For claiming deduction U/s. 80IA(4), twin conditions that is investment in eligible project and execution of the project by itself, are required to be satisfied

Briefly stated, the relevant material facts are like this. The assessee is engaged in the business of manufacture of Hume pipes and execution of civil projects. During the relevant previous year, the assessee had business income earned from execution of projects relevant to development of infrastructure facility such as water supply and sewerage projects – composite, and part of composite, projects. The claim of the assessee was that composite water supply projects mean undertaking water supply projects from source to distribution system, which includes manufacturing, supplying, laying, joining of pipeline and includes construction of pump house, delivery, commissioning of turbine pump sets, installation of booster mains, branch mains and elevator reservoirs etc. With this explanation of activity, it was contended that the assessee was engaged in development of infrastructure facility as defined in explanation (c) to Section 80IA(4). The assessee, on these facts and relying upon Tribunal’s decision in the case of Patel Engineering Ltd (84 TTJ 646), claimed a deduction of ~.11,39,42,000 u/s. 80IA of the Act. The Assessing Officer, however, did not accept the said claim. He was of the view that the assessee was a contractor and not developer. Relying upon Honourable Supreme Court’s judgement in the case of CIT vs. N.C.Budhiraja & Co. (204 ITR 412), the Assessing officer concluded that the assessee cannot be termed as developer of a project merely because assessee has executed the project for actual developer of infrastructure facility, i.e. Government or Semi-government body concerned, and that the assessee company cannot be construed as an enterprise carrying on business of developing, operating and maintaining of any infrastructure facility. As regards decision of a coordinate bench in the case of Patel Engineering (supra), the Assessing Officer observed that the decision has been challenged before Hon’ble Bombay High Court and does not thus give finality to the dispute. The Assessing Officer thus declined the deduction u/s. 80IA, amounting to Rs. .11,39,42,000 to the assessee. Aggrieved, assessee carried the matter in appeal but without any success. Learned CIT(A) upheld the stand of the Assessing Officer and, inter alia, observed as follows: