“infrastructure facility”
The decision most relied on for infrastructure facility is CIT v. ABG Heavy Industries Ltd. (322 ITR 323), cited in 229 judgments on BharatTax.
Leading authorities on infrastructure facility
The Assessing Officer cannot deny a Section 80IA deduction by merely asserting that the assessee is not a "developer" without considering the relevant agreements and facts. Entitlement to Section 80IA deduction requires a thorough examination of the assessee's role as a developer.
Deduction under section 80-IA is available to developers who undertake entrepreneurial investment risk, not merely to contractors who undertake business risk. The nature of the work undertaken determines eligibility.
Educational institutions are not commercial activities, and collecting fees for betterment and growth does not automatically disqualify them from being considered educational. Fees collected for value-added courses, training, or hostel facilities can be eligible for exemption under Section 11 if applied towards the institution's infrastructure.
A person entering into a works contract with an enterprise eligible for deduction under Section 80-IA is not entitled to claim the tax benefit under Section 80-IA of the Act.
The Gujarat High Court holds that the explanation to Section 80-IA(4) of the Income-tax Act, regarding works contracts for infrastructure facilities, is clarificatory and explanatory in nature, not an amendment with retrospective effect. Its vires are upheld as it does not levy tax retrospectively.
A taxpayer is eligible for deduction under Section 80IA for developing and operating infrastructure facilities, with the decision clarifying the distinction between a contractor and a developer for this purpose.
Where an assessee invests its own funds in an infrastructure development project, it is presumed to be acting as a developer, not merely a contractor, making it eligible for deduction under section 80-IA(4).
A Special Bench decision of the Income Tax Appellate Tribunal concerning Section 80IA deduction for infrastructure facility developers can be recalled if it fails to consider a binding jurisdictional High Court judgment.
