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1 - 10 of 30 (0.30 seconds)Section 80IA in The Income Tax Act, 1961 [Entire Act]
Section 154 in The Income Tax Act, 1961 [Entire Act]
The Code of Civil Procedure, 1908
Commissioner Of Income Tax (It)4 vs M/S. Reliance Telecom Ltd. on 3 December, 2021
However, the hon'ble
Supreme Court in the case of Reliance Telecom Ltd (supra) at Paras 3.1 and 3.2 has
categorically held that the Tribunal has power to rectify any mistake apparent from
the record only and further it held that the powers under Section 254(2) of the Act
are akin to Order XLVII Rule 1 CP and the Tribunal is not required to re-visit its
earlier order and to go into detail on merits and the powers under Section 254(2) of
the Act are only to rectify/correct any mistake apparent from the record.
The Additional Commissioner Of Income ... vs Maharani Raj Laxmi Devi on 11 February, 1997
30. We find that the decision relied on by the learned counsel for the assessee in the case
of CIT vs. Laxmi civil Engineering works [supra] squarely applicable to the issue under
dispute which is in favour of the assessee wherein it was held that mere development of a
infrastructure facility is an eligible activity for claiming deduction under section 80IA of the
Act after considering the Judgement of the Mumbai High Court in the case of ABG Heavy
Engineering [supra]. The case of ABG is not the pure developer whereas, in the present
case, the assessee is the pure developer. We also find that Section 80IA of the Act,
intended to cover the entities carrying out developing, operating and maintaining the
infrastructure facility keeping in mind the present business models and intend to grant the
incentives to such entities. The CBDT, on several occasions, clarified that pure developer
should also be eligible to claim deduction under section 80IA of the Act, which ultimately
culminated into Amendment under section 80IA of the Act, in the Finance Act 2001, to
give effect to the aforesaid circulars issued by the CBDT. We also find that, to avoid misuse
of the aforesaid amendment, an Explanation was inserted in Section 80IA of the Act, in
the Finance Act-2007 and 2009, to clarify that mere works contract would not be eligible
for deductions under section 80IA of the Act. But, certainly, the Explanation cannot be
read to do away with the eligibility of the developer; otherwise, the parliament would
have simply reversed the Amendment made in the Finance Act, 2001. Thus, the aforesaid
Explanation was inserted, certainly, to deny the tax holiday to the entities who does only
mere works contact or sub- contract as distinct from the developer. This is clear from the
express intension of the parliament while introducing the Explanation. The explanatory
memorandum to Finance Act 2007 states that the purpose of the tax benefit has all along
been to encourage investment in development of infrastructure sector and not for the
persons who merely execute the civil construction work. It categorically states that the
deduction under section 80IA of the Act is available to developers who undertakes
entrepreneurial and investment risk and not for the contractors, who undertakes only
business risk. Without any doubt, the learned counsel for the assessee clearly
demonstrated before us that the assessee at present has undertaken huge risks in terms
of deployment of technical personnel, plant and machinery, technical know-how, expertise
and financial resources. Further, the order of Tribunal in the case of B.T.Patil cited supra is
prior to amendment to sec 80IA(4), after the amendment the section 80IA(4) read as (i)
developing or (ii) operating and maintaining or (iii) developing, operating and maintaining
any infrastructure facility, prior to amendment the "or" between three activities was not
there, after the amendment "or" has been inserted w.e.f. 1-4-2002 by Finance Act 2001.
Therefore, in our considered view, the assessee should not be denied the deduction
under section 80IA of the Act if the contracts involves design, development, operating &
maintenance, financial involvement, and defect correction and liability period, then such
contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act.
In our opinion the contracts which contain above features to be segregated on this
deduction u/s. 80-IA has to be granted and the other agreements which are pure works
26
MA Nos.58 & 59/Hyd/2022
GPVR Engineers Limited
contracts hit by the explanation section 80IA(13), those work are not entitle for deduction
u/s 80IA of the Act. The profit from the contracts which involves design, development,
operating & maintenance, financial involvement, and defect correction and liability period
is to be computed by assessing officer on pro-rata basis of turnover. The assessing officer
is directed to examine the records accordingly and grant deduction on eligible turnover as
directed above. It is needless to say that similar view has been taken by the Chennai Bench
of the Tribunal and deduction u/s. 80IA was granted in the case of M/s. Chettinad Lignite
Transport Services (P) Ltd., in ITA No. 2287/Mds/06 order dated 27th July, 2007 for the
assessment year 2004-05. Later in ITA No. 1179/Mds/08 vide order dated 26th February,
2010 the Tribunal has taken the same view by inter-alia holding as follows: