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5. The Commissioner of Income Tax (Appeals) observed that the assessee is not a works contractor and a developer as stipulated u/s.80IA(4) of the Act. The section 80-IA(4) applies to any enterprise, which carries on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any :- 3 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 infrastructure facilities, which fulfill all the above conditions. From the assessment year 2000-01, deduction is available if the assessee is carrying out the business of anyone 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, such an assessee will be paid for the cost incurred by it. If the infrastructural facility, after its development is transferred to the Government, the cost would be paid by the Government. Merely because the transferee had paid for the development of infrastructure facility carried out by the assessee, it cannot be said that the assessee did not develop the infrastructure facility. If the interpretation done by the Assessing Officer is accepted, no enterprise carrying on the business of only developing the infrastructure facility would be entitled to deduction u/s. 80 IA(4), which is not the intention of the Law. An enterprise who develop 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. 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 become to developer i.e. to a person who is carrying on the activity of only development infrastructure :- 4 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 facility. A developer would have income only if he is paid for the development of infrastructure facility, that he is having the riqht /authorization to operate the infrastructure facility and to collect toll there from, has no other sources of recoupment of his cost of development. After taking a contract from the Government, if the assessee develops infrastructure facilities, the assessee would be regarded as 'developer' and not as a 'works contractor'. The assessee firm has carried on entire construction/development of the infrastructure facilities and satisfy all the conditions of sections 80 IA(4)(i)(a) of the act. It is fact that the assessee has taken development of infrastructure facility agreement from the State Government/Local Authority. A contractor who develops the infrastructure facility becomes a developer to claim exemption u/s 80IA(4). The Bombay Bench of the Tribunal while deciding the case of Patel Engineering Limited Vs. DCIT 94 ITD 411 (Mumbai) held that a civil contractor, having executed a part of contracts of irrigation and water supply on "build and transfer'' basis and handed over them over to contractee Governments was eligible for deduction u/s.80IA(4). Similarly, Tribunal Chennai Bench has taken a similar view in ITA No.554/Mds/ 2010 in the case of East Cost Constructions & Industries Limited vs. DCIT vide order dated 13.09.2011. The deduction u/s 80 lA :- 5 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 (4) is available to an enterprise which develops or operates and maintains, or develops maintains and operates that infrastructure facility after 01.04.1995. A 'developer' is a specific kind of works contractor to be eligible for deduction u/s.80IA (4) who fulfills all the conditions viz., if the assessee develops the infrastructure facility if it operates the infrastructure facility and if it maintains the infrastructure facility, the deduction is available to an enterprise who develops or operates and also maintains, or develops, maintains and operates that infrastructure facility. The handing over of the infrastructure facility/project by the developer to the Government or Authority takes place after recoupment of the developer's cost whether it be 'BT' or 'BOT' or 'BOOT', because in 'BOT' and 'BOOT' this recoupment is by way of collection of toll therefrom whereas in 'BT' it is by way of periodical payment by the Government/Authority. The land involved in infrastructure facility/ project always belongs to the Government/Local Authority etc., whether it be the case of 'BOT' or 'BOOT' and it IS handed over by the Government/Authority to the developer for development of infrastructure facility/project. The same has been the position in the instant case as well. So deduction u/s 80 IA(4) is available to the assessee who has undertaken work of a mere developer.

7. On the other hand, the ld. Authorised Representative for assessee submitted that the main issue involved in the appeals before this Tribunal is allowability of deduction under section 80IA(4)(i) of the Act. This issue is common for all the assessment years under appeal. He dealt with the introduction and changes made by the legislature to Section 80IA(4) of the Act till date. The said section is meant for allowing deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development. The assessee claimed deduction as it is engaged in development of infrastructure and as it satisfied all the conditions mentioned therein. The provisions of Section 80IA(4)(i) as introduced by the by the Finance Act, 1999 and as amended from time to time are applicable to the assessee.

7.1 He submitted that from a reading of the section, it is clear that the deduction is allowable to:

(a) any company incorporated;

                                 :- 10 -:              I.T.A.Nos.620/Mds/13
                                                          and 360/Mds/2015

(b) which entered into agreement with Government; or any government body; and undertakes development of infrastructure facility.

