INCOME TAX ACT, 1961

Section 80-IA

Deduction under section 80-IA - Allowability - Works contractor v. Developer -

Assessee, entered into nine agreements for developing/providing assessee, entered into nine agreements for developing/providing Lift Irrigation Schemes/Lift Water Supply Scheme with various State Authorities such as Irrigation and Public Health Deptt., of Himachal Pradesh Govt. and that of Govt. of Uttrakhand. It claimed deduction under section 80-IA. AO disallowed deduction on the ground that project was to be developed by assessee as per specifications and designs approved by government and same would fall in the definition of simple works contract and not Infrastructure Development Contract' as provided under section 80-IA(4). Held: Assessee utilized its funds, its expertise, its employees and took the responsibility of developing infrastructure facility. Losses suffered in the process of such development would be that of assessee. Assessee was to hand over developed infrastructure facility to the Government on completion of development and if assessee has to undertake maintenance of said infrastructure for a particular period and during the said period, if any damages were occurred, it would be responsibility of assessee, therefore, such a contract fell within the purview and scope of Infrastructure Development Contract and assessee was entitled to deduction under section 80-IA especially when deduction under section 80-IA for the relevant projects, had already been allowed in the earlier years.

Followed:Unipro Techno Infrastructure (P) Ltd. v. Dy. CIT [ITA No. 1582/CHD/2018, dt. 13-10-2020].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

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