Rohan & Rajdeep Infrastructure, Pune V. ACIT, Circle-3, Pune

ITA 1214/PUN/2010

• Counselvise Citation: 121424514 RSA 2010
• Duration Of Justice: 2 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 06-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: S V PATHAK
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1214/PN/2010 ASSESSMENT YEAR : 2006 - 07 ROHAN & RAJDEEP INFRASTRUCTURE, THE REVERIE, 1 ST FLOOR, 805, BHANDARKAR INSTITUTE ROAD, PUNE-411004 VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIR.-3, PUNE (APPELLANT) (RESPONDENT) PAN NO. AAFFR9455F APPELLANT BY: SHRI S.V. PATHAK RESPONDENT BY: MS. ANN KAPTHUAMA ORDER PER R.S. PADVEKAR, JM:- THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGN ED ORDER OF THE LD.CIT(A)-II, PUNE DATED 27-07-2010 FOR THE A.Y. 2006-0 7. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND: ON THE FACTS AND CIRCUMSTANCES PREVAILING IN THE CAS E AND AS PER PROVISIONS OF THE ACT IT BE HELD THAT, THE APPELLANT P ROJECT KNOWN AS BOT PROJECT AT HANUMANGAD IS ELIGIBLE IN TERMS OF PR OVISIONS OF SEC. 80IA OF THE ACT TO THE EXTENT OF CLAIM OF RS.2,07,51,140/ -. IT FURTHER BE HELD THAT THE CLAIM IS ALLOWABLE TO THE APPELLANT IN F ULL. IT FURTHER BE HELD THAT REJECTION OF THE CLAIM BY THE AO AND THA T CONFIRM BY THE 1 ST APPELLATE AUTHORITY IS CONTRARY TO PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE CLAIM BE ALLOWED IN FULL. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF AS PER PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. 3. THE ISSUE IN CONTROVERSY IS ELIGIBILITY OF THE DEDUCTION U/ S.80IA (4) OF THE ACT IN RESPECT OF THE PROJECT I.E. HANUMANGARH S URATGARH ROAD, RAJASTHAN WHICH HAS BEEN COMPLETED BY THE ASSESSEE. A S NOTED BY THE ASSESSING OFFICER, FOR A.Y. 2006-07 THE ASSESSEE FILED THE RE TURN OF INCOME IN WHICH DEDUCTION U/S.80IA(4) TO THE EXTENT OF RS.4 ,29,66,129/- HAS BEEN CLAIMED. THE SAID DEDUCTION WAS CLAIMED U/S.80IA IN RESPECT 2 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE OF HANUMANGARH - SURATGARH VIA PILIBANGAN ROAD WHICH CO NTRACT HAS BEEN EXECUTED BY THE ASSESSEE IN RAJASTHAN. IN THE O PINION OF THE ASSESSING OFFICER, AS PER THE CONTRACT WITH THE GOVERNMEN T OF RAJASTHAN DATED 15-12-2000, THE PROJECT EXECUTED BY THE ASSESS EE IS OF STRENGTHENING AND IMPROVEMENT OF HANUMANGARH - SURATGA RH VIA PILIBANGAN ROAD. THE ASSESSING OFFICER HAS OBSERVED THAT T O CLAIM THE DEDUCTION U/S.80IA(4), BASIC PRE-REQUISITE IS THAT THE CONC ERNED DEVELOPMENT SHOULD BE OF A NEW INFRASTRUCTURE FACILITY. THE ASSESSING OFFICER REFERRED TO AND RELIED ON CBDT CIRCULAR NO. 733, PART OF SAID CIRCULAR IS REPRODUCED IN THE ASSESSMENT ORDER. THE ASS ESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80IA (4) OF RS.4,29,66,129/- WHICH IS IN RESPECT OF THE PROJECT OF HA NUMANGARH SURATGARH ROAD IN RAJASTHAN. 4. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD.CIT(A). T HE ASSESSEE RAISED THE GRIEVANCE THAT THERE WAS NO ADEQUATE OPPOR TUNITY GIVEN BY THE ASSESSING OFFICER AND HENCE, THE ASSESSEE FILED THE ADDITIONA L EVIDENCE IN SUPPORT OF THE CLAIM OF DEDUCTION. THE LD.CIT(A) CALLED FOR TH E REMAND REPORT FROM THE ASSESSING OFFICER AND PART OF THE SAME IS REPRODUCED IN THE ORDER OF THE LD.CIT(A). IT APPEARS THAT THE ASSESS EE HAD CLAIMED THE DEDUCTION IN RESPECT OF THE SAID PROJECT U/S.80IA (4) FOR T HE A.YS. 2004- 05 AND 2005-06 ALSO. THE SAID PROJECT WAS AWARDED TO THE ASSESSEE ON 15-12-2000 AND HAS BEEN COMPLETED ON 18-05-2006. IN RESPECT OF THE MERIT OF THE CLAIM, THE COMMENTS OF THE ADDL. CIT RANGE-3, PUNE DATED 17-03-2010 WHICH WERE SUBMITTED TO THE LD.CIT (A) ARE AS UNDER : THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE IN RESPECT OF THE EXECUTION OF THE PROJECT ON BOT BASI S ARE EXAMINED. THE SUBMISSIONS MADE BY THE ASSESSEE TO T HE CIT(A)-II, PUNE, WHICH WERE FORWARDED BY YOU WERE ALSO CONSIDERED. IT IS SEEN THAT THE A.O. HAS DISALLOWED THE CLAIM OF DEDUCTION U/S.80IA BY HOLDING THAT WORK EXECUTED BY THE ASSESSEE WAS NOT FOR THE DEVELOPMENT OF 'NEW' INFRA STRUCTURE FACILITY. THE ASSESSING OFFICER RELIED UPON CIRCULAR N O. 733 OF THE 3 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE CBDT WHICH STIPULATES THE CONDITION THAT THE INFRAS TRUCTURE FACILITY DEVELOPED BY THE ASSESSEE SHOULD BE A 'NEW INFRASTRUCTURE FACILITY'. IT IS SEEN THAT THE ASSESSEE IN HIS LATEST SUBMISSION HAS NOWHERE CHALLENGED THE DECISI ON OF THE ASSESSING OFFICER TO TEST THE CLAIM OF DEDUCTION U/S .80IA(4) ON THE CONDITION OF DEVELOPMENT OF 'NEW INFRASTRUCTURE FACILITY'. INSTEAD THE ASSESSEE HAS GONE INTO DICTIONARY MEANIN G OF 'DEVELOPMENT 1 , 'INFRASTRUCTURE FACILITY' AND 'IMPROVEMENT'. THE EVIDENCES SUBMITTED BY THE ASSESSEE IN FACT PRO VE THAT THE WORK UNDERTAKEN BY THE ASSESSEE WAS THE WORK OF MER E IMPROVEMENT OF EXISTING INFRASTRUCTURE FACILITY. KIND ATTENTION IS INVITED TO THE DOCUMENT / REPORT HAVING THE TITLE B.O .T. PROJECT ON PAGE NO.2 OF THIS DOCUMENT / REPORT UNDER THE HE ADING 'NECESSITY' AT PARA 8 THE PURPOSE FOR THE PROJECT