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4.4 The ld. CIT(A) granted relief to the assessee vide appellate order dated 11.07.2011, by holding as under:-
"2.3.. I have carefully considered the facts on record, findings of the A.O as well as submissions of the appellant and various legal citation relied upon.
The appellant is a Limited Company engaged in the business of Construction and development of project. For the year under consideration, the appellant filed its return of income on 15/10/2007 declaring total income at Rs.6,90,35,110/-. For the year the Appellant also claimed deduction of Rs.2,95,49,667/- u/s 801A of the Act. During the course of assessment proceedings, the A.O asked the appellant to justify the claim of deduction u/s 801A(4) of the Act. In this connection, the Appellant submitted and explained to the AO that the Appellant Company is engaged in development of infrastructural facilities and has complied with the conditions laid down under the provisions of Section 80IA(4) of the Act and therefore eligible for deduction u/s 80iA(4) of the Act. It was also submitted and explained to the Id. AO that the Appellant is working in the capacity of developer and not merely the construction contractor. However, the AO contended that the Appellant Company is not developer but merely a construction contractor and accordingly the AO withdrew the claim made u/s 80iA(4) of the Act and made addition of Rs.2,95,49,667/- to the total income of the Appellant..
2.3.6 Respectfully following the recent decision of the ITAT Rajkot bench quoted supra which is squarely applies to the facts of the appellant's case, the A.O is directed to allow deduction u/s. 801A(4) of the I.T Act in respect of the 10( ten) projects as reproduced in para 2.2.4 of this appellate order."

5. Aggrieved by the appellate order passed by ld. CIT(A), the Revenue has filed an appeal before the Tribunal , and the assessee has filed CO, for assessment year 2007-08. The ld. Sr. DR, Shri Chetram Meena submitted that the assessee is merely a Contractor and is not a developer. The assessee is undertaking work contract as construction contractor. The ld. Sr. DR, Shri Chetram Meena drew our attention to the assessment order passed by the AO and to the Explanation inserted after sub- section (13) of Section 80IA . It was submitted by ld. Sr. DR, Shri Chetram Meena that there was an explanation inserted after sub-section (13) of Section 80IA, and keeping in view the aforesaid explanation the assessee is a work contractor as the assessee is executing a work contract, and hence the assessee is not eligible for deduction u/s 80IA. The ld. Sr. DR, Shri Chetram Meena reiterated that the assessee is not a developer and is a work contractor, and hence the AO has rightly denied deduction u/s 80IA to the assessee. The ld. Sr. DR, Shri Chetram Meena relied upon the assessment order passed by the AO.

work contract, while the assessee is contending that it is not Contractor but developer.The word 'Developer' , 'Contractor' , 'work contract' are not defined in the 1961 Act. The word contractor refers to a person who executes contract/work order for others without taking any future risks and responsibilities of the work undertaken except normal business risk of completing the work contract successfully as directed by Contractee, while developer undertakes the project to develop and construct at its own responsibility and takes all the risks and responsibilities aassociated with the project awarded to it . In this execution of work order, the Contractor is a given a work order by Contractee along with the designs and specification and his job is to be simply execute the wok order. The role and responsibility of the Contractor ends with the finishing of work order to the satisfaction of the Contractee. The Contractee provides all the designs and other instructions to the Contractor for executing the Contract. The financial investments are done by Contractee as well major manpower , machines and material are provided by the Contractee. Say for example contact for painting of walls. Thus, Contractor act as an agent for the Contractee . While developer is broader than contractor, wherein developer is given contract for developing new infrastructure facility , wherein the Developer will act as principal. The Developer will actively participate in designing the new infrastructure facility , deploying its own financial stake/investment in development , deploying of its own men , material and machine to develop the facility/project. The developer will take charge of the existing premises/land and then complete the development as per the terms of the Contract. The developer will use its expertise and experience to develop infrastructure facility including deploying of managerial personnel's. The role and responsibility of the person who are awarded work of development does not end with completion of the work and he continues to be responsible even after completion of the work. The developer will be subjected to penal provisions for breach of any provisions of the AYs:2007-08 CO. No.210/Ahd/2011 & Khurana Engineering Ltd.

terms of the contract. The developer shall be liable to recompense for any loss caused to the person awarding the contract for failure to adhere to various laws such as Environmental laws, Labour Laws etc. Thus, as could be seen that the line demarcating Contractor and Developer is well defined. The person who is executing a work contract in the capacity of Contractor is not eligible for deduction u/s 80IA(4) , while the Company executing the Contract as developer is eligible for deduction u/s 80IA(4) provided all other conditions as are stipulated u/s 80IA(4) are fulfilled. To identify, whether a work executed by the Contractee is in the capacity of 'Contractor' or the work undertaken is for the development of the infrastructure facility in the capacity of 'developer' requires deeper analysis of each and every work executed by the assessee wherein claim of deduction u/s 80IA(4) is made viz. the tender document issued by Government/Statutory Authority, Letter Awarding the work to successful contractor/developer, Agreement entered into by the developer/contractor with the Government/Statutory authority , the manner in which execution of the work took place, analysis of the financial statements to identify deployment of financial resources by the Contractor/developer, deployment of men , machine and material by Developer/Contractor in executing the work awarded, PERT chart prepared, the role and responsibility of the Contractor/Developer prior to execution of work, during the execution of work and post execution of work. The provisions for claim of deduction /exemption are to be strictly construed and any ambiguity is to be decided in favour of Revenue. Reference is drawn to the judgment and order of Constitutional Bench of Hon'ble Supreme Court in the case of Commissioner of Customs(Imports) v. Dilip Kumar & Company, reported in (2018) 95 taxmann.com 327(SC). The ld. Sr. Advocate has heavily relied on the judgment and order of Hon'ble Gujarat High Court in the case of Montecarlo Construction Limited (supra) . In this judgment and order , the Hon'ble Gujarat High Court has dismissed the appeal filed by Revenue on the AYs:2007-08 CO. No.210/Ahd/2011 & Khurana Engineering Ltd.