NEC-NCC Maytas Joint Venture, Hyd, Hyderabad v. ACIT, Cirlce-6(1), Hyd, Hyderabad

ITA 430/HYD/2016 | 2007-2008
Pronouncement Date: 12-05-2021 | Result: Dismissed

Appeal Details

RSA Number 43022514 RSA 2016
Assessee PAN AAAAN3690E
Bench Hyderabad
Appeal Number ITA 430/HYD/2016
Duration Of Justice 5 year(s) 1 month(s) 14 day(s)
Appellant NEC-NCC Maytas Joint Venture, Hyd, Hyderabad
Respondent ACIT, Cirlce-6(1), Hyd, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 12-05-2021
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB-A
Tribunal Order Date 12-05-2021
Date Of Final Hearing 06-01-2021
Next Hearing Date 06-01-2021
Last Hearing Date 12-06-2018
First Hearing Date 18-11-2020
Assessment Year 2007-2008
Appeal Filed On 28-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD. BEFORE SHRI S.S. GODARA JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. & ASST. YEAR APPELLANT RESPONDENT 1. 496 /HYD/201 8 2006 - 07 M/S. NEC NCC MAYTAS JV VI - 1 6 - 3 - 652 DHRUVATARA APARTMENTS SOMAJIGUDA HYDERABAD . PAN AAAAN 3690E DY. COMMISSIONER OF INCOME TAX CIRCLE 6(1) HYDERABAD. 2. 430 /HYD/201 6 2007 - 08 - DO - ACIT CIR.6(1) HYDERABAD. 3. 431/HYD/2016 2008 - 09 - DO - - DO - 4. 2137/HYD/2017 2009 - 10 - DO - - DO - 5. 432/HYD/2016 2010 - 11 - DO - INCOME TAX OFFICER WARD 6(1) HYDERABAD. 6. 1129/HYD/2018 2011 - 12 - DO - - DO - 7. 1130/HYD/2018 2012 - 13 - DO - - DO - 8. 1131/HYD/2018 2013 - 14 - DO - - DO - 9. 1132/HYD/2018 2014 - 15 - DO - ASST. COMMISSIONER OF INCOME TAX CIRCLE 6(1) HYDERABAD. APPELLANT BY : SHRI MOHD. AFZARL (A.R.) RESPONDENT BY : SHRI YVST SAI (CIT - D.R.) 2 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 DATE OF HEARING : 19.02. 2021. DATE OF PRONOUNCEMENT : 12 .05. 2021. O R D E R PER S.S. GODARA J.M. : THE INSTANT BATCH OF NINE CASES PERTAINS TO A SINGLE ASSESSEE M/S. NEE - NPC - MYTAS - JV. A LL THESE NINE APPEALS ARISE AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS) - 12 HYDERABADS ORDER DT.16.08.2017 IN CASE NO .0149/2016 - 17 FOR ASSESSMENT YEAR 2006 - 07; THE CIT(APPEALS) - 9 HYDERABADS COMMON ORDER DT. 3 1.12.201 5 PASSED IN CASE NO S.0273/ACIT CIRCLE 6(1)/20 15 - 16; 0311/ACIT CIRCLE 6(1)/2015 - 16 AND 0339/ITO WARD 6(1)/2015 - 16 IN ASSESSMENT YEAR S 2007 - 08 2008 - 09 AND 2010 - 11; THE CIT(APPEALS) - 9 HYDERABADS ORDER DT.7.7.2017 IN CASE NO .0231/ITO WARD 6(1)/2016 - 17 FOR ASSESSMENT YEAR 2009 - 10 AND CIT(APPEALS) - 6 HYDERABADS SEPARATE ORDERS; ALL DT.26.2.2018 IN CASE NOS .1165/2014 - 15/B1/CIT(A) - 6; 0034/2015 - 16/B2/CIT(A) - 6; 0037/2016 - 17/B2/CIT(A) - 6 AND 0460/2016 - 3 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 17/B2/CIT(A) - 6 FOR ASSESSMENT YEARS 2011 - 12 TO 2014 - 15; RESPECTIVELY. RELEVANT PROCEEDINGS IN FIRST AND F OREMOST ASSESSMENT YEAR 2006 - 07 ARE UNDER SECTION 143(3) R.W.S. 254 AND U/S. 143(3) OF THE INCOME TAX ACT 1961 ('IN SHORT THE ACT') ; RESPECTIVELY. HEARD BOTH PARTIES. CASE FILES PERUSED. 2. BOTH THE LEARNED REPRESENTATIVES STATE AT THE OUTSET THAT THE ASSESSEES IDENTICAL SOLE SUBSTANTIVE GRIEVANCE THAT IN A LL THESE NINE CASES SEEKS TO REVERSE BOTH THE LOWER AUTHORITIES ACTION DISALLOWING ITS 80IA DEDUCTION CLAIM (S) OF RS.2 85 67 175/ - RS.1 62 25 941/ - RS.1 85 37 574/ - RS.6.65 60 238/ - RS.2 01 03 559/ - . RS.49 40 186/ - RS.5 85 122/ - RS.3 85 097/ - AND RS.13 15 184/ - ; ASSESSMENT YEARS RESPECTIVELY PERTAIN ING TO EXECUTION OF THE ALLEGED CONTRACT WORKS FORMING PART OF M/S. BHIMA LIFT IRRIGATION SCHEME IN MAHABOOB NAGAR DISTRICT TELANGANA STATE ( ERSTWHILE UNDIVIDED ANDHRA