> v. M/S.chettinad Lignite Transport Services Private Limited

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 3.4.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN Commissioner of Income Tax,Coimbatore.Appellant/AppellantVs. M/s.Chettinad Lignite Transport ServicesPrivate Limited,43, Race Course Road,Coimbatore - 641 018. PAN: Respondent/Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, Madras 'D' Bench, Chennai, dated 26.2.2010 made in ITANo.1179/Mds/2008 against the order of Commissioner of Income TaxAppeals-1 Coimbatore dated 26/03/2008 against the order dated26/12/2005 on the file of Assistant Commissioner of Income TaxCompany Circle 1(1), Coimbatore -18. For Respondent : Mr.Venkata Narayanan JUDGMENT (Delivered by DR.VINEET KOTHARI,J.) The Revenue has filed this Appeal under Section 260-A ofthe Income Tax Act, 1961, raising the following substantialquestions of law arising from the order of the learned Tribunaldated 26.2.2010, whereby the learned Tribunal allowed the Appealfor the Assessment Year 2005-2006 and held that the Assessee isentitled to the benefit of deduction under Section 80IA of theAct:- https://hcservices.ecourts.gov.in/hcservices/ Tribunal was right in allowing the deductionunder Section 80IA of the Act, even though theassessee does not satisfy the proviso to Sub-Section 4 of Section 80IA of the Act?ii) Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in law in allowingthe deduction under Section 80IA of the Act,without considering the explanation 13 toSection 80IA introduced by the Finance Act 2007with retrospective effect from 1.4.2000, nodeduction under Section 80IA, is allowable to aSub- Contractor?"2. Learned counsels appearing for the parties brought toour notice that the controversy involved in the present Appealis covered by the Judgment of this court dated 6.3.2019 in thecase of the same Assessee in T.C.A.Nos.741, 1266 of 2009 and 162of 2015 wherein this court has has held as under:- " 8. From a reading of the aforesaid Provisos toSection 80IA(4), it is clear that the Legislatureintended to extend the said benefit under Section80IA of the Act to an enterprise involved in (i)developing or; (ii) operating and maintaining or;(iii) developing, operating and maintaining anyinfrastructure facility. The term "infrastructurefacility" has been defined in the Explanation andthe same includes a toll road, a bridge or a railsystem, a highway project, etc. These are,obviously, big infrastructure facilities for whichthe enterprise in question should enter into acontract with the Central Government or StateGovernment or Local Authority. However, the Provisointends to extend the benefit of the said deductionunder Section 80IA of the Act even to a transfereeor a contractor who is approved and recognised bythe concerned authority and undertakes the work ofthe said development of infrastructure facility oronly operating or maintaining the same. The Provisoto sub-section (4) stipulates that subject to thefulfillment of conditions, the transferee will beentitled to the said benefit, as if the transfer inquestion had not taken place. It has been found bythe Assessing Authority himself, in the presentcase, that the present Assessee Mis. ChettinadLignite Transport Services Private Limited under anAgreement dated 16.04.2002, captioned as LigniteTransport System with Mls.ST-CMS Electric CompanyPrivate Limited, had undertaken the work ofdeveloping the said railway sidings and wasoperating and maintaining the same. The only ground on which, the Assessing Authority denied the saidbenefit was that the Assessee himself did notenter into any such contract with the Railways orwith the Central Government. on which, the Assessing Authority denied the saidbenefit was that the Assessee himself did notenter into any such contract with the Railways orwith the Central Government. 9. The learned Tribunal, however, in ouropinion, rightly applied the Proviso to Section 80IA(4) of the Act and held that since the Assessee wasrecognised as contractor for these railway sidings,which undoubtedly fell under. the definition of"infrastructure facility", it was entitled to thesaid benefit under Section 80IA of the Act. Thegrounds on which the Assessing Authority denied thesaid benefit to the Asessee ignoring the effectof Provisos to Section 80IA(4), therefore, couldnot be sustained. The learned Tribunal, in ouropinion, has rightly held that the Proviso does notrequire that there should be a direct agreementbetween the transferee enterprise and the specifiedauthority for availing the benefit under Section80IA of the Act. There is no dispute before usthat the Assessee was duly recognised astransferee or assignee of the principalcontractor M/s.ST-CMS Company Private Limited andwas duly so recognised by the Railways to operateand maintain the said railway sidings at Vadalurand Uthangalmangalam Railway Stations. The findingsof fact with regard to the said positionrecorded by the learned Tribunal are, therefore,unassailable and that clearly attracted the firstProviso to Section 80IA(4) of the Act. 10. The learned counsel for the Revenue reliedupon a decision of this Court in the case ofM/s.Covanta Samalpatti Operating Private Limited,Chennai-20 v. The Assistant Commissioner of IncomeTax, Company Circle I (3), Chennai-34, reported in(2018) 93 Taxmann 38. In the said case, the claim ofthe Assessee company, which was engaged_in powergeneration, for deduction under Section 80IA of theAct was denied by the Revenue on the ground that theAssessee Undertaking had not been set up forgeneration and distribution of power and that theAssessee was only a contractor for the maintenancework of power plant, which was owned by SamalpattiPower Corporation Private Limited (SPCL). On thesefacts, the Court held that the Assessee was notentitled to deduction under Section 80IA of the Act.We do not find any parity of facts of the said casewith the facts available before us. The powergenerating companies are entitled to deduction underSection 80IA of the Act in different sub clausesviz., under Section 80IA(4)(iv) of the Act. Where there is no such Proviso, as is available in clause(i) of Section 80IA(4) of the Act, which deals withdeduction to enterprise involved in developing,operating and maintaining the infrastructurefacilities. Obviously, if the Assessee is gettingonly fees for the maintenance of certain powergenerating plant, as was the case before the Co-ordinate Bench of this Court in Covanta case(supra), he may not be entitled to such deduction,but the fact situation before us is entirelydifferent and, therefore, we do not find any supportfrom the said case cited by the learned counsel forthe Revenue. 11. We are, therefore, of the consideredopinion that there is no merit in these appealsfiled by the Revenue and the questions of law framedabove deserve to be answered in favour of theAsessee and against the Revenue. We hereby do so.The appeals preferred by the Revenue deserve to bedismissed and accordingly, the same are dismissed.No costs." ssk.To1. The Registrar, Income Tax Appellate Tribunal, Madras "D" Bench , Chennai. 2. Commissioner of Income Tax, Appeals-I, Coimbatore.3. The Assistant Commissioner of Income-tax, Company Circle-1(I), Coimbatore.