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claim made by the assessee was disallowed in the original assessment proceedings. Further, the Assessing Officer also made couple of other disallowances. Against the assessment order so passed, the assessee preferred appeal before the first appellate authority.

6. Before learned Commissioner (Appeals), the assessee raised an additional ground challenging the validity of the assessment made under section 143(3) r/w section 153A of the Act. It was submitted by the assessee that in the absence of any incriminating material found against the assessee as a result of search and seizure operation, no addition/disallowance which is subject matter of the original assessment proceeding cannot be made in the search assessment. Of course, the assessee also contested the disallowance of deduction under section 80IA of the Act on merits. After considering the submissions of the assessee, learned Commissioner (Appeals) held that in the course of search operation carried out on Gammon India Ltd., incriminating material and other documents were found which revealed that the assessee has not developed the infrastructure facility (BOT Project) for which it has claimed deduction under section 80IA of the Act. Thus, he observed, due to availability of such incriminating material, the Assessing Officer was competent to initiate proceeding under section 153A of the Act. Further, he observed, the EPC contract clearly reveals that the assessee after being awarded the BOT Project Rajahmundry Expressway Ltd.

Act for the aforesaid BOT Project. He submitted, in consideration for developing, operating and maintaining the road NHAI has paid a fixed sum of annuity of ` 1,000 crore over the concession period of 17 and 1/2 years. He submitted, the NHAI after considering competitive bids received from various parties had ultimately accepted the bid offered by a consortium between Gammon India Ltd. and Punj Lloyd Ltd. He submitted, as per the terms of the work allotment letter of NHAI, there was a mandatory requirement that the successful bidder will have to incorporate a company as a special purpose vehicle (SPV) to implement the project. In this context, the leaned Sr. Counsel drew our attention to the letter of allotment dated 5th September 2001, issued by NHAI, a copy of which is at Page-120 of the paper book. He further submitted, NHAI had also put a condition that the SPV formed for the purpose of developing the project should not undertake any other business activity except the BOT project. He submitted, complying with the condition imposed by the NHAI in the letter of allotment the assessee company was incorporated to implement the BOT Project. He submitted, after entering into the concession agreement with NHAI, the assessee entered into EPC and O & M contracts with Gammon India Ltd. He submitted, the function, role and responsibility of each party under the concession agreement as well as EPC and O & M contracts is will defined. He submitted, while the assessee is to receive annuity of ` 1,000 crore from NHAI over the Rajahmundry Expressway Ltd.

11. The issue which needs examination is, what is the incriminating material found as a result of search conducted in case of the assessee, that could have enabled the Assessing Officer to again re-visit the issue of deduction claimed under section 80IA of the Act in the search Rajahmundry Expressway Ltd.

assessment. On a perusal of the assessment order passed under section 143(3) r/w section 153A of the Act, it is very much evident that the Assessing Officer has not referred to any incriminating material insofar as it relates to development of the BOT Project or assessee‟s claim of deduction under section 80ITA of the Act. In fact, while dealing with the specific issue relating to assessee‟s claim of deduction under section 80IA of the Act, the Assessing Officer has very clearly relied upon the reasoning on the basis of which similar disallowance was made in the original assessment orders passed under section 143(3) of the Act for the assessment years 2007-08 and 2008-09. In fact, adopting the very same reasoning in the earlier assessment orders, the Assessing Officer disallowed assessee‟s claim on the conclusion that the BOT road developed by the assessee not being a new infrastructure facility, the assessee is not eligible to claim deduction under section 80IA of the Act. There is neither reference to a single incriminating material found as a result of search with regard to assessee‟s claim of deduction under section 80IA of the Act nor there is even a whisper by the Assessing Officer that the assessee is a paper entity. Though, the Assessing Officer was aware of both the concession agreement as well as EPC and O & M contracts, still he never treated the assessee as a paper entity. Nowhere in the assessment order has the Assessing Officer alleged that the assessee has not carried out the development of the BOT Project. In fact, Rajahmundry Expressway Ltd.

Commissioner (Appeals) has tried to make out a case that the assessee is a mere paper company and after getting the work from NHAI has awarded the work to GIL on back-to-back basis without carrying out any work itself. However, facts on record reveal that it is the assessee with whom NHAI has entered into the concession agreement for developing, operating and maintaining the toll Road. A perusal of the concession agreement reveals that the entire responsibility, risk and reward arising out of the BOT Project were with the assessee. Though, assessee was entrusted the job of developing, operating and maintaining the project by the NHAI, however, the concession agreement also provides that the assessee can get the development work done through a contractor by entering into EPC contract. Further, the concession agreement also provided that the assessee can enter into a separate contract for operation and maintenance of the BOT Project. Thus, it is evident, the EPC and O & M contracts entered into by the assessee with GIL are as per the terms of the concession agreement and also with the approval of NHAI. It is also a fact on record that the assessee has financed the entire project by availing loan from financial institutions. Further, as per the concession agreement assessee at its own cost is required to insure the project during the period of implementation. The work of GIL is limited to carrying out the development as well as operation and maintenance of the infrastructure project as per the price fixed under Rajahmundry Expressway Ltd.