PRADESH ) . LEARNED COUNSEL INVITED OUR ATTENTION TO THE T RIBUNALS FIRST ROUND 4 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 REMAND ORDER DT.8.3.2013 IN ASSESSEE'S APPEAL IN ITA NO.517/HYD/2010 IN A.Y. 2006 - 07 RESTORING THE INSTANT SOLE ISSUE BACK TO THE ASSESSING OFFICER AS UNDER : 5 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 6 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 7 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 8 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 9 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 10 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 11 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 12 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 13 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 IT IS IN THIS BACKDROP THAT WE DEAL ASSESSEE'S APPEAL ITA NO.496/HYD/2018 FOR ASSESSMENT YEAR 2006 - 07 AS THE LEAD CASE. 3. MR. AFZAL NEXT TOOK US TO THE ASSESSING OFFICERS CONSEQUENTIAL SECOND ROUND ORDER DT.28.2.2014 REITERATING THE IMPUGNED SECTION 80IA(4) DEDUCTION DISALLOWANCE OF RS.2 85 67 175 AS FOLLOWS : ---- SPACE LEFT INTENTIONALLY ------- 14 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 15 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 16 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 17 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 THE OXFORD DICTIONARY GIVES THE MEANING FOR THE WORD EXECUTE AS TO CARRY OUT A WORK OR AN ORDER. THE WORK CARRIED OUT BY THE ASSESSEE CLEARLY 18 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 19 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 20 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 21 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 22 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 23 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 24 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 25 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 26 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 27 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 28 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 29 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 THE CIT(APPEALS) ADMITTEDLY CONFIRMED THE ASSESSING OFFICERS ACTION. THIS IS WHAT LEA VES THE AS SESSEE'S A GGRIEVED . MR. AFZA L VEHEMENTLY SUBMITTED DURING THE COURSE OF HEARING THAT BOTH THE L OWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING ASSESSEE'S 80IA(4) 30 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 DEDUCTION CLAIM DESPITE THE FACT THAT IT HAS DEVELOPED THE IMPUGNED INFRASTRUCTURE FACILITIES. HE HAS FUR THER FILED A DETAILED WRITTEN SYNOPSIS SUMMARIZING ASSESSEE'S ARGUMENT S AS UNDER : 1. THE ASSESSEE HEREIN IS A JOINT VENTURE MAYTAS NCC JV. THE JOINT VENTURE IS A CONSORTIUM OF MAYTAS INFRA LTD. (PRESENTLY KNOWN AS IL & FS ECC LIMITED) AND NAGARJUNA CONSTRUCTION COMPANY LIMITED (PRESENTLY KNOWN AS NCC LIMITED) AND ENGAGED IN DEVELOPMENT OF IRRIGATION PROJECTS WHICH ARE DEFINED AS INFRASTRUCTURE FACILITIES. DURING THE FINANCIAL YEAR 2005 - 06 THE ASSESSEE UNDERTOOK 6 DIFFERENT INFRASTRUCTURE FACILITIES BEING IRRIGATION PROJECTS. THE DETAILS OF THE PROJECTS ELIGIBLE FOR DEDUCTION U/S 801A ARE MENTIONED AT PAGE 18 OF THE PAPER BOOK. 2. THE ASSESSEE SUBMITS THAT IT IS A CONSORTIUM OF COMPANIES. IT ENTERS INTO AGREEMENTS WITH STATE GOVERNMENT; THE STATE GOV ERNMENT ALLOTTED THE WORK OF DEVELOPMENT OF IRRIGATION PROJECTS AND THE INCOME THEREON IS ELIGIBLE FOR DEDUCTION U/S 801A (4) OF THE I.T.ACT. ACCORDINGLY THE ASSESSEE FILED THE RETURN OF INCOME ADMITTING NIL INCOME. 3. THE ASSESSMENT WAS ORIGINALLY COMPL ETED U/S 143(3) OF THE I.T.ACT ON 18.11.2008 DENYING THE DEDUCTION CLAIMED U/S 80IA OF THE ACT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) VIDE ORDER DATED 15.06.2009 DISMISSED THE APPEAL FILED. ON FURTHER APPEAL FILED BEFORE THE HON'BLE INCOME TAX A PPELLATE TRIBUNAL THE HON'BLE ITAT VIDE ORDER IN ITA 31 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 NO.1040JHYDJ2009 DATED 31.10.2012 SET ASIDE THE ISSUE TO THE FILED OF THE ASSESSING OFFICER. THE DIRECTIONS ARE AT PARA 7 PAGE 9 OF THE ORDER OF THE HON'BLE ITAT. 4. THE ASSESSING OFFICER COMPLETED T HE REASSESSMENT U/S 143(3) RWS 2S4 OF THE LT.ACT ON 26.03.2014 AND REJECTED THE CLAIM FOR DEDUCTION U/S 80IA OF THE ACT. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER MENTIONED THAT - A) THE ENTIRE PROJECT IS NOT EXECUTED BY THE ASSESSEE AND ONLY PART OF THE PROJECT WAS UNDERTAKEN; B) THE INFRASTRUCTURE FACILITY WAS NOT OPERATED BY THE ASSESSEE AND THE ASSESSEE DID NOT COMMENCE THE OPERATING AND MAINTENANCE AND THEREFORE FAILED TO JUSTIFY THE CRUCIAL CONDITION. C) THE ASSESSING OFFICER IS OF THE VIEW T HAT THE INFRASTRUCTURE FACILITY SHOULD BE OWNED FOR A SUBSTANTIAL PERIOD WITH A CONDITION THAT THE ASSESSEE SHOULD BE ELIGIBLE TO OPERATE AND MAINTAIN. D) AS THE INTENT OF THE GOVERNMENT IS NOT TO GRANT DEDUCTION U/S 80IA AND ALSO BLOCK ITS FUNDS IN DEVEL OPMENTAL ACTIVITIES THE ASSESSING OFFICER REJECTED THE CLAIM FOR DEDUCTION U/S 80IA OF THE ACT. 5. BEFORE THE LEARNED CIT (A) A DETAILED SUBMISSION WAS MADE A COPY OF WHICH IS AVAILABLE AT PAGE NO. 18 & 19 OF THE PAPER BOOK. THE LEARNED CIT (A) OBSERV ED AS UNDER: 6. AT PARAS 7.0 AND 7.1 THE LEARNED CIT (A) HELD THAT FOR BEING ELIGIBLE FOR DEDUCTION U/S 80IA IT IS ENOUGH IF ANY OF THE THREE CONDITIONS I.E. DEVELOPING OR OPERATING AND MAINTAINING OR DEVELOPING OPERATING AND MAINTAINING IS FULFILLED. 32 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 7. AT PARA 7.2 THE LEARNED CIT (A) REFERRED TO THE DECISION OF THE HON'BLE ITAT MUMBAI BENCH IN THE CASE OF PATEL ENGG. CO. VS. DCIT REPORTED IN 94 LTD 411 AND HELD THAT IT IS ENOUGH IF THE APPELLANT DEVELOPS INFRASTRUCTURE FACILITY FOR BECOMING ENTITLE D FOR DEDUCTION U/S 80IA OF THE ACT. 8. AT PARA 7.4 THE LEARNED CIT (A) REFERS TO THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF ABG HEAVY INDUSTRIES AND HELD THAT THOUGH THE ASSESSEE DEVELOPS ONLY PART OF THE INFRASTRUCTURE FACILITY I T DOES NOT BAR THE ASSESSEE FROM CLAIMING DEDUCTION U/S 80IA. 9. AT PARA 7.6 THE LEARNED CIT(A) REFERS TO THE ORDER OF THE CIT (A) - 4 HYDERABAD AND HELD THAT THE WORKS EXECUTED BY THE ASSESSEE ARE NOT SIMPLE WORKS CONTRACTS BUT THEY ARE THE DEVELOPMENT OF INFRASTRUCTURE FACILITY. THE LEARNED CIT (A) ALSO EXTRACTED THE RELEVANT PORTION OF THE ORDER OF THE CIT (A) - 4 HYDERABAD. 10. AGAINST THE SAID DECISION THE DEPARTMENT IS IN APPEAL BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL. 5. MR. AFZAL ALSO T OOK PAIN S TO PLACE ON RECORD THE ASSESSEE'S TWIN SHEETS CONTAINING ARCHITECTURAL DESIGN OF S TAGES I AND II OF BHIMA LIFT IRRIGATION PROJECT CONTAINING DESIGN AND EXECUTION OF ALL CIVIL WORKS LIKE CANAL APPROACH TO THE TUNNEL TUNNEL SURGE POOL PUMP HOUSE DELIVERY MAINS ET C. H IS CASE IN LIGHT OF THE ASSESSEE'S STAND 33 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 ADOPTED THROUGHOUT AND IN VIEW OF THE DETAILED VOLUMINOUS PAPER BOOK S COMPRISING OF AGREEMENT CLAUSES TO THIS EFFECT IS THAT IT IS IN FACT THE ASSESSEE WHO HA S DEVELOPED TH E RELEVANT INFRASTRUCTURE FACILITY DEFINED IN SECTION 80IA(4) EXPLANATION ( C ) OF THE ACT AND THEREFORE WE OUGHT TO ADOPT LIBERAL CONSTRUCTION ONLY SO AS TO REVERSE THE LEARNED LOWER AUTHORIT IES ACTION MAKING THE IMPUGNED DISALLOWANCE. HE HAS ALSO FILE D A CASE LAW PAPER BOOK RUNNING INTO 93 PAGES TO BE PRECISE CONTAINING THE FOLLOWING JUDICIAL PRECEDENTS : 1 . [2005] 94 LTD 411 (MUMBAI) HON'BLE IT AT MUMBAI BENCH 'F' IN THE CASE OF PATEL ENGG LTD VS DY COMMISSIONER OF INCOME - TAX . 2 . HON'BLE ITAT MUMBAI BENCH - F ORDER IN THE CASE OF ACIT VS BHARAT UDYOG LTD. 3 . [2010] 322 ITR 323 (BOMBAY) HON'BLE HIGH COURT OF BOMBAY IN THE C ASE OF 10 - 15 CIT CENTRAL - II VS ABG HEAVY INDUSTRIES LTD. 4 . HON'BLE ITAT HYDERABAD BENCH - 'A' IN THE CASE OF KOYA & CO CONSTRUCTIONS 16 - 22 (P.) LTD VS ACIT. 34 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 5 . HON'BLE ITAT AHMEDABAD BENCH - D IN THE CASE OF SUGAM CONSTRUCTIONS PVT LTD VS ITO. 6. HON'BLE ITAT PUNE BENCH - B IN THE CASE OF B. T. PATIL & SONS BELGAUM CONSTRUCTIONS (P.) LTD VS ACIT. 7 . HON'BLE ITAT MUMBAI BENCH - C IN THE CASE OF ACIT VS PRATIBHA INDUSTRIES LTD. 8 . [2016] 76 TAXMANN.COM 105 ( JAMMU & KASHMIR) HON'BLE HIGH COURT OF JAMMU & KASH MIR IN THE CASE OF CIT VS TRG INDUSTRIES PVT LTD . 9 . [2019] 107 TAXMANN 362 (MADRAS) HON'BLE HIGH COURT OF MADRAS CIT VS CHETTINAD LIGNITE TRANSPORT SERVICES PVT LTD 10. HON'BLE ITAT HYDERABAD BENCH - B IN THE CASE OF SUSHEE HI TECH CONSTRUCTIONS PVT LTD VS DCIT. 11 . HON'BLE ITAT RAJKOT IN THE CASE OF KATIRA CONSTRUCTIONS LTD VS ACIT. 12 . HON'BLE ITAT JAIPUR BENCH - A IN THE CASE OF MIS AM METALS INFRAPROJECTS LTD. VS CIT - I JAIPUR. 6. LD. CIT - DR MR. VYS T SAI REPRESENTS THE R EVENUE IN THE INSTAN T BATCH OF CASES. HE HAS STRONGLY SUPPORTED BOTH 35 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 THE LOWER AUTHORITIES MAKING THE IMPUGNED SECTION 80IA (4) DISALLOWANCE A S PER THE FOLLOWING WRITTEN SYNOPSIS : THE FOLLOWING SYNOPSIS OF ARGUMENTS MADE DURING HEARING BEFORE THE HON'BLE ITAT ON 15.02.2021 IS FILED AS DIRECTED BY THE HON'BLE ITAT ON THE DATE OF HEARING. 1. IT IS SUBMITTED THAT THIS IS A SECOND ROUND OF LITIGATION BEFORE THE HON'BLE ITAT. IN THE FIRST ROUND HE HON'BLE ITAT WHILE SETTING ASIDE THE ORDER OF THE CIT(A) AND DIRECTING THE AO TO DECIDE THE ISSUE AFRESH HAS DIRECTED THAT THE ASSESSEE HAS TO SHOW THAT IT HAS ACTUALLY CARRIED ON DEVELOPMENT OF THE INFRASTRUCTURE FACILITY CUMULATIVELY WITH ALL THE ACTIVITIES OF DESIGN DEVELOPMENT ENGINEERING CONSTRUCTION MAINTENANCE FINANCIAL INVOLVEMENT DEFECT CORRECTION AND SUCH OTHER ANCILLARY AND INCIDENTAL WORK CONNECTED WITH THE DEVELOPMENT OF THE PROJECT IN RELATION TO CLAIM OF DEDUCTION U/S. 80 IA(4) OF THE INCOME TAX ACT. THE HON'BLE BENCH HAS ALSO DIRECTED EXAMINATION OF THE ISSUE THAT THE ASSESSEE DEVELOPED THE PROJECT AND NOT EXECUTED THE WORK MERELY AS A CONTRACTOR. 2. IT IS SUBMITTED THAT NEITHER BEFORE AO NOR BEFORE THE CIT(A) THE ASSESSEE COULD ESTABLISH THAT IT HAS DEVELOPED THE PROJECT BOTH IN TERMS OF ENTREPRENEURIAL RISK AND FINANCIAL INVOLVEMENT. FIRSTLY THE ASSESSEE IS A MERE JV WITH NO ASSETS AND NO WHERE WITHAL TO EXECUTE THE PROJECT. AS CAN BE CLEARLY SEEN FROM THE 36 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 JV AGREEMENT THE WORK WAS DISTRIBUTED AMONG THE PARTNERS OF JV WHO EXECUTED THE WORK AND ARE SEPARATELY FILING RETURNS AND ARE SEPARATELY BEING ASSESSED. WHEN THE ASSESSEE HAS NOT EXECUTED ANY WORK OF THE PROJECT AND WHEN THE DIRECTIONS OF THE HON'BLE !TAT VIDE ITS ORDER DATED 8.3.2013 HAVE BEEN DULY FOLLOWED BY THE AO THERE IS NO GROUND FOR THE ASSESSEE TO RAISE THE ISSUE AGAIN IN THE SECOND ROUND OF LITIGATION. 3. SECONDLY THE HON'BLE ITA T DIRECTED THAT IT SHOULD BE EXAMINED THAT WHETHER THE ASSESSEE HAS ACTUALLY CARRIED ON DEVELOPMENT OF THE INFRASTRUCTURE FACILITY CUMULATIVELY WITH ALL THE ACTIVITIES OF DESIGN DEVELOPMENT ENGINEERING CONSTRUCTION MAINTENANCE FINANCIAL INVOLVEMENT D EFECT CORRECTION AND SUCH OTHER ANCILLARY AND INCIDENTAL WORK CONNECTED WITH THE DEVELOPMENT OF THE PROJECT. THE HON'BLE ITAT SPECIFICALLY MENTIONED THAT FINANCIAL INVOLVEMENT OF THE ASSESSEE IS ALSO REQUIRED FOR BECOMING ELIGIBLE FOR CLAIMING THE SAID DED UCTION VI] S 80IA. IN THIS CONNECTION IT IS CLEARLY EVIDENT FROM THE PAPER BOOK (VOL.II - PT - I) FILED BY THE ASSESSEE THAT THE ASSESSEE WAS PAID MOBILISATION ADVANCE AND MONTHLY LUMP SUM PAYMENTS WHICH ARE ADJUSTED PERIODICALLY AGAINST WORK DONE. IT IS FURT HER SUBMITTED THAT EVEN FOR SUPPLY OF ELECTRO MECHANICAL AND OTHER EQUIPMENT PAYMENTS ARE MADE ON RECEIPTS OF GOODS(70%) AND INSTALLATION (20%). THESE DETAILS ARE AVAILABLE AT CLAUSES 3.15.1 TO 3.15.6 (AT PAGES 1 - 73 TO 1 - 78) OF THE CONTRACT AGREEMENT OF T HE 37 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 ASSESSEE WITH THE GOVERNMENT WITH RESPECT TO BHEEMA LIFT IRRIGATION PROJECT. FROM THE DETAILED READING OF THE ABOVE SAID CLAUSES IT IS SEEN THAT THE ASSESSEE IS NOT THE DEVELOPER BUT THE GOVERNMENT IS THE DEVELOPER. THE GOVERNMENT HAS ASSIGNED CONTRACT WORK TO THE ASSESSEE MADE ADVANCE PAYMENTS AS WELL AS MONTHLY LUMPSUM PAYMENTS. THERE IS NO FINANCIAL INVOLVEMENT OR ENTREPRENEURIAL RISK BORNE BY THE ASSESSEE. 4. IT IS SUBMITTED THAT THE LETTER AND SPIRIT OF SECTION 80IA IN GENERAL AS WELL AS EXPLAN ATION TO SEC.80IA INTRODUCED BY FINANCE ACT 2009 (W.E.F.1.4.2000) IN SPECIFIC HAS BEEN DEALT IN DETAIL BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF KATIRA CONSTRUCTION LTD [352 ITR 513]. WHEN THERE IS NO ENTREPRENEURIAL RISK AND FINANCIAL INVOLVEMENT THE ENTIRE PROJECT IS DEVELOPED BY THE GOVERNMENT AND THE ASSESSEE IS MERELY A WORKS CONTRACTOR THE ASSESSEE IS NOT BE ELIGIBLE TO CLAIM DEDUCTION IX] S 80IA ( SPECIFIC REFERENCE IS MADE TO PARAS - 27 TO 36 OF THE ABOVE REFERRED DECISION) 5. REGARDING TH E WORDS 'INCLUDING CENTRAL GOVT' IN THE EXPLANATION WHICH WERE ADDED BY THE FINANCE ACT 2009(W.E.F. 1.4.2000) IT IS SUBMITTED THAT THE SAME ARE ONLY CLARIFICATORY AND THE KEY FACTORS OF 'ENTREPRENEURIAL RISK' AND 'FINANCIAL INVOLVEMENT' ARE MANDATORY EVEN BEFORE THE INCLUSION OF SAID WORDS IN SEC. 80IA AS WELL AS EXPLANATION TO SEC.80IA OF THE INCOME TAX ACT. 38 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 6. IN SUMMARY IT IS HUMBLY SUBMITTED THAT ON BOTH THE ASPECTS OF EXECUTING OF THE WORK AND ENTREPRENEURIAL RISK AND FINANCIAL INVOLVEMENT THE CLAIM OF THE ASSESSEE FALLS FLAT AND APPEALS FILED BY ASSESSEE MAY KINDLY BE DISMISSED. 7. MR. AFZA L HAS STRONGLY REITERATED THE ASSESSEE'S STAND CLAIMING ITSELF AS DEVELOPER OF THE LIFT IRRIGATION PROJECT IN QUESTION. 8. WE HAVE HEARD THE FOREG OING RIVAL SUBMISSIONS QUA THE INSTANT ISSUE OF SECTION 80IA DEDUCTION. THE ASSESSEE HAS ADMITTEDLY CLAIMED THE SAME TAKING ITSELF AS THE DEVELOPER BY CO URT THAT A CORRESPONDING COMMERCIAL PROJECT FIRM OF INFRASTRUCTURAL FACILITY AS PER SECTION 80I A(4) EXPLN.