By TIOL News Service

KOLKATA, JULY 11, 2017: THE ISSUE BEFORE THE TRIBUNAL IS - Whether assessee is eligible for deduction u/s 80-1A, when it was not a works contractor simplicitor and was a developer and in addition to developing the infrastructure facility, the assessee was even operating and maintaining the same. YES is the answer.

Facts of the case:

The assessee is engaged in the business of contract work. The assessee claimed deduction u/s 80-IA in respect of some of the projects. The projects were awarded by Central / State Government / Local Authority / Statutory Body on turnkey basis. The AO treated the Assessee to be works contractor within the meaning of Explanation to Sec. 80IA. The AO disallowed the deduction claim u/s 80-IA(4) and added to the total income of assessee. The CIT(A) allowed the deduction u/s 80-IA by observing that the Assessee had acted as developer of the infrastructure facilities and has not acted merely as a work contractor, hence, it was entitled to get deduction u/s 80-IA(4) as claimed.

On Appeal, the Tribunal held that,

++ the instant issue of deduction u/s 80-IA(4) is already covered in favour of assessee in its own case by the order of Tribunal in ITA No 2168/Kol/2013 wherein it has been held that , from the perusal of the terms and conditions in the agreement, it is clear that the assessee was not a works contractor simplicitor and was a developer and hence Explanation to section 80- IA(13) does not apply to the assessee. Further, in addition to developing the infrastructure facility, the assessee was even operating and maintaining the same. Thus, clearly the assessee is eligible for deduction u/s 80-1A. The facts of the case of the assessee are identical as that of the above case of the assessee's own case. In the light of above reasoning, we hold that the order of the CIT(A) is correct and in accordance with law and no interference is called for.

(See 2017-TIOL-1010-ITAT-KOL)