ACIT, Circle 15(1), C.R. Bldg., I.P. Estate, New Delhi. Vs. Rajahmundry Expressway Ltd., 16/17, LSC, 2nd Floor, Ahulwalia Chambers, Madan Gir, New Delhi.
July, 08th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `F': NEW DELHI
BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER
SHRI C.M. GARG, JUDICIAL MEMBER
ITA No. 2798/Del/2011
Assessment Year: 2007-08
ACIT, Rajahmundry Expressway Ltd.,
Circle 15(1), 16/17, LSC, 2nd Floor,
C.R. Bldg., I.P. Estate, Vs. Ahulwalia Chambers,
New Delhi. Madan Gir, New Delhi.
Appellant by : Shri Vikram Sahay, Sr. DR
Respondent by : Shri Vinod Modi, CA
Date of Hearing: 01/07/2015
Date of Pronouncement: 07/07/2015
PER C.M. GARG, J.M.
This appeal by the Department has been directed against the order of
the CIT(Appeals)-XVIII, New Delhi dated 24/02/2011 in appeal no.
213/2009-10 for A.Y. 2007-08. The main grounds raised by the Revenue
read as under:
1. "That on the facts and circumstances of the case and in law, the ld.
CIT(A) has erred in deleting the addition of Rs. 9,90,17,861/- made
by the AO on account of claim of depreciation u/s 80IA(4)(i) of the
I.T. Act, 1961.
ITA No. 2798/D/2011 2
2. That on the facts and circumstances of the case and in law, the ld.
CIT(A) has failed to appreciate that fact that the scope of work of the
assessee was both rehabilitation and strengthening of the existing two
lane highway apart from widening thereof to four lanes and
therefore, deduction u/s 80IA would not be available on the project
income as the clarification contained in CBDT Circular No. 4/2010."
2. We have heard arguments of both the sides and carefully perused
the relevant material placed on record. At the outset the ld. Authorized
Representative (AR) submitted a copy of the order of ITAT `D' Bench,
Mumbai in assessee's own case for A.Y. 2008-09 on the similar issue
ordered dated 02/06/2015 in ITA No. 253/Mum./2012 and submitted that
the issue is squarely covered in favour of the assessee and the CIT(A) was
right in grating relief for the assessee.
3. The ld. DR contended that the CIT(A) has erred in deleting the
addition made by the AO on account of claim of deduction u/s 80IA(4)(i) of
the Income Tax Act, 1961 (for short the Act). The ld. DR further contended
that the CIT(A) has failed to appreciate that fact that the scope of work
undertaken by the assessee was both rehabilitation and strengthening of
the existing two lane highway apart from widening thereof to four lanes.
Therefore, deduction u/s 80IA of the Act would not be available on the
project income as per clarificatory circular of CBDT No. 4/2010. However,
the ld. DR fairly accepted that the similar issue on similar facts and
circumstances for A.Y. 2008-09 has been decided by the ITAT Mumbai
Bench in favour of the assessee by order dated 02/06/2015 (supra). The
ITA No. 2798/D/2011 3
ld. AR placed a rejoinder and submitted that as per order of the ITAT Pune
in the case of Rohan & Rajdeep Infrastructure in ITA No. 1214/PN/2010
dated 05/04/2013 circular no. 4/2010 of CBDT was applied by the Tribunal
hold that the widening of roads would amount to creation of new
infrastructure facility falling within the purview of section 80IA of the Act.
The ld. AR submitted that the developing of an infrastructure facility also
include improvement of existing infrastructure facility which brings more
efficiency and effective use of infrastructure facility supported by benefit of
enduring nature and road widening work is a substantial improvement of
existing road. Therefore, the assessee is entitled for deduction u/s 80IA(4)
of the Act.
