Case Law Details
Bharat Engineering Construction Co. Pvt. Ltd. Vs ACIT (ITAT Chennai)
The case of Bharat Engineering Construction Co. Pvt. Ltd. vs. ACIT was brought before the Income Tax Appellate Tribunal (ITAT) in Chennai. The dispute revolves around the eligibility of the assessee for deduction under Section 80IA of the Income Tax Act based on the nature of work executed.
Bharat Engineering Construction Co. Pvt. Ltd. (the assessee) filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) for disallowance of deduction under Section 80IA for the assessment year 2011-12.
The key contention of the assessee was that it qualifies for the deduction under Section 80IA as it is a developer of infrastructure projects, fulfilling the conditions specified in the section. However, both the Assessing Officer and the Commissioner of Income Tax (Appeals) disallowed the deduction, considering the assessee as a simple works contractor executing civil construction work for government and semi-government departments.
The ITAT, in its analysis, emphasized the importance of examining the agreements entered into by the assessee with government and semi-government departments to ascertain the nature of the work executed. It highlighted that the terms and conditions of these agreements are crucial in determining whether the assessee is a developer of infrastructure projects or a mere contractor.
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