( C ) COVERING A WATER SUPPLY PROJECT WATER TREATMENT SYSTEM IRRIGATION PROJECT SANITATION AND SEWERAGE SYSTEM OR SOLID WASTE MANAGEMENT SYSTEM ONLY. OUR ATTENTION HAS BEEN INVITED TO THE CORRESPONDING PROJECT S ARCHITECTURAL DESIGN (SUPRA ). THE ASSESSEE HAS THEREAFTER PLEADED THAT IT HAS UNDERTAKEN THE BUSINESS RISK NOT ONLY IN THE DEVELOPMENT OF THE SAID LIFT CHANNEL 39 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 FORMING PART OF THE IRRIGATION PROJECT WHICH HAS TURNED BARREN UNEVEN TRACKS OF LAND TO A C ANAL BUT ALSO IT HAD DEPLOYED ALL OF THE CORRESPONDING PLANT AND MACHINERY LABOUR FORCE FOLLOWED BY RETENTION MONEYS PROJECT THEREBY SATISFYING ALL THE CONDITIONS OF DEVELOPMENT OF INFRASTRUCTURE FACILITY. ALL TH ESE ASSESSEE'S ARGUMENTS FAIL TO EVOKE OUR CONCURRENCE FOR THE REASONS GIVEN HEREUNDER. 9.1 THE ASSESSEE'S FIRST AND FOREMOST PLEA THAT WE OUGHT TO ADOPT LIBERAL INTERPRETATION WHILE CONSIDERING SECTION 80IA(4) CLAIM IN THE LIGHT OF RELEVANT FACTS IN THE INSTANT CASE DESERVES TO REJECT . SUFFICE TO SAY S UCH A COURSE OF LIBERAL INTERPRETATION IS NO MORE AVAILABLE WHILE DEALING WITH THE INCOME TAX ACTS PROVISIONS AS PER HONOURABLE APEX COURT S RECENT CONSTITUTIONAL BENCH S DECISION IN COMMISSIONER OF CUSTOMS (IMPORT) VS. DILIP KUMAR AND CO. (2018) 9 SCC 1 SETTLING THE LAW THAT A FIS CAL STATUTE AS WELL AS AN EXEMPTION CLAUSE INCORPORATED 40 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 THEREIN OUGHT TO BE CONSTRUED IN STRICTER PARLANCE ONLY. THEIR L ORDSHIPS MAKE IT CLEAR THAT BENEFIT OF DOUBT IN CASE OF TAXING PROVISION GOES TO THE TAX PAYER AND VICE VERSA IN AN INSTAN CE OF AN EXEMPTION PROVISION. THE ASSESSEES FIRST ARGUMENT IS REJECTED THEREFORE. 10. WE NEXT EXAMINE THE MERITS OF THE AS SESSEE'S CLAIM IN LIGHT OF SECTION 80IA(4) R.W. EXPL ANATION ( C ) THEREOF. THIS IS FOR THE REASON THAT THE LEGISLATURE HAS REINTRODUCED THE EXPLANATION; FORMERLY INSERTED BY THE FINANCE ACT 2007 W.E.F. 1.4.2007 THAT F OR THE REMOVAL OF DOUBTS IT IS HER EBY DECLARED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO A PERSON WHO EXECUTE S A WORKS CONTRACT ENTERED INTO WITH THE UNDERTAKING OR ENTERPRISE AS THE CASE MAY BE FOLLOWED BY ITS SUBSTITUTION BY THE FINANCE ACT 2009 W.E.F. 1.4.2000 THAT FOR T HE REMOVAL OF DOUBT S IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO A BUSINESS REFERRED TO IN SUB - SECTION (4) WHICH IS IN THE NATURE OF A WORKS CONTRACT 41 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNM ENT ) AND EXECUTED BY THE UNDERTAKING OR ENTERPRISE REFERRED IN SUB - SECTION (1). 11. LEARNED CIT - DR AT THIS STAGE QUOTED KA T IRA CONSTRUCTIONS LIMITED VS. UNION OF INDIA AND OTHER S (2013) 352 ITR 513 (GUJ) UPHOLDING VIRES OF THE LATTER EXPLANATION THAT THE SAME I S PURELY EXPLANATORY IN NATURE THAN AMENDING THE EXISTING PROVISION AND THEREFORE THE QUESTION OF IT BEING LEVYING ANY TAX WITH RETROSPECTIVE EFFECT WOULD NOT RISE. IT IS THUS EXPLICITLY CLEAR TH A T THE IR L ORDSHIPS HAVE HELD THIS LATTER EX PLANATION IN THE NATURE OF A PLAIN AND SIMPLE ONE; NEITHER ADDING NOR SUBTRACTING ANYTHING TO THE EARLIER EXPLANATION INSERTED VIDE FINANCE ACTS 2009 AND 2007; RESPECTIVELY. LEARNED CIT - DR FURTHER SOUGHT TO PIN POINT THE FACT THAT THE LATTER EXPLANA TION INSERTED VIDE FINANCE ACT 2009 W.E.F. ;1.4.2000 HAS RATHER COVERED A WORK CONTRACT AS NOT ENTITLED FOR THE IMPUGNED DEDUCTION DESPITE THE FACT THAT 42 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 THE CONCERNED ASSESSEE SATISFIED ALL OTHER CONDITIONS IN SUB - SECTION (4) OF SECTION 80IA OF THE ACT. WE FIND FORCE IN REVENUES INSTANT ARGUMENT AS THE FINANCE ACT 2009 SUBSTITUTE S THE EARLIER EXPLANATION THAT THE