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4. Aggrieved, by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee has filed elaborated written submissions in respect of additions made by the AO towards disallowance of deduction claimed u/s 80IA(4) along with various supporting evidences including copies of agreement entered into with authorities for development of infrastructure facility which has been reproduced by the learned CIT(A) at Paragraph 6, page no. 4 to 54 of his order. The assessee also relied upon the decision of ITAT, Mumbai Bench in assessee's own case for the AY 2005-06 in ITA No. 6605/Mum/2013 dated 18-11-2015 and also the decision of Hon'ble Bombay High Court in the case of CIT Vs ABG Heavy Industries Ltd. (2010) 322 ITR 323. The sum and substance of arguments of the assessee before the CIT(A) is that the assessee is developing infrastructure projects for various government authorities for development of dams and hydro-electric power projects which are in the nature of infrastructure facilities as defined u/s 80IA and qualifies for deduction u/s 80IA(4) of the Act. The assessee has filed details of each and every project developed by the assessee and also explained the nature of infrastructure facility developed, scope of work, risk assumed, responsibilities undertaken, indemnities given, financial and technical resources committed, performance guarantees given, interim payments receipt, liability towards liquidity damages and the commitments performed. The assessee also submits details of projects developed like Ghatghar Dam for Govt. of Maharashtra for development of Upper Dam for Ghatghar storage scheme, Kameng I,II,III for NEEPCO for construction of Tenga Dam river diversion and construction of tunnels for water supply to the power house to argue that all these projects already considered by the ITAT and held that the assessee is a developer of infrastructure facility and eligible for deduction u/s 80IA(4) of the Act. In so far as, new projects of Tuirial lot II and lot III developed for NEEPCO ITA No . 49 2 2 & 5 26 9/ Mu m / 20 1 7 by constructing dam and spillway and other allied works for water supply and hydro- electric projects or akin to projects already developed by the assessee and considered by the ITAT. Therefore, there is no reason for the AO to consider that the assessee is only a works contractor executing works for development of infrastructure facility.

i. B.T. Patil & Sons Belgaum Constructions (P.) Ltd V. ACIT CC (2013) 34 taxmann.com 97 (Pune Trib.) ii. Patel KNR JV. V. ACIT and KNR Patel JV v. ACIT in ITA No. 7155 and 7156/Mum/2008 (ITAT Mum) iii. CIT v. ABG Heavy Industries Limited (2010) 322 ITR 323 (Bom).

8. On the other hand, the learned DR submitted that the CIT(A) brought out clear facts to the affect that the assessee merely a works contractor executing works for development of infrastructure facility which ITA No . 49 2 2 & 5 26 9/ Mu m / 20 1 7 is evident from the fact that the assessee is participating in tenders floated by various Government / Government Agencies for development of infrastructure facility and after successful tender process entered into an agreement within the principles which clearly establishes the fact that it is only a works contractor. The DR further submitted that if you go through the terms and conditions of agreement with the principles, the agreements entered into by the assessee clearly specify the principles as owner of the project and the assessee as contractor. The DR further submitted that the assessee has bid for particular projects on the basis of terms and conditions given by the principles to carry out a particular works contract as per the specifications provided and other terms and conditions associated with the project. The assessees, from time to time submit running bills for portion of works done and the payments were made by the Government. The assessee has executed only a part of big project and not total project. The moment construction work is over, the assessee hand over the same to the principal party. Though the assessee claims that its works on turn-key basis and is responsible for planning and designing, scheduling and resourcing for the contract, deciding on machinery, equipments, personnel and services to be installed in the infrastructure facility, to conduct zoological and geotechnical investigation and other services, the facts remains that the above activities are only a part of the overall contract and the assessee is only executing works contract as per the specification provided by the principles. In doing so, the assessee as such is not taken any financial risk or any other risk nor does it have any ownership in the project. The assessee is not having any financial risk and it was paid periodically by the principles on submission of running bills. No property of any kind is passed on to the assessee. All these facts goes to prove an undisputed inference that the assessee is only a works contractor undertakes works for the developer who develops infrastructure projects, but not a ITA No . 49 2 2 & 5 26 9/ Mu m / 20 1 7 developer of infrastructure project. The learned DR referring to the explanation inserted by the Finance Act 2009 with retrospective effect from 01.04.2000, submitted that for the purpose of deduction under sub- section 1, any business referred to sub-section 4 which is in the nature of works contract awarded by any person and executed by the undertaking or the enterprise referred to in sub-section 1, then deduction provide u/s 80IA(4) is not allowable. The DR further argued that the Hon'ble Bombay High Court in the case of ABG Heavy Industries Ltd. (supra) have not considered the explanation inserted by the Finance Act 2009, therefore, the AO was correct in not following the Hon'ble Bombay High Court judgment and denial of deduction claimed u/s 80IA(4) of the Act.

