T and T Infra Limited Vs ACIT (ITAT Pune)
Issue of deduction u/s 80IA(4) on profits derived from projects which were received on sub-contract basis was restored back to AO
Conclusion: AO without going through the terms and conditions of each of the project that had been undertaken by assessee during the year had come to the conclusion that assessee was a works contractor and not a developer. It was deemed proper to restore the issue of deduction u/s 80IA(4) on profits derived from projects which were received on sub-contract basis from independent private parties and not from government/ local authority to the file of AO with a direction to decide the issue afresh in light of the decision in the case of CIT vs. ABG Heavy Industries Ltd. (supra), CBDT Circular No.3/2008, dated 12.03.2008 and the terms and conditions of each of the project
Held: Assessee was a company engaged in contracting business such as Bridges & Aqueducts, concrete road, development projects, etc. AO noted that assessee had claimed deduction u/s 80IA(4) even on profits derived from projects which were received on sub-contract basis from independent private parties and not from government/ local authority. Hence, AO disallowed the claim of deduction u/s 80IA(4) to extent of Rs.40,91,541/-. So far as the balance amount was concerned, AO referred to Explanation to Sec 80IA(13) to state that the benefit of sec 80IA(4) should not be extended to a person who executed works contract. It was held that AO denied the claim of deduction u/s 80IA(4) on the ground that the assessee had claimed deduction u/s 80IA(4) in respect of 44 infrastructure facilities developed by it, out of which some infrastructure facilities did not fall within the definition of „infrastructure facility‟ such as reconstruction of bus station with sub work at Karad in Satara Division, Clinic for Primary Health sub center at Gojubavi, Tal – Baramati, Pune and retaining wall from Khadakwasla Dam to NadedPhata. Similarly, in some cases assessee had undertaken the projects which were received as sub-contract basis from independent private parties.AO without going through the terms and conditions of each of the project that had been undertaken by assessee during the year had come to the conclusion that assessee was a works contractor and not a developer. It was deemed proper to restore the issue to the file of AO with a direction to decide the issue afresh in light of the decision in the case of CIT vs. ABG Heavy Industries Ltd. (supra), CBDT Circular No.3/2008, dated 12.03.2008 and the terms and conditions of each of the project that had been undertaken by assessee to ascertain as to whether the assessee was a works contractor or a developer.