SAME WOULD NOT COVER A WORKS CONTRACT FOR THE PURPOSE OF PROVIDING DEDUCTION QUA INDUSTRIAL UNDERTAKING OR ENTERPRISE ENGAGED IN INFRASTRUCTU RE DEVELOPMENT ETC. 12. THERE IS YET ANOTHER EQUALLY IMPORTANT ASPECT WHICH REQUIRES OUR APT ADJUDICATION AT THIS STAGE I.E. OF THE CLINCHING LEGISLATIVE EX PRESSION IN THE LATTER EXPLANATION NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO A BUSINESS REFERRED TO IN SUB - SECTION (4) WHICH IS IN THE NATURE OF A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR THE STATE GOVERNMENT) . WE NOTE THAT HONOURABLE APEX COURT YET ANOTHER LARGER BENCH DECISION IN KARTAR SINGH BHADANA VS. HARI S INGH NALWA & ORS CIVIL APPEAL NO.6931 OF 2000 DECIDED ON 27.03.2001 HAD AN OCCASION TO DEAL WITH THE EXPRESSION WORKS USED 43 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 IN SECTION 9 - A OF THE REPRESENTATION OF PEOPLE ACT 1951. HONBLE COURT THEREIN WENT BY THE SHORTER OXFORD ENGLISH DICTIONARY S MEANING THAT WORK MEAN S A STRUCTURE OR APPARATUS OF SOME KIND; AN ARCHITECTURAL OR ENGINEERING STRUCTURE A BUILDING E DIFI CE . WHEN IT WAS USED IN THE PLURAL THAT IS AS WORK S IT MEANT ARCHITECTURAL OR ENGINEERING OPERATION S A FORTIFIED BUILDING A DEFENSIVE STRUCTURE FORTIFICATION OR ANY OF THE SEVERAL PARTS OF SUCH STRUCTURES . THEIR L ORDSHIPS ALSO TOOK NOTE OF HONOURABLE JURISDICTIONAL HIGH COURT S JUDGMENT IN B. LAXMIK ANT H A RAO VS. D CHIN NA MALLAIAH AIR 1979 AP 132 WHILST ADOPTING THE DICTIONARY MEANING OF WORK IN FOREGOING TERM S . WE FURTHER QUOTE RAGHU NATH RAI BARA ZA VS. P NB ( 2007) 135 CO MPANY CASES 163 (SC) THAT IT IS THE CARDINAL RULE OF INTERPRETATION THAT WORDS USED BY THE LEGISLATURE ARE TO BE UNDERSTOOD IN THEIR NATURAL ORDINARY OR POPULAR SENSE OR CONSTRUCTED AS PER THEIR GRAMMATICAL MEANING UNLESS SUCH A CONSTRUCTION LEAD TO SOME ABSURDITY OR THERE IS 44 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 SOMETHING IN THE CONTEXT OR IN THE OBJECT OF THE STATUTE TO THE CONTRARY. 13. WE GO BY THE FOREGOING OBSERVATIONS OF THEIR L ORDSHIPS AND OBSERVE THAT THE STAGES I & II OF THE BHIMA LIFT IRRIGATION P ROJECT UNDERTAKEN BY THE ASSESSEE CONTAINING AL L THE CIVIL WORKS LIKE CANAL APPROACH TO THE TUNNEL TUNNEL SURGE POOL PUMP HOUSE DELIVERY MAINS MANUFACTURING TESTING INSPECTION PACKING SUPPLY ERECTION AND COMMISSIONING OF ELECTRO MECHANICAL AND HYDRO MECHANICAL EQUIPMENT INDEED FO RMED AN ARCH ITECTURAL AS WELL AS ENGINEERING STRUCTURE AND THEREFORE AMOUNTS TO AN EXECUTION OF A WORKS CONTRACT AWARDED BY THE STATE GOVERNMENT THROUGH ITS IRRIGATION DEVELOPMENT ONLY AND COVERED U/S. 80IA EXPLANATION INCORPORATED IN THE ACT BY THE FINANCE ACT 20 09 W.E.F. 1.4.2000. LEARNED CIT - DR AT THIS STAGE INVITED OUR ATTENTION TO PAGE 18 IN ASSESSEE'S PAPER BOOK II PART 1 THAT IT HAD PURELY 45 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 EXECUTED WORKS CONTRACT ONLY IN VIEW OF THE FACT THAT THE IRRIGATION DEPARTMENT HAD ISSUED IT MOBILIZATION ADVA NCES ON MULTIPLE OCCASIONS FROM TIME TO TIME. HE NEXT TOOK US TO AGREEMENT CLAUSE 3.15 CONTAINING CONTRACT PRICE AND PAYMENT MAKING IT EVIDENT THAT THE ASSESSEE HAD TO BE PAID ON FIXED LUMP SUM MONTHLY BASIS ONLY. AND FURTHER THAT THE ASSESSEE WAS EN TITLED TO GET FIXED LUMP SUM MONTHLY INSTALMENT PAYMENTS PROVIDED VALUE OF THE WORK EXECUTED IS MORE THAN OR EQUAL TO THE FIXED LUMP SUM MONTHLY INSTALMENT AS INDICATED IN THE AGREEMENT. T HE SAID AGREEMENT STIPULATED ADVANCE PAYMENT S TO THE ASSESSEE QU A SUPPLY OF GOODS AT THE SITE. ALL THESE FACTS SUFFICIENTLY INDICATE THAT THE ASSESSEE ASSUMING THAT NOT ACCEPTING THAT IT IS THE DEVELOPER U/S. 80IA(4) OF THE ACT EXECUTED A WORKS CONTRACT ONLY UNDER EXPLANATION TO SECTION 80IA OF THE ACT AND THEREFOR E NOT ENTITLED FOR THE IMPUGNED DEDUCTION. 