ACIT., CENTRAL CIRCLE-2(2), HYDERABAD vs. KMC CONSTRUCTIONS LTD, HYDERABAD

Facts

The appeals concern the eligibility of the assessee company for deduction under Section 80IA(4) of the Income Tax Act for profits derived from infrastructure projects executed through Joint Ventures/Consortiums. The Assessing Officer disallowed the deduction, contending that the assessee was a works contractor and not a developer, and that the agreement was not directly with the government.

Held

The Tribunal held that the assessee company is eligible for deduction under Section 80IA(4) as it functions as a developer, undertakes entrepreneurial risks, and satisfies the conditions including entering into agreements with government authorities, even if through a JV/Consortium. Previous decisions of the Tribunal on identical facts were followed.

Key Issues

Whether the assessee company, by executing infrastructure projects as a constituent partner of a Joint Venture/Consortium, is eligible for deduction under Section 80IA(4) of the Income Tax Act.