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"21. While dealing with this submission, we note that neither in the memo of appeal nor in the submissions before us has any effort been made to suggest on the part of the revenue that the circulars of the Board are not binding on the revenue. Nor for that matter was it the submission of the revenue that the circulars issued by the Board from time to time were in violation of or contrary to legal provisions. Plainly, right from 1996 CBDT was seized with the question, as to whether infrastructure facilities developed under a BOLT project would qualify for exemption under section 80-IA of the Act. The first circular in that regard that was issued on 23-1-1996 specifically dealt with whether section 80-IA(4A) of the Act would be applicable to a BOLT Scheme involving an infrastructure facility for the Indian Railways. The circular clarified that an infrastructure facility set up on a BOLT basis for Railways would qualify for a deduction. That was followed by the two circulars of the Board dated 23-6-2000 and 16-12-2005. The first of those circulars recognizes that structures for storage, loading and unloading etc., at a port built under a BOT and BOLT Scheme would qualify for a deduction. Now, there is no question of an enterprise operating a facility in a BOLT Scheme A.Y. 2005-06 because such a Scheme contemplates that the enterprise would build, own, lease and eventually transfer the facility to the Authority for whom the facility is constructed. The subsequent circular dated 16-12- 2005 once again clarified the position of CBDT that structures which have been built inter alia under a BOLT Scheme up to assessment year 2001-02 would qualify for a deduction under section 80-IA of the Act. In fact from assessment year 2002-03, the process was further liberalized, consistent with the basic purpose and object of granting the concession. In this background, particularly in the context of the objective sought to be achieved and in the absence of any challenge on the part of the revenue on the applicability of the binding circulars of CBDT, we are of the view that 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 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. Parliament when it amended the law was obviously aware of the administrative practice resulting in the circulars of CBDT. The fact that in such a Scheme, an enterprise would not operate the facility itself was not regarded as being a statutory bar to the entitlement to a deduction under section 80-IA of the Act. The Court cannot be unmindful in the present case of the underlying objects and reasons for a grant of deduction to an enterprise engaged in the development of an infrastructure facility. The provision was intended to give an incentive to investment for infrastructural growth in the country. In Bajaj Tempo v. CIT [1992] 196 ITR 1881 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 by the CBDT 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. A provision inserted by the Legislature to supply an obvious omission and to make a section workable has in certain circumstances been regarded as retrospective particularly when it was intended to remedy unintended consequences. Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677 2 A.Y. 2005-06 (SC) and CIT v. Alom Extrusions Ltd. [2009] 319 ITR 306 3 (SC). The Tribunal having only followed these provisions, we do not find any just reason to interfere in our appellate jurisdiction.