The purpose for which the said section was amended with effect from the assessment year 2000-01, can be traced to a brochure issued by the Government of India, Ministry of Roads, Transport and High Ways in August, 2001. He has taken support from the aforesaid brochure. In the said brochure, the Government of India extracted some of the decisions taken by it to bring in the development of infrastructure facility in the country. He pointed out that the Government provided the benefits to the Indian entrepreneurs by providing contract packages to the private enterprises. While providing benefits, the government specifically specified certain grants only to BOT Schemes. For the other schemes all the other benefits are made available. The classification provided in the brochure clearly indicates that the schemes of packages are meant for all the enterprises whether engaged in the development of infrastructure or under BOT. Hence, it clearly indicates that the Government of India with a view to develop the infrastructure facility provided various incentives to the Indian concerns for development of such infrastructure facility. With a view to provide the exemptions to the entrepreneurs carrying on such activity, the legislature introduced the amendment to Section 80IA(4) in the :- 11 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 Finance Bill 1999 to be effective for and from the assessment years 2000-01 and onwards to fulfil the objective of the Prime Minister. The provisions of Sec. 80IA(4) are made applicable to "any enterprise carrying on the business of (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operating or development, maintenance and operating any infrastructure facility.........". Because of the amendment, the enterprises which are engaged in any of the three activities became eligible for deduction compared to the earlier provision, which was made applicable only to such enterprises engaged in all the three activities cumulatively. The provisions of sub section (4A) which were earlier applicable to the entrepreneurs engaged in developing, maintaining and operating was deleted with effect from 01-04-2000, but is incorporated in section 80IA(4) of the Act. It is clear that the enterprises which were developing, operating and maintaining and developing, operating and maintaining were only eligible for such deduction up to the assessment year 1999-2000 by virtue of the provisions of Section 80IA(4A). With the introduction of the new Section 80IA(4) amending the sub section (4) of Section 80IA and deleting the sub section (4A), the legislature provided deduction for any enterprise carrying on the business either developing or operating and maintaining or development, operating :- 12 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 and maintaining instead allowing deduction only to the enterprises engaged in activity covering all the three activities together. 7.2 According to ld. Authorised Representative for assessee the provision extended to an enterprise carrying on any one of the three activities. It makes the matters more clear that the sub section (4) is amended again by the Finance Act, 2001 with effect from 01-04- 2002.The legislature specifically added the conjunction 'OR' between the words (developing), (operating and maintaining) (developing, operating and maintaining). It makes it clear that the provision would apply to any enterprise carrying on the business of developing or carrying on the business of operating and maintaining or carrying on the business of development, operating and maintaining the infrastructure facility. Therefore, there is no requirement that all the three activities should have been carried on by a single enterprise so as to enable it to claim deduction under section 80IA(4) of the Act. This view is also supported by the decision of the Bombay High Court in the case of CIT v. ABG Heavy Industries Ltd. [2010] 322 ITR 323/ 189 taxman 54 . It mentioned clearly that the three conditions development, operation and maintenance were not intended to be cumulative in nature. Therefore, any assessee who has undertaken any one of the activity is eligible for deduction under section 80IA(4) of :- 13 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 the Act. The Mumbai Bench of the ITAT in the case of Asstt. CIT v. Bharat Udyog Ltd. [2009] 118 ITD 336/[2008] 24 SOT 412(Mum.) also held that after the amendment of Section 80IA(4) it is applicable to enterprises who are engaged in developing infrastructural facility. Earlier, the Mumbai Bench in the case of Patel Engg. Ltd., v. Dy. CIT [2005] 94 ITD 411 also observed that the civil contractors who are developing the infrastructure facility is eligible for deduction under section 80IA(4) of the Act. It is mentioned that the statutory provisions as contained in 80IA(4) provides for development of infrastructure facility. Therefore, it is clear that to be eligible for deduction under section 80IA(4), an enterprise need not necessarily be engaged in all the three activities of developing, maintaining and operating the infrastructure. It is enough if it is carrying on the business of either developing or maintaining and operating or developing, maintaining and operating the infrastructure facility.

7.3. It was submitted by counsel for assessee that, as per the agreement, the possession of the site is handed over to the assessee by the Government. The assessee takes possession and access to the property and thereafter it shall be the responsibility of the assessee to develop the said area into more useful infrastructure facility. In the :- 14 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 process, every act required (whether mentioned in the agreement or not) in converting the area into more useful one shall be that of the assessee. The assessee has to undertake the responsibility of maintenance of the existing traffic and there should not be inconvenience to the regular traffic. The developed area after completion of the development of infrastructure is handed over to the Government. After handing over, the assessee shall maintain the infrastructure for a period of 48 months and any defects are to be rectified and it is clear that the assessee is converting the area entrusted to it into more useful and more profitable area and handing over the developed one to the Government. Therefore, the activity of the assessee is "to develop" an existing two lane road into four lane road thereby making the road more useful and profitable. The ld. Authorised Representative for assessee further submitted that as per the explanation introduced by the Finance Act, 2007, any assessee who entered into a contract with the enterprise mentioned in Sub- Section (4) would not be eligible for deduction. It clearly indicates that any sub-contractor who undertakes a part of the work from the undertaking which was allotted the work would not be eligible for such deduction. The said explanation has no application to the assessee. The assessee did not claim such deduction or any income pertaining to :- 15 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 a sub contract work undertaken from the enterprises referred to in Section 80IA(4). Therefore, the explanation introduced by the Finance Act, 2007 shall not affect the claim made by the assessee. The explanation introduced by the Finance Act, 2009 added that those enterprises undertaking simple works contracts by entering into agreements with the enterprises or with the government or government organizations. As per this explanation, any enterprises which enter into a mere works contract either with any other enterprise or Government or Government corporation shall not be eligible for the deduction. It is made clear that any enterprise, which entered into development of infrastructure, would be eligible for deduction and not those enterprises, which enter into contract for executing works contracts. The assessee herein entered into agreement for development of infrastructure facility and not for a mere works contract. It is submitted that this explanation has to be read in the context of the application of the main provisions of Section 80IA(4) of the Act. From a reading of Section 80IA(4)(i) of the Act, it is clear that the deduction is available for any company which enters into agreement with any government or government body. It is clear that the deduction is available not for any person but for those companies entering into agreement with the government or other Government :- 16 -: I.T.A.Nos.620/Mds/13 and 360/Mds/2015 bodies/corporations. It is also made clear that the deduction is available for the corporate bodies entering into agreement with the government organizations. Therefore, the main provision makes it clear that the deduction is available to companies entering into agreement with government bodies or Government. Therefore, it is not correct to read the explanation to mean that the government body is eligible for deduction under section 80IA of the Act and the company entering into agreement with such government body is not eligible for deduction.