×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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07-01-2019, Rajdeep Infrastructure, Section 80IA(4), 10(23G), Tribunal Pune
This appeal preferred by the assessee emanates from the order of the Ld. CIT(A)-2, Pune, dated 24.10.2016, for the assessment year 2012-13.
2. The relevant facts as culled out from the material on record are as under :-
The assessee is a firm engaged in the business of development, maintenance and operation of an infrastructure facility like foot over bridges and road sineages on BOT basis. The assessee electronically filed its return of income for A.Y. 2012-13 on 25.09.2012 declaring total income at Rs.Nil after claiming deduction of Rs.1,44,25,090/- u/s 80IA(4) of Income-tax Act, 1961 (hereinafter referred to as „the Act‟). The case was taken up for scrutiny and thereafter, assessment was framed u/s 143(3) of the vide order dated 23.03.2015 and the total income was determined at Rs.1,61,22,580/-. Aggrieved by the order of Assessing Officer, assessee carried the matter before Ld.CIT(A), who vide order dated 24.10.2016 (in appeal No.PN/CIT(A)-2/DCIT Cir/AN/68/2015-16/1946) dismissed the appeal of assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us and has rais d the following grounds :
1] The learned CIT(A) erred in denying the claim of the deduction u/s 80IA(4) made by the assessee to the tune of Rs.1,44,25,090/- on the ground that the assessee was not engaged in development of any infrastructure facility as laid down in section 80IA(4) without appreciating the correct facts of the case.
2] The learned CIT(A) erred in holding that the activity of construction of road signages and foot over bridges did not amount to development of infrastructure facility as stipulated in section 80IA(4) and hence, the deduction u/s 80IA(4) could not be allowed to the assessee for this year.
3] The learned CIT(A) failed to appreciate that the assessee had fulfilled all the conditions laid down for claiming deduction u/s 80IA(4) and hence, the assessee was eligible to claim the said deduction in respect of the profits derived from the activity of construction of road signages and foot over bridges over the roads carried on by the assessee for the year.
4] The learned CIT(A) ought to have appreciated that the activity of construction of foot over bridges and construction of road signages amounted to development of roads and formed an integral and mandatory part of Road and thus, the said activity was in the nature of development of infrastructure facility as stipulated u/s 80IA(4) and therefore, the deduction u/s 80IA(4) was allowable to the assessee.
5] The learned CIT(A) erred in not appreciating that -
a. The road signages constructed by the assessee included various directions boards, cautionary signs, informatory signs etc. and the said signages constructed over the roads were a part and parcel of the roads and hence, the construction of the same amounted to development of roads and thus, the deduction u/s 80IA(4) was allowable to the assessee.
b. The road signages form a mandatory part of roads as per the standards prescribed by the Ministry of Surface Transport (Roads Wing) and hence, there is no reason to hold that the construction of road signages does not amount to development of roads and thereby deny the deduction u/s 80IA(4) of the Act.
c. The assessee had obtained composite contracts for the construction of foot over bridges and constructing road signages thereon and at various stipulated locations and since, the foot over bridges were notified as infrastruc ure facility, the signages constructed thereon and at various stipulated locations could not be held to be in the nature of 'non-infrastructure' facility and therefore, the addition made was not justified.
6.1 The learned CIT(A) has erred in upholding the disallowance of advertisement tax payable Rs.16,97,094/- u/s 43B without appreciating the facts and circumstances of the case.
6.2] The learned CIT(A), n upholding the said disallowance, has not properly appreciated the fact that the amount of advertisement tax was not debited to the Profit and Loss Account and hence, could not be disallowed u/s 43B. The learned CIT(A) erred in holding that the advertisement tax had to be shown in the gross receipts.
6.3] The lea ned CIT(A) did not appreciate the fact that the said advertisement tax was payable due to pending litigation and stay was granted by the Hon'ble Madhya Pradesh High Court. The learned CIT(A) did not appreciate that the advertisement tax was essentially in the nature of a liability and would be payable either to Madhya Pradesh Government or to customers depending on the outcome of the litigations.
6.4] The learned CIT(A) confirmed the disallowance without appreciating that the appellant had not claimed any deduction of the advertisement tax in computing the taxable income.
3. Before us at the outset, ld. AR submitted that ground Nos.1 to 5 are on a single issue of denial of deduction u/s 80IA(4) of the Act and ground No.6 and its sub-grounds are with respect to disallowance u/s 43B of the Act. We first proceed to decide the first issue of denial of deduction u/s 80IA(4) of the Act.
4. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had claimed deduction u/s 80IA(4) of the Act in relation to its income derived from the business of developing, maintaining and operating of foot over bridges and road signages. He further noticed that the assessee had entered into an agreement with Indore Municipal Corporation for installation of signages and its maintenance. The Assessing Officer was of the view that the activity of installation and maintenance of signages cannot be considered to be an activity in the nature of infrastructure facilities as defined in section 80IA(4) of the Act. He further observed that the assessee‟s claim of deduction u/s 80IA(4) of the Act, for similar reasons was denied to the assessee by hispredecessor for A.Y. 2011-12. He therefore, denied the claim of deduction u/s 80IA(4) of the Act to the assessee
5. Aggrieved by the order of Assessing Officer, assessee carried the matter before the CIT(A), who noticed that an identical issue arose in assessee‟s own case before the Tribunal for A.Ys. 2010-11 and 2011-12 and the Hon‟ble Tribunal vide order dated 14.10.2015 had upheld the order of Assessing Officer / CIT(A), wherein it had also relied on the decision in the case of M/s. Rajdeep Publicity Pvt. Ltd. Vs. DCIT in ITA Nos.1782 & 1783/PN/2007 and 1414/PN/2008 for A.Ys. 2003-04 to 2005- 06 decided on 04.06.2010. He therefore, following the order of Tribunal in assessee‟s own case upheld the order of Assessing Officer.