46 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 1 4 . THE ASSESSEE NEXT MADE A VERY STRONG ENDEAVOUR TO PLACE RELIANCE ON A CATENA OF CASE LAW (SUPRA) INCLUDING CIT VS. ABG HEAVY INDUSTRIES LIMITED (2010) 322ITR 323 (BOM). WE FIND THAT NEITHER OF THESE D ECISIONS DEALS WITH THE INTERPLAY BETWEEN THE SECTION 80IA(4) VS. 80IA EXPLANATION INVOLVING EXECUTION OF WORKS CONTRACT AS IS THE FACTUAL POSITION BEFORE US. THE SAID CASE LAW DISTINGUISHED THEREFORE. 1 5 . MR. AFZAL S LAST ARGUMENT SEEKS TO BUTTR ESS THE POINT THAT SUCH A STRICT INTERPRETATION EMPLOY ED IN DEALING WITH AN INST ANCE OF DEVELOPMENT OF AN INFRASTRUCTURE PROJECT WOULD TANTAMOUNT TO CLOSING THE DEDUCTION CHAPTER ALTOGETHER AND M ORE PARTICULARLY WHEN THIS ASSESSEE HAS B ORNE ALL RISK S AND RESPONSIBILITIES OF THE LIFT IRRIGATION PROJECT BY PAYING REDUCTION MONEY AND PERFORM ANCE GUARANTEE(S) AS WELL. WE HOLD THAT THIS LAST ARGUMENT ALSO FAILS TO CUT ANY ICE SINCE THE ASSESSEE HAS MERELY PERFORM ED A WORKS CONTRACT AND ITS RETEN TION MONEY OR 47 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 THE SO CALLED PERFORMANCE GUARANTEE ONLY GAVE AN ASSURANCE TO THE IRRIGATION DEVELOPMENT THAT IT HA D CARRIED OUT THE CORRESPONDING CONSTRUCTION ETC. AS PER THE SPECIFIED DESIGN NORMS THAN INVOLVING ANY BUSINESS RISK. WE ACCORDINGLY HOLD THE VIEW OF OUR INDEPENDENT APPRECIATION OF FACTS AS WELL AS ASSESSMENT FINDINGS THAT THE ASSESSEE IS A CONTRACTO R HAVING EXECUTED WORKS CONTRACT ONLY. 16. WE ALSO DEEM IT APPROPRIATE TO QUOTE ADAM SMITH S THE WEALTH OF NATION S (PUBLISHED IN 1776 AND CALLED AS THE FOUNDING WORK ON MODERN ECONOMICS) THAT I T IS NOT FROM THE BENEVOLENCE OF THE BUTCHER THE BREWER OR THE BAKER THAT WE EXPECT OUR DINNER BUT FROM THEIR REGARD TO THEIR OWN INTEREST. 17. NEVERTHELESS THE SAME CONNOTATION APPLIES IN THE FACTS OF THE INSTANT CASE . I T IS CLEAR THAT THE ASSESSEEHAS FIRST OF ALL BEEN PAID MOBILIZATION ADVANCE S BY THE STATE GOVERNMENT S DEPARTMENT ON PERIOD IC BASIS AND THEN 48 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 ONLY IT EXECUTED THE CORRESPONDING LIFT IRRIGATION PROJECT WORKS CONTRACT FOLLOWED BY ITS YET ANOTHER CLAIM OF SECTION 80IA OF THE ACT DEDUCTION ( SUPRA). WE ARE AFRAID THAT SUCH A LIBERAL INTERPRETATION WOULD AMOUNT TO GOING AGAINST THE STRICTER INTERPRETATION PRINCIPLE IN VIEW OF HONOURABLE APEX COURT DECISION (SUPRA). WE ACCORDINGLY CONCLUDE BOTH THE LEARNED LOWER AUTHORITIES HAVE RIGHTLY DISA LLOWED ASSESSEE'S 80IA DEDUCTION CLAIM INVOLVING VARYING SUM (S) (SUPRA) IN THEIR RESPECTIVE ORDERS. THE SAME STANDS CONFIRMED. THESE ASSESSEE'S APPEALS ARE DISMISSED THEREFORE. 18. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE US. 18. THESE AS SESSEE'S APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH MA Y 2021. SD/ - SD/ - (LAXMI PRASAD SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD DT. 12 .05 .2021. * REDDY GP 49 ITA NO S . 430 TO 432/HYD/2016; 2137/HYD/2017 & 496 1129 TO 1132/HYD/2018 COPY TO : 1. M/S. NEC NCC MAYTAS JV VI - 1 6 - 3 - 652 DHRUVATARA APARTMENTS SOMAJIGUDA HYDERABAD . 2. I) DCIT CIRCLE 6(1) HYDERABAD. II) ACIT CIRCLE 6(1) HYDERABAD. III) ITO WARD 6(1) HYDERABAD. 3. PR. C I T - 6 & 12 HYDERABAD. 4. CIT(APPEALS) - 9 6 & 12 HYDERABAD. 5. DR ITAT HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY ITAT HYDERABAD.