DCIT, CORPORATE CIRCLE-1(1), BHUBANESWAR vs. M/S. ARSS INFRASTRUCTURE PROJECTS LTD., BHUBANESWAR

1 ITA No .247/ CTK/ 2017 Asse ssment Year : 20 14- 15

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No.247/CTK/2017 Assessment Year : 2014-15

DCIT, Corporate Circle 1(1), Vs. ARSS Infrastructure Projects Bhubaneswar, Ltd.,Plot No.38, Sector-!, Zone -D, Mancheswar Industrial Estate, Bhubaneswar. PAN/GIR No.AADCA 4203 D (Appellant) .. ( Respondent)

Assessee by : Shri P.S.Panda/K.K.Agarwal, ARs Revenue by : Shri Saad Kidwai, CIT DR

Date of Hearing : 17/04/ 2018 Date of Pronouncement : 17 /04/ 2018

O R D E R Per N.S.Saini, AM This is an appeal filed by the revenue against the order of the

CIT(A)-1, Bhubaneswar dated 31.3.2017 for the assessment year 2014-

15.

“On the facts and in the circumstances of the case, the CIT(A) is not justified in law as well as on facts in deleting addition of Rs.18,14,52,044/- by way of disallowance of deduction claimed u/s. 80IA(4) of the Act.” 3. The brief facts of the case are that the assessee derives its business

income from infrastructural development. It filed the return of income on

30.11.2014 showing income of Rs.17,37,66,370/- after claiming

2 ITA No .247/ CTK/ 2017 Asse ssment Year : 20 14- 15 deduction u/s.80IA(4) of Rs.18,14,52,044/-. In the assessment made

u/s.143(3) on 27.12.2016, the Assessing Officer disallowed deduction

u/s.80IA(4) of Rs.18,14,52,044/-.

assessee held as under:

“4. I have considered the matter and perused the appellate orders referred to by the assessee in its written submission, It is seen that the Hon'ble IT AT, Cuttack in its order dt.13.6.2013 in ITA Nos.142 & 143/CTK/2010 for the AYs 2006-07 and 2007-08, while adjudicating on assessee's appeals against the orders u/s.263 of the CIT, Bhubaneswar has held that the assessee is entitled to deduction u/s.80IA(4). The relevant portion of the ITAT's order is reproduced below:

n10. Now coming to the merits of the deduction u/s. 80IA(4) of the Act. A perusal of the provisions of section 80IA(4) of the Act shows that in the expli Infrastructure facility' has been specified to mean a road including a toll 2 bridge or a rail system. Admittedly, the assessee is - doing the busing development of railway tracks and bridges thereof as also roads. If, we are to the contention- of the Ld. CIT that the provisions of section 80IA(4) of the Ac the substitution of the explanation to section 80IA of the Act was introduce only for the purpose of giving the benefit to BOT contracts then, the explanation to section 80IA(4) of the Act becomes otiose. This is as explanation to section 80IA(4) of the Act specifically provides for the road to include a toll road, a bridge or a rail system. BOT contract in respect of the railway system can never exist. Further, a perusal of the provisions of section 80IA of the Act shows that the term 'works' and 'contract' is defined in the said section. However, the terms works 'contract' is defined in the provisions of section 194C of the Act. If a particular word or term is not defined in the specific section then, one could go to other sections in the said Act where the definition would be available to draw a meaning to the said terms. In the provisions of section 194C of the Act, work has been given an inclusive definition but " in the subsequent portion it has excluded the manufacturing of supplying a product according to requirement or specification of a customer by material purchased from a person other than such customer: As has been specified by the Ld. AR, the

3 ITA No .247/ CTK/ 2017 Asse ssment Year : 20 14- 15 assessee is doing contract work but that work is according to the requirement and specification of the customer and the same has been done by using materials purchase from third parties other than the customers. Thus, though the assessee is doing a works contract the same would not fall within the meaning of the word 'works contract' for the purpose of the Act due to the exclusion provided in the meaning of 'work' in section 194C of the Act. The issue raised by the Ld. CIT the assessee is not doing the development work but is only doing the contract also does not stand to test as the assessee admittedly is developing the roads and railway lines and the bridges thereof. Development encompasses within itself contract work. The agreement between the assessee and the customer being the government is for the development of the infrastructure facility being roads and rail systems and bridges by participating in the tenders. Under these circumstances, we are of the view that the AO was right in law in granting the assessee the benefit of deduction u/s. 80IA(4) of the Act. On this ground also, we are of the view that the Ld. CIT's order passed u/s. 263 of the Act is unsustainable and is liable to be quashed and we do so. Here, we may specifically mention that in view of the fact that the explanation to section 80IA(4) of the Act which has been substituted by the Finance, Act, 2009 with retrospective effect of 01.04.2000 is attempting to take away the statutory benefit granted to the assesses u/s. 80IA(4) of the Act without making any amendment to the explanation to section 80IA(4) of the Act, the said explanation substituted by the Finance Act, 2009 1.4..2000 being an hindrance to the deduction available the assessee under the provisions of section 80IA(4), the said explanation would have to stand down in view of the decision of the Hon'ble Supreme Court in the case of S. Sundaram Pillai, referred to supra. Consequently, on this ground also the order passed u/s. 263 of the Act by the Ld. CIT for A Y 2006-07 is quashed. Appeals of the assessee are allowed. " 4.1 The above order of the Hon'ble Tribunal is binding on the CIT(A), Hence, respectfully following the same, I direct the AO to allow the claim for deduction u/s.80IA(4) to the assessee. Hence, the addition made by the AO of Rs.18,14,52,044/- by way of disallowance of deduction claimed u/s.80IA(4) is deleted.” 5. Ld D.R. could not point out any specific error in the order of the

CIT(A). He could not point out any distinguishing features in the order of

the Tribunal quoted by the CIT(A) in his order. He also could not bring

4 ITA No .247/ CTK/ 2017 Asse ssment Year : 20 14- 15 any material on record to show that the order of the Tribunal relied on by

the CIT(A) while deleting the disallowance of deduction u/s.80IA(4) was

varied in appeal by any higher forum. Therefore, we find no infirmity in

the order of the CIT(A), which is hereby confirmed and ground of appeal

of the revenue is dismissed.

Order pronounced on 17 /04/2018. Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIALMEMBER ACCOUNTANT MEMBER Cuttack; Dated 17 /04/2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : DCIT, Corporate Circle 1(1), Bhubaneswar, 2. ARSS Infrastructure The Respondent. Projects Ltd.,Plot No.38, Sector-!, Zone -D, Mancheswar Industrial Estate, Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar BY ORDER, 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// SR.PRIVATE SECRETARY ITAT, Cuttack