DCIT Vs Patil Construction and Infrastructure Ltd. (ITAT Mumbai)
ITAT Mumbai held that developer is entitled for deduction under section 80-IA of the Income Tax Act for carrying out development work by entering into a contract with the Government. Accordingly, appeal allowed.
Facts- The assessee company is engaged in the business of execution of civil and development contracts and during the year under consideration the return of income was filed declaring – after claiming deduction u/s 80IA of the Act of Rs. 4,40,47,969/-. However the AO disallowed the claim of the assessee.
Conclusion- Held that in case, deduction u/s 80-IA is declined on the ground that the assessee had merely entered into an agreement with the Govt. and/or the assessee had received payments from Government, then in that eventuality an assessee who is only a ‘developer’ will never be entitled to deduction u/s 80-IA. Therefore in our view, merely because the assessee was paid by the Government for development work, it cannot be denied deduction under section 80-IA(4) of the Act. Similarly, an assessee cannot be declined the deduction on the ground that the assessee has not himself conceived the idea of infrastructure but has merely entered into a contract with the Govt.; entering into a contract with the Govt. is a sine qua non for claiming the deduction u/s. 80-IA(4).