H AS BEEN MENTIONED AS FOLLOWS: 'AT PRESENT THE ROAD HAS GOT CRUST THICKNESS OF 25 CM ONLY WHILE THE PRESENT DAY TRAFFIC IS 15-26 NOS. COMMERC IAL VEHICLES PER DAY WHICH REQUIRES MINIMUM CRUST THICKNESS OF 3 7 CMS. THUS, THE WORK WAS TO INCREASE THE THICKNESS OF EXI STING ROADS HAVING LENGTH OF 26 KMS AND WIDTH OF 7 MTRS FROM 25 CMS TO 37 CMS. AT PAGE NO. 4 OF THE DOCUMENTS / REPORT AT PARA 10 UNDER THE HEADING 'PROPOSAL' THE EXACT INFORMATION OF THE WORK DONE IS MENTIONED AS FOLLOWS: 'THE PROPOSAL - 75 MM THICK DENSE BITUMEN MACADAM BY 40MM THICK A.C. AS WEARING COAT. THUS THE ASSESSEE WAS REQUIRED TO PROVIDE ADDITIONAL THICKNESS OF DENSE BI TUMEN OF 7.5 CM AND A. C. WEARING COAT OF 4 CM.' THE ASSESSEE HAS ALSO PROVIDED LISTS OF COMPLETED PR OJECTS IN INFRASTRUCTURE UNDER PUBLIC PRIVATE PARTNERSHIPS. T HE LIST CONTAINS INFORMATION ABOUT 32 COMPLETED PROJECTS, 2 ONGOING PROJECTS AND 3 PROJECTS IN PIPELINE. IT IS SEEN THAT THERE ARE FEW PROJECTS IN THIS LISTS WHICH PRIMA-FACIE LOOK LIK E NEW INFRASTRUCTURE PROJECT. THE PROJECT AT SR.NO. 1 IN THE LIST OF COMPLETED PROJECTS IS IN RESPECT OF 'KARAWATI BRIDGE'. IT SEEMS THAT THIS PROJECT IS TO BE CONSTRUCTED NEWLY UNDER THE P. P. P. PROJECT. SIMILARLY, THE PROJECTS AT SR.NO.9 TO 11 I N RESPECT OF SIHAR BYPASS, BHARATPUR BYPASS AND .PA// BYPASS SEEM TO BE PRIMA-FACIE NEW INFRASTRUCTURE PROJECTS, .ARE VERY M UCH DISTINGUISHABLE FROM THE PROJECT UNDERTAKEN BY THE A SSESSEE. HOWEVER, THE WORK UNDERTAKEN BY THE ASSESSEE IN MERE LY OF INCREASING THE THICKNESS OF THE EXISTING ROAD OF 26 KMS LENGTH WITHOUT EVEN INCREASING THE WIDTH OF THE ROAD. THUS, THE INFORMATION SUBMITTED BY THE ASSESSEE AS ADDITIONAL EVIDENCES ITSELF GOES TO PROVE THAT THE ASSESS EE HAS NOT DEVELOPED NEW INFRASTRUCTURE FACILITY WHILE UNDE RTAKING THE WORK IN RESPECT OF 26 KMS OF ROAD AS CLAIMED IN THE RETURN OF INCOME. 5. THE ASSESSEE FILED HIS REPLY TO THE REMAND REPORT OF T HE ASSESSING OFFICER AS WELL AS COMMENTS BY ADDL. CIT BEFORE THE LD.CIT(A). THE 4 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE LD.CIT(A) CONFIRMED THE VIEW OF THE ASSESSING OFFICER BY GIVING THE FOLLOWING REASONS: 4.5. I HAVE CONSIDERED THE SUBMISSIONS OF THE APP ELLANT AND THE MATERIAL AVAILABLE ON RECORD. FIRST OF ALL, THE ADDITIONAL EVIDENCE FURNISHED BY THE APPELLANT WITH AN APPLICA TION U/R.46A OF I.T. RULES HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND THE ADDL.CIT IN THEIR REPORTS. IT IS ALSO NOTICED T HAT IT IS A FACT THAT THE ASSESSMENT PROCEEDINGS