59. We have considered the rival contentions, as also the relevant material on record referred to by the parties. We may note that as per section 80-IA(4)(i)(b ), the infrastructure facility developed by the enterprise should be transferred to Government within the period stipulated in the agreement. It had been the contention of the learned CIT/Departmental Representative that since the land on which infrastructure facility has been developed always belonged to the Government and assessee has already been paid for construction work, there is no question of "transfer" of infrastructure facility by the assessee. However, we are unable to agree with this contention of the learned CIT/Departmental Representative. At the time of hearing before us it was pointed out by the learned counsel for assessee that land was handed over to the assessee for carrying out development work. In this reference, he referred to clause 12 of agreement with APSEB (i.e., p. 8 of assessee's paper book 2), and clause 42 of agreement with Government of Maharashtra (i.e., p. 32 of the assessee's paper book 2). He also stated that after completion of development of infrastructure facility, the same was transferred by handing over possession thereof. In support of this, he referred to p. 11 of assessee's paper book 1 for handing over of possession of infrastructure facility. We find that section 80-IA(4)(i)( b) requires A.Y. 2005-06 development of infrastructure facility and transfer thereof as per agreement and it cannot be disputed in view of the material on record that the assessee has transferred the infrastructure facility developed by it, by handing over possession thereof to the Government of Maharashtra/APSEB, as required by the agreement. The very handing over of the possession of the developed infrastructure facility/project is the transfer of infrastructure facility/project by assessee to the Government/authority. The handing over of infrastructure facility/project by developer to Government/local authority/statutory body takes place after recoupment of developer's costs whether it is 'BT' or 'BOT' or 'BOOT' and 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/local authority/statutory body. Since in 'BT' (the case of an assessee being a mere developer) the developer not being required/authorised to 'operate' has no option of recoupment of its costs by collection of tolls from infrastructure. The land involved in infrastructure facility/project always belongs to the Government/local authority/statutory body, whether it be the case of BOT or BOOT or BT, and it is handed over by the Government/local authority/statutory body to the developer for development of infrastructure facility/project. The same has been the position in the instant case as well. Undisputedly/undisputably, the deduction under section 80-IA is also available to an assessee, who undertakes merely "development" of infrastructure facility without "operating" aspect of the same. Accordingly, in a case of 'BT', that is, a case of a mere 'developer' the recoupment of his costs has to be by Government/local authority/statutory body whether it be by periodical payment or by lump sum payment, and whether the payment is made while development work is in progress or when the same has been completed. In that view of the matter, the question of comparing the rights, title, or interest of an assessee (a developer) in infrastructure in the case of 'BT' with those of a developer in the case of 'BOT' or 'BOOT' is, in our considered opinion, of no relevant bearing on the issue, inasmuch as a developer seems to have almost same rights, title or interest (except regarding mode of payment or collection of tolls) in infrastructure facility whether it be the case of 'BT' or that of 'BOT' or 'BOOT', in view of the discussions made by us above. Accordingly, in the instant case as the activity of these two projects of infrastructure facility undertaken by the present assessee was of the kind of "BT" (build and transfer) being merely of 'development' and did not involve 'operate' aspect in respect of the same, the A.Y. 2005-06 infrastructure facility developed by assessee had to be transferred and handed over to the Government of Maharashtra/APSEB on its completion only and without operating it, that is without resorting to the collection of toll therefrom for recoupment of its costs. Accordingly, in our opinion, the assessee has duly complied with this condition as well. We, therefore, hold that ground No. 2 of Revenue's cross objection has no merit and the same accordingly fails. ......................................................................................

68. We have considered the rival contentions as also the relevant material on record. We may note that the statutory provision as contained in section 80-IA provides for "development of infrastructure facility". It nowhere provides that entire infrastructure project is to be developed by one enterprise. It is revealed from record that both the projects were multi-purpose projects for water supply, irrigation and power generation. The assessee has developed such part of the project, as was for supply of water from river/lake to turbine. Therefore, the assessee has developed "infrastructure facility" for supply of water and for irrigation. Merely because development work done by assessee is a point to point milestone of a multi-purpose project, it would not debar the assessee from claiming deduction under section 80-IA(4), so long as the nature of development made by assessee falls within the ambit of "infrastructure facility" and since we have found it established above that development work carried out by assessee was for development of infrastructure facility, the assessee cannot justifiably be denied of the deduction under section 80-IA, merely because the assessee has not developed the entire project. We hold accordingly.

23. In this regard, we notice that I.T.A.T., Bangalore Bench in the case of ACIT vs. JSR Constructions (P) Ltd, ITA No.898/Bang/2009, order dated 29.03.2011 while examining allowability of deduction under section 80IA in case of sub- contractor held as under :-

"Having heard both the parties and having considered the rival contentions, we find that the deduction u/s 80IA is available in respect of profit and gains from the industrial undertaking or enterprises engaged in infrastructure development etc. The only reason for the disallowance by the AO is that the assessee has undertaken the sub- contract works and has also not undertaken the new contracts during the relevant asst. year. We find that the assessee has filed sufficient evidence before the CIT(A) to prove his case that it is party to the consortium, which was engaged in the business of civil construction and was also awarded the contract by the NHAI. It was also proved that the assessee has invested the entire capital for completion of the contract and so it was entitled to receive the entire contract receipts. In such a case, we are satisfied that the assessee has itself carried on the works contract and was not a sub-contractor carrying on the works contract. Further, as rightly held by the CIT(A) every year the assessee cannot be expected to enter into a new contract for the reason that the infrastructure project are by the very nature carried on over a period of time and cannot be completed within a year. The main aim of allowing the deduction u/s 80IA is for improving the A.Y. 2005-06 infrastructure facilities in the country. In view of the same, we are of the opinion that the CIT(A) has properly appreciated the evidence before allowing the claim of the assessee and there is no reason to interfere with the same."