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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
                            AND
             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.
                                              AABCR9029A
     (Appellant)                              (Respondent)


                   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


                                    ORDER

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
          Sd/-                                               Sd/-
    (J.S. REDDY)                                         (C.M. GARG)
 ACCOUNTANT MEMBER                                    JUDICIAL MEMBER

Dated: 07/07/2015
*Kavita
                            ITA No. 2798/D/2011                6



Copy to:
       1.   Appellant
       2.   Respondent
       3.   CIT
       4.   CIT(A)
       5.   DR, ITAT, New Delhi.
                              TRUE COPY
                                                              By Order


                                                  ASSISTANT REGISTRAR
                               ITA No. 2798/D/2011              7



Sl.                    Description                    Date
No.
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

 
 
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