WERE ACTUALLY TAKEN UP F OR HEARING IN DECEMBER, 2008 WITH THE TIME BARRING DATED WAS 3 1.12.2008 AND THEREFORE, THERE WAS NOT MUCH OPPORTUNITY GIVEN TO THE APPELLANT NOR THERE WAS SUFFICIENT TIME AVAILABLE. THE RELEVANCE OF THE DOCUMENTS PRODUCED BY THE APPELLANT IS ALSO NOT IN DISPUTE. CONSIDERING THE SAME, THE DOCUMENTS PRODUCED BY THE APPELLANT HAVE BEEN DULY TAKEN INTO CONSIDERATION AND IS THEREFORE, BEING ADMITTED U/R.46A OF I.T. RULES. NOW, IT IS A MATTER OF RECORD THAT THE AGREEMENT FOR HANUMANGARH - SURATGARH ROAD OF T HE RAJASTHAN GOVERNMENT WAS FOR STRENGTHENING AND IMPR OVING OF THE ROAD AND INCREASING ITS THICKNESS. THE ADDL. CITS REPORT DTD.17.3.2010 HAS CLEARLY BROUGHT THIS FACT ON RECORD, CITING FROM THE RELEVANT PARAS OF THESE DOCUMENTS / A GREEMENT REGARDING BOT PROJECT UNDER WHICH THE WORK WAS AWARDED T O THE APPELLANT. FOR THE SAKE OF CLARITY, PARA 4 OF THE A DDL.CVTS REPORT IS AGAIN BEING REPRODUCED BELOW : 'KIND ATTENTION IS INVITED TO THE DOCUMENT I REPORT HAVING THE TITLE B.O.T. PROJECT ON PAGE NO.2 OF THI S DOCUMENT / REPORT UNDER THE HEADING 'NECESSITY' AT PARA 8 THE PURPOSE FOR THE PROJECT HAS BEEN MENTION ED AS FOLLOWS : 'AT PRESENT THE ROAD HAS GOT CRUST THICKNESS OF 25 CM ONLY WHILE THE PRESENT DAY TRAFFIC IS 15-26 NOS. COMMERCIAL VEHICLES PER DAY WHICH REQUIRES MINIMUM CRUST THICKNESS OF 37 CMS. THUS, THE WORK WAS TO INCREASE THE THICKNESS OF EXISTING ROADS HAVING LENGTH OF 26 KMS AND WIDTH OF 7 MTRS FROM 25 CMS TO 37 CMS. AT PAGE NO.4 OF THE DOCUMENTS / REPORT AT PARA 10 UNDER THE HEADING 'PROPOSAL' THE EXACT INFORMATION OF THE WORK DONE IS MENTIONED AS FOLLOWS : 'THE PROPOSAL - 75 MM THICK DENSE BITUMEN MACADAM BY 40MM THICK A.C. AS WEARING COAT. THUS THE ASSESSEE WAS REQUIRED TO PROVIDE ADDITIONAL THICKNE SS OF DENSE BITUMEN OF 7.5 CM AND A.C. WEARING COAT OF 4 CM.' 4.6. THE CBDT CIRCULAR NO.733 MENTIONED BY THE ASSESSING OFFICER ALSO CLEARLY STIPULATE THAT THE INFRASTRUCT URE FACILITY DEVELOPED BY THE ASSESSEE SHOULD BE NEW INFRASTRUCTURE FACILI TY. STILL FURTHER, THE CBDT HAS COME UP WITH A NEW CIRCULAR NO.4/2010 VIDE F.NO.178/14/2010 - ITA NO.1 DATED 18.5.2010 IN WHICH IT HAS BEEN STATED AS UNDER: CIRCULAR NO.4/2010 SUBJECT :- WIDENING OF EXISTING ROAD - DEFINITION OF A NEW INFRASTRUCTURE FACILITY- CLARIFICATION REGARDING. 