report.

(i) The appellant further submits that it was only from the Assessment Year 2002-03 that the Government had amended the provisions of section 80-IA(4)(i) to provide that a business of developing any infrastructure facility would also qualify for deduction u/s 80-1A. The earlier requirement of maintenance/operation along with development, for being entitled I . T. A . N o. 1 1 5 9 / KO L . / 2 0 1 3 Assessment year: 2009-2010 & I . T. A . N o s . 9 9 1 to 9 9 5 / KO L / 2 0 1 6 A s s e s s m e n t Ye a r : 2 0 0 4 - 0 5 to 2 0 0 8 - 0 9 to deduction, was changed. From this itself it becomes clear that what the government intended was to allow deduction to that person who just develops the Infrastructure facility. It has to be appreciated that the land on which the Infrastructure facilities, viz., Flyover(Bridge) and/or Metro Railway(Railway System) would be constructed, would always belong to the government and, therefore, if the development work would be carried out by the government itself there would be no meaning of allowing any deduction u/s 80-IA(1)/(4)(i). It is only in a case where a person other than the government undertakes the Developmental work that the said person becomes entitled for deduction. Since the person engaged by the government or any of its authorities would earn its charges for development works and not through operation/maintenance of the concerned Infrastructure facility, the deduction u/s 80-IA would be in relation to the said charges for development which would mainly comprise of charges for construction of the facilities. In the appellant's case the Government authorities after all the procedural formalities, had decided to engage the appellant for development of the Infrastructure facilities, viz., Flyovers and Metro Railway and the business of development of Infrastructure facilities as carried on by the appellant would accordingly be entitled for deduction u/s 80- 1A.

(p) As regards the infrastructure Development Projects relating to Park Street Flyover and Gariahat Flyover, the authorities of HRBC issued certificates certifying that design/development and detailed working drawings of the Flyovers had been entrusted to the appellant and the appellant duly carried out the same. Copies of the relevant Certificates were submitted to the Assessing Officer along with the Written Submissions, but he did not make any reference thereto. The appellant submits that these Certificates clearly indicate that the appellant had not been appointed just for execution of any Works Contract towards the development of the Infrastructure facilities but it had been entrusted with the entire work of the development of the Infrastructure facilities towards Flyovers at Park Street and Gariahat.