4. On careful consideration of above submissions, we note that the ITAT
`B' Bench Mumbai in assessee's own case for A.Y. 2008-09 ordered dated
02/06/2015 (supra) has decided the similar issue in favour of the assessee
with following observations and conclusion:
"4. At the time of hearing the ld. Counsel also submitted that the
first year of the claim of deduction u/s 80IA was A.Y. 2006-07
wherein the AO, in the proceedings u/s 143(3) of the Act, accepted
that assessee is eligible to claim deduction of Rs. 1,85,80,756/- and
this order was not reversed by the Revenue either by issuance of
notice u/s 147 or by taking recourse to the powers vested under in the
Commissioner of Income Tax u/s 263 of the Act and thus the same
attained finality. Though he submitted that in respect of A.Y. 2007-
08 the matter is pending before the ITAT, Delhi Benches but at the
ITA No. 2798/D/2011 4
same time submitted that the facts being not in dispute the issue can
be decided in any year and it is not necessary to keep the matter in
abeyance till the disposal of the earlier years order. He also relied
upon the decision of the ITAT Pune in the case of Rohan & Rajdeep
Infrastructure (ITA No. 1214.PN/2010 dated 05.04.2013 wherein
circular no. 4/2010 was applied by the Tribunal to hold that
widening of roads would amount to new infrastructure facility falling
within the purview of section 80IA of the Act.
5. On the other hand, the ld. DR submitted that section 80IA(4)
speaks of developing of an infrastructure facility which implies that it
should be a new infrastructure facility; development of already
existing infrastructure facility would not cover u/s 80IA(4) of the Act.
He thus supported the order passed by the CIT(A).
6. We have heard the rival submissions and carefully perused the
record. Section 80IA mainly speaks of development of infrastructure
facility; whether widening of roads would amount to development of
infrastructure facility has been clarified by the CBDT and the same is
binding on the Revenue. In the light of the circular issued by CBDT
and also the decision of ITAT Pune Bench, the expression
development of infrastructure facility includes widening of roads.
Under these circumstances we do not find any infirmity in the order
passed by the CIT(A)."
5. In view of above in the light of clarificatory circular issued by CBDT
and respectfully following the decision of ITAT Pune Bench in the case of
Rohan & Rajdeep Infrastructure (supra) and order of the ITAT Mumbai
dated 02/06/2015 in assessee's own case for subsequent assessment year
2008-09 (supra), we are inclined to hold that section 80IA of the Act mainly
speaks about development of infrastructure facility and whether widening of
ITA No. 2798/D/2011 5
roads would also fall under the ambit of development of infrastructure
facility has been further clarified by the CBDT by circular no. 4/2010 which
is obviously biding on the revenue authorities. Under above noted facts
and circumstances on logical analysis of the operative part of CIT(A) from
para 4.1 to 4.3 of the impugned order. We note that the CIT(A) after
properly considering circular no. 4/2010 of CBDT and relevant provision of
section 80IA(4)(i) of the Act. Rightly drawn a conclusion that the project of
development and widening road under taken by the assessee qualifies the
definition of new infrastructure facility for the purpose of claiming deduction
u/s 80IA(4)(i) of the Act and the CIT(A) was correct and quite justified in
deleting the addition made by the AO in this regard. We are unable to see
any ambiguity, perversity or any other valid reason to interfere with the
impugned order and we upheld the same. Accordingly, both the grounds
no. 1 & 2 of the revenue fails and be dismissed the same.
6. In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 07/07/2015
(J.S. REDDY) (C.M. GARG)
ACCOUNTANT MEMBER JUDICIAL MEMBER
ITA No. 2798/D/2011 6
5. DR, ITAT, New Delhi.
ITA No. 2798/D/2011 7
Sl. Description Date
1. Date of dictation by the Author 03/07/2015
2. Draft placed before the Dictating Member 06/07/2015
3. Draft placed before the Second Member 07/07/2015
4. Draft approved by the Second Member 07/07/2015
5. Date of approved order comes to the Sr. PS 07/07/2015
6. Date of pronouncement of order 07/07/2015
7. Date of file sent to the Bench Clerk 07/07/2015
8. Date on which file goes to the Head Clerk
9. Date of dispatch of order