5 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE REFERENCE HAVE BEEN RECEIVED BY THE BOARD AS TO WHE THER WIDENING OF EXISTING ROADS CONSTITUTES CREATION OF NEW INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTION 80IA(4)(I) OF THEL.T.ACT, 1961. SECTION 80IA(4)(I) PROVIDES FOR A DEDUCTION TO AN UNDERTAKING ENGAGED IN DEVELOPING, OR OPERATING AND MAINTAINING, OR DEVELOPING, OPERATING AND MAINTAINI NG ANY INFRASTRUCTURE FACILITY SUBJECT TO SATISFACTION OF THE CONDITIONS LAID DOWN IN THE SECTION. THE EXPLANATIO N TO SUBSECTION 80IA(4)(I) STATES THAT FOR THE PURPOSE O F THIS CLAUSE, INFRASTRUCTURE FACILITY MEANS INTER ALIA :- '(A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYSTEM, (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVITIES BEING AN INTEGRAL PART OF THE HIGHWAY PR OJECT. THE ISSUE HAS BEEN EXAMINED BY THE BOARD. IT HAS BE EN DECIDED THAT WIDENING OF AN EXISTING ROAD BY CONSTRUCTING ADDITIONAL LANES AS A PART OF A HIGHWA Y PROJECT BY AN UNDERTAKING WOULD BE REGARDED AS A NE W INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTION 80IA(4)(I). HOWEVER, SIMPLY RELAYING OF AN EXISTING ROAD WOULD NOT BE CLASSIFIABLE AS A NEW INFRASTRUCTURE F ACILITY FOR THIS PURPOSE.' 4.7. THEREFORE,, THE APPELLANT'S CONTENTION AND EXP LANATION FURNISHED WITH THE LETTERS DATED 3 RD MAY, 2010 AND 24 TH JULY, 2010 ARE NOT FOUND TO BE TENABLE. THE CONTENTION MADE IN THE LETTER DATED 24.7.2010 THAT THESE CIRCULAR NO.4/2010 SUPPORTS TH E APPELLANT'S CLAIM IS NOT CORRECT. IN THE APPELLANT'S CASE IT WA S MERELY A CASE OF THICKENING AND STRENGTHENING OF ROAD, BY INCREASING THE THICKNESS FROM THE EXISTING THICKNESS OF 25 CMS TO 37 CMS I.E . AN INCREASE BY 12 CM. THE STRENGTHENING WAS FOR THE PURPOSES OF EXTR A LOAD OF TRAFFIC. NO WHERE THE TENDER DOCUMENT STIPULATE THAT IT WAS FOR ADDITION OF EXTRA LANES AS A PART OF THE HIGHWAY PROJECT. TO MY MIND, MERELY INCREASING THE THICKNESS OF AN EXISTING ROAD WOULD NOT QUALIFY AS A NEW INFRASTRUCTURE PROJECT. ACCORDINGLY, AND ALSO CON SIDERING THE CIRCULAR NO.4 OF CBDT, THE APPELLANT'S PROJECT DOES NO T FIT WITHIN THE PARAMETERS OF A NEW INFRASTRUCTURE FACILITY. 4.8. IN VIEW OF THE ABOVE DISCUSSION, AND CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER AND THE ADDL.CIT READ WITH THE CBDT CIRCULARS REFERRED TO ABOVE, THE APPELLANT'S CASE D OES NOT QUALIFY FOR DEDUCTION U/S.80IA(4). THEREFORE, THE DISALLOWANCE OF THE CLAIM U/S.80IA(4) MADE BY THE ASSESSING OFFICER IS UPHELD . GROUND NO. 2 IS THEREFORE, DISMISSED. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITS THAT THE ROAD CONSTRUCTED BY THE ASSESSEE IS CLOSE TO INDIA - PAKISTAN BORDER AND THERE IS HEAVY TRAFFIC DUE TO OIL DEPOTS OIL TANKER PASSING THOUGH 6 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE SAID ROAD AND ALSO HEAVY MILITARY TRAFFIC BEING A BORDER ROA D. THE EXISTING ROAD WAS NOT HAVING THE STRENGTH SO AS TO COU P UP THE TRAFFIC. HE SUBMITS THAT IT WAS NOT MERELY A REPAIRING OF ROAD BU T RE-DOING OF THE ENTIRE ROAD WORK SO AS TO HAVE THE REQUIRED STRENGTH AND WIDTH. HE SUBMITS THAT THE SAID PROJECT WAS ON THE BOT BASIS I.E. B UILT, OPERATE AND TRANSFER AND THE ASSESSEE WAS AUTHORIZED TO COLLECT TOLL. HE SUBMITS THAT AS PER THE GOVERNMENT POLICY VARIOUS PROJECTS ARE UNDERTAKEN ON THE PUBLIC AND PRIVATE PARTNERSHIP. EVEN THOUGH IN THE T ENDER, THE PROJECT IS DESCRIBED AS IMPROVING AND STRENGTHENING OF THE RO AD BUT THE FACT REMAINED THAT CONSIDERING THE WORK EXECUTED, IT REMA INS THE INFRASTRUCTURE PROJECTS ONLY. HE FURTHER SUBMITS THAT IT WAS NOT MERELY A REPAIRING OF THE ROAD AS CONCLUDED BY THE LD.CIT(A) BUT IN FACT, THE WIDTH OF THE ROAD IS ALSO INCREASED. HE SUBMITS THAT THE WORD NEW DOES NOT ALWAYS MEAN THAT IT NEVER EXISTED BEFORE OR IT SHOULD BE FRESH. HE SUBMITS THAT ON THE EXAMINATION OF THE TENDER DOCUMENTS THE PROJECT ROAD COMPLETED BY THE ASSESSEE IS NOT MERELY IMPROVEME NT AND STRENGTHENING OF THE ROAD, BUT IN FACT, IT WAS TOTAL NEW R OAD WHICH IS MUCH WIDER, MUCH SMOOTHER AND HAVING MUCH MORE STRENGT H SO AS TO TAKE ON THE LOAD OF INCREASE IN THE TRAFFIC OF THE OIL TANKER S AS WELL AS DEFENCE VEHICLES. NOWHERE IT IS DISPUTED BY THE AUTHORITIES BELOW THAT THE CAPACITY AND STRENGTH OF THE NEW ROAD WAS NEVER IN THE OLD ROAD AND ENTIRE ROAD IS REBUILT. HE SUBMITS THAT THE ASSESSEES C LAIM IS WELL SUPPORTED BY THE CBDT CIRCULAR NO. 4/2010 DATED 18-05-2010 6.1. HE FURTHER SUBMITS THAT IN THE TENDER DOCUMENTS DE TAILS OF THE EARTHWORKS TO BE CARRIED OUT ON THE SAID ROAD PROJEC T ARE GIVEN WHICH INVOLVED CUTTING, DRESSING, LYING OF SOIL ETC., TO INCREASE TH E THICKNESS OF THE FOUNDATION OF THE ROAD BY 12 CM. HE SUBMITS THAT TH ERE IS WIDENING OF THE ROAD WHICH WAS TO EXTENT OF FROM BOTH SIDE 1 METE R AND THE CONSTRUCTION INCLUDED THE EARTH WORK, SHOULDERS WORK, WBM WORK AND 7 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE BITUMINOUS WORK. HE ALSO INVITED OUR ATTENTION TO THE TOT AL EXPENDITURE INVOLVED IN THE EXECUTION OF THE CONTRACT AND SUBMITS THA T SUCH USED EXPENDITURE TO THE TUNE OF RS.6.3 CR. DOES NOT GIVE ANY IN DICATION THAT IT WAS NOT MERELY MAINTENANCE OR REPAIR WORK. IN RESPECT OF COMMENT OF THE ADDL. CIT THAT THERE IS NO WIDENING OF SAID ROAD, THE