ITA No . 49 2 2 & 5 26 9/ Mu m / 20 1 7

11. The provisos of section 80IA of the Act, provides for deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, if such undertakings or enterprises satisfied certain conditions specified therein. As per sub section (4), any enterprise carrying business of (i) developing, or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils certain conditions can claim deduction u/s 80IA of the Act, in respect of profits and gains from industrial undertaking. Therefore, for claiming deduction specified in sub- section (1), the assessee should be either developer or operating or maintaining or developing, operating and maintaining infrastructure facility. Therefore, one has to understand the nature and scope of works undertaken by the assessee within the ambit of sub-section (4) so as to decide whether the activities undertaken by the assessee is in the nature of development of infrastructure facility or a works contract in relation to development of an infrastructure facility. If we go through the explanation inserted by the Finance Act 2009 w.e.f. 1-04-2000 the provision of section 80IA of the Act, is not applicable to any business which is in the nature of works contract awarded by any person and executed by the undertaking or enterprises referred in sub-section (1). Therefore, to ascertain whether the assessee is eligible for deduction u/s 80IA(4) of the Act, one has to see the nature and scope of work of the assessee in the light of provision of sub-section (4) and explanation inserted by the Finance Act 2009 clarifying the applicability of sub-section (1) to undertakings or enterprises.

10. In view of the above discussion, we uphold the action of CIT(A) for allowing claim of deduction u/s.80IA(4) in respect of all the projects."

14. We further noticed that during the year under consideration, out of the total seven projects on which deduction claimed u/s 80IA of the Act, four projects, i.e. Ghatghar Dam, Kameng I, II and III are on-going projects which have been already considered by the ITAT in the light of provision of section 80IA(4) of the Act and held that the assessee is eligible for deduction u/s 80IA(4) of the Act. In respect of remaining of 3 projects, i.e. Tuirial lot II and III and Lohari Nagpala, we find that the scope of work, risk assumed, responsibilities undertaken, indemnities ITA No . 49 2 2 & 5 26 9/ Mu m / 20 1 7 given, financial and technical resources committed, performance guarantee, interim payments received, liabilities towards liquidity damages and the commitments performed are similar to the projects on which deduction has already been granted by the ITAT in other projects. Therefore, we are of the considered view that to be qualified for claiming deduction u/s 80IA of the Act, the assessee should be a developer of infrastructure facility whether on its own or on behalf of third party principles, but if such activity is in the nature of developing an infrastructure facility within the meaning of section 80IA, then the assessee is eligible for deduction towards profits and gains of undertakings which carried out development of infrastructure facility. In this case, all the projects developed by the assessee including on-going projects and new projects on which the development has been commenced during the year under consideration are all related to developing an infrastructure facility for water supply schemes and hydro- electric power generation, which are in the nature of infrastructure facilities as defined u/s 80IA(4) of the Act. The scope and nature of work and terms of contract clearly establishes an undisputed fact that the assessee is a developer of infrastructure facility which would entails the assessee deduction u/s 80IA(4) of the Act. Hence, we are of the considered view that the AO has erred in denying deduction claimed u/s 80IA(4) of the Income Tax, 1961. The learned CIT(A), though in principle accepted the fact that the nature of works undertaken by the assessee in respect of three new projects are similar to the nature of works undertaken by the assessee in respect of projects already considered by the ITAT, denied the deduction claimed u/s 80IA of the Act, by holding that the assessee is merely a works contractor executing works for development of infrastructure facility. Hence, we reverse the findings of the CIT(A) in respect of three new projects and direct the AO to allow deduction claimed u/s 80IA(4) of the Act, in respect of all seven projects.