Gulermak TPL Joint Venture Vs ITAT (Bombay High Court)
The Bombay High Court heard two writ petitions challenging orders of the Income Tax Appellate Tribunal (ITAT) dated 30 July 2025, which had dismissed the petitioner’s Miscellaneous Applications filed under Section 254(2) of the Income-tax Act. The petitioner is an unincorporated joint venture formed to execute a contract with the Lucknow Metro Rail Corporation Limited (LMRCL), a nodal agency responsible for the metro rail system in Lucknow. Under a 2016 agreement with LMRCL, the petitioner undertook the design and construction of an underground tunnel and three metro stations, bearing obligations relating to design, procurement, testing, permissions, approvals, warranties, defect liability, insurance, performance guarantees, and financial risks.
For AY 2017-18, the petitioner claimed a deduction under Section 80-IA on the basis that it was a developer of an infrastructure facility. The Assessing Officer rejected the claim, holding that the petitioner was only a contractor and that the agreement was not with the Central or State Government or other eligible authorities under Section 80-IA(4)(i)(b). The Commissioner (Appeals) affirmed this finding. The petitioner approached the Tribunal, submitting detailed notes highlighting contractual clauses, legal tests laid down in judicial precedents, and amendments clarifying entitlement to deduction where the business involves only development. The petitioner also cited several decisions holding that contracts with special purpose vehicles (SPVs) or nodal agencies wholly owned by the government satisfy the statutory requirement of agreement with eligible authorities.
