Partnership Firm cannot claim deduction U/s 80IA

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ITAT CHENNAI BENCH ‘B’

Eshwarnath Constructions

v.

Assistant Commissioner of Income-tax

IT Appeal No. 185 (Mds.) of 2012
[ASSESSMENT YEAR 2008-09]

Date of Pronouncement -15.01.2013

 

A perusal of the statutory provisions makes it clear that it does not provide a blanket deduction i.e. in order to succeed in a claim of deduction; the concerned assessee has to derive profits and gains from any business referred to in sub-section (4). Further, sub-section (4) prescribes applicability of clause i.e. the case in which the deduction provision would apply. It is in this sub-section that the legislature has enumerated the nature of the undertakings, their activities in contributing raising of infrastructure. Further, in the explanation attached to the sub-section, the legislature has also entrusted the meaning of the infrastructure facilities. In our opinion, an assessee while claiming deduction has to satisfy all conditions in sub-section (4)(1)(a) or (b) or (c). It is mandatory for the assessee to first satisfy sub-section clause (i)(a), then (b) then (c), then proviso and so on. In case the concerned assessee fails in any one of the clauses, even if it satisfies the other part of the sub-section, the claim has to be rejected. Now we proceed to decide as to whether the assessee firm satisfies sub-section (4)(i) of the “Act” or not. For the said sub-section, a reading of the provision makes it unambiguous that the concerned claimant has to be an enterprises carrying on the business of developing or operating and maintaining or developing, operating and maintaining any infrastructure facility and it has to be owned by a consortium of such company or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act. Admittedly, the assessee is a partnership firm. As we notice from the relevant statutory provision, the enterprise in the nature of firm nowhere finds mention in the mandate of the legislature.

It is a trite preposition of law while interpreting a statute and more so a fiscal statute, neither the judicial forum concerned can insert its own words nor it can take away any from the statute. As it is seen, the earlier portion of the statutory provision prescribes a company registered in India or a consortium of such companies or by an authority or corporation or any other body established or constituted and so on. In our view, the latter part is liable to be read in the light of the earlier part by following the principles of ejusdem generis. The vehement contention of the assessee is that it is also a body established or constituted under a Central Act as it is governed by Partnership Act, cannot be accepted for the reason that under the provisions of Partnership Act a firm is not created i.e. it is not a creation of statute, but it is a body of individual regulated by the statute namely Partnership Act. Hence, we hold that the assessee fails to satisfy the applicability clause of the provision as envisaged under section 80IA(4)(i) of the “Act”.