Document Fragment View

Matching Fragments

23. Shristi Infrastructure Development Corporation Ltd. (2008) 28 CCH 0449 (Delhi Tribunal) I.T.A Nos. 129 & 150/Rjt/2015 A.Y. 2011-12 Page No 9 Backbone Enterprise Ltd. vs. DCIT & ACIT vs. Backbone Enterprise Ltd.

24. Rajkamal Builders Infrastructure P. Ltd. in ITA Nos. 118/ A/2009 and others dated 13-05-2022 (Ahmedabad Tribunal)

25. TRG Industries (P.) Ltd. (2013) 35 taxmann.com 253 (Amritsar Tribunal) The Ld. Departmental Representative submitted that Ld. CIT(A) has erred in facts and in law in allowing relief to the assessee since post amendment all works contracts have been excluded from within the scope of eligibility of deduction u/s 80-IA(4) of the Act. The assessee is a works contractor and hence not eligible to claim deduction u/s 80-IA(4) of the Act. We have heard the rival contentions and perused the material on record. Therefore, in order to decide the Department's appeal, we shall be discussing the observations made by Ld. CIT(Appeals) in respect of each of the projects and thereafter decide, whether in the applicable set of facts, the assessee is eligible for deduction under section 80-IA(4) of the Act.

5.1 However, before we analyse the order of Ld. CIT(Appeals) in respect of each individual projects, it would be useful to go through the relevant statutory provisions and law on the subject in light of various judicial precedents to have a better understanding of the precise scope of the deduction u/s 80-IA(4) . The relevant extracts of the section are reproduced below.

Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. 80-IA.

6) complete as directed 47100.00 M2 I.T.A Nos. 129 & 150/Rjt/2015 A.Y. 2011-12 Page No 34 Backbone Enterprise Ltd. vs. DCIT & ACIT vs. Backbone Enterprise Ltd.

8.4 From the reading of the contention of the Ld. CIT(Appeals) order, the work included up-gradation of Industrial infrastructure works of Roads, SWD and Street Lights etc. From the terms of the contract, primarily the work seems to involve restoration /upgradation / strengthening /maintenance of "existing" infrastructure. The scope of work, in our view does not involve "development" of an infrastructure facility, as envisaged within the meaning of section 80-IA (4) of the Act. The work primarily is to dismantle / upgrad /strengthen the existing projects, but no altogether development of infrastructural facility, in our view has taken place. Although, the assessee has undertaken responsibility of maintenance of the project after 60 months after completion of the project, however, looking into the totality of facts, we are of the considered view that the assessee is not eligible for deduction under section 80-IA (4) of the Act. The ITAT Bangalore in the case of GMR Tambaram Tindivanam Expressways Ltd v DCIT in I.T.A Nos.545 & 546/Bang/2018, held that a clear distinction can be made between widening an existing road by constructing additional lanes as part of the highway project vis-à-vis improving, maintaining and refurbishing an existing road. For a specific patch of road, as the taxpayer was only operating and maintaining an already existing four lane road by strengthening it, no new infrastructure facility came into existence. Laying a service road and laying a main line were two different activities and laying a service road could not be termed as a new infrastructure facility, to claim deduction under section 80-IA of the Act.

to the local pumping stations constructed by GIDC, provision was also to be made in developing signs for the traffic to move safely at night including necessary safety boards, safety road markings and glow sign road dividers. It was duty of the contractor to procure required clearances for commencing and completing the works for infrastructure development for SEZ at Dahej, surveying and setting out of works and other pre-construction stage activities as required by RIPL/GIDC etc. The cost of the contract was of Rs.59,55,06,849/-. The project was to be completed within the stipulated period with free maintenance as per the terms of the agreement.