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12.4. The core dispute lies in the interpretation of whether the assessee's role constitutes infrastructure development or merely a works contract. The Revenue relies on the contractual nature of certain agreements to classify the assessee as ineligible, while the assessee counters that its activities qualify under the broader definition of development for infrastructure projects.

13. During the course of hearing before us, the Departmental Representative (DR) reiterated that the assessee is a contractor and not a developer and section 80-IA(4) of the Act was intended to benefit only developers who assume full responsibility, risk, and reward of infrastructure development. The DR stated that the work executed by the assessee is not a Build-Operate-Transfer (BOT) project and it was purely execution of contract against the running bills raised by the assessee. The DR further stated that the assessee company is not planning the project but is carrying out part of activities and raising the detailed RA bills to the developer and getting the payment for the same on supervision and certification by the developer. The DR relied on the order of the AO and pointed out following points from the order of AO -

• The AO referenced the Finance Minister's clarification in the Finance Bill, 2007, which stated that the tax benefit was intended to encourage private sector investment in infrastructure development, not to provide deductions to contractors merely executing construction.

• The AO cited M/s. B.T. Patil & Sons Belgaum Construction Private Limited vs. ACIT, (ITA No.1408 & 1409/PN/2003) where the Tribunal clarified that the benefit under section 80-IA(4) applies to those developing the entire infrastructure project, not merely executing a part of it.

JMC Projects (India) Ltd. vs. DCIT-ACIT (By assessee and Revenue) Asst. Years : 2007-08 to 2015-16

16. We have perused the order of CIT(A) in detail. The CIT(A)'s order provides an in-depth examination of the eligibility criteria for deductions under Section 80IA(4) of the Act, specifically analyzing whether the assessee qualifies as a "developer" rather than merely a "contractor." The CIT(A) applied several interpretative principles, statutory provisions, and relevant judicial precedents to arrive at its decision. The CIT(A) thoroughly examined the definitions of "developer" and "contractor" and clarified that merely executing a construction contract does not automatically disqualify an entity from claiming deductions under Section 80IA(4) of the Act. The order emphasized that the legislative intent behind Section 80IA of the Act was to incentivize infrastructure development, and, thus, the term "developer" should be interpreted broadly. This includes entities undertaking significant public infrastructure projects, such as the assessee's work on roads and drainage systems. The CIT(A) held that the assessee's active involvement in infrastructure projects aligned with the statutory objective of creating new facilities benefiting the public, confirming its status as a developer. The CIT(A) highlighted that the assessee bore significant financial and operational risks, including providing performance guarantees, facing potential liquidated damages for delays, and being liable for retention money. These elements evidenced the assessee's entrepreneurial risk, a hallmark of developer activities under Section 80IA. The CIT(A) referenced the legislative history and amendments to Section 80IA of the Act, particularly the Finance Act of 2000, which progressively liberalized the section to encourage private sector participation in infrastructure. Notably, this amendment clarified that "developing," "operating and maintaining," or any combination of these functions qualifies for deductions. The CIT(A) found that this liberalization intended to include entities like the assessee, JMC Projects (India) Ltd. vs. DCIT-ACIT (By assessee and Revenue) Asst. Years : 2007-08 to 2015-16 whose activities contribute directly to public infrastructure creation. Emphasizing the entrepreneurial and operational risks borne by the assessee, the CIT(A) concluded that the assessee's responsibilities aligned more closely with those of a developer rather than a contractor. The assessee's involvement in project outcomes, liability for delays, and management of quality control processes indicated that it functioned as an independent developer under Section 80IA of the Act. Additionally, the CIT(A) cited M/s. Tarmat Bel (JV) vs. ITO (Rajkot Bench) and Om Metals Infra Projects Ltd. vs. CIT (Jaipur Bench), which held that contractors managing substantial project responsibilities qualify as developers eligible for Section 80IA of the Act deductions. These judicial precedents reinforced the CIT(A)'s position, supporting the assessee's developer status.

16.8. Furthermore, in line with the Hon'ble Gujarat High Court's decision in the case of Montecarlo Ltd. v. Principal CIT, we note that Section 80IA(4) of the Act should be interpreted liberally to support the infrastructure development mandate. Montecarlo Ltd. affirmed that an entity operating under a government contract does not lose developer status if it assumes the independent roles and responsibilities associated with developing infrastructure. The assessee's case here mirrors Montecarlo Ltd., where the Hon'ble Gujarat High Court upheld deductions for infrastructure developers who mobilized resources, bore risks, and undertook comprehensive JMC Projects (India) Ltd. vs. DCIT-ACIT (By assessee and Revenue) Asst. Years : 2007-08 to 2015-16 development duties. Given the binding nature of this jurisdictional precedent, we respectfully follow Montecarlo Ltd., concurring with the CIT(A) that the assessee qualifies as a developer entitled to deductions under Section 80IA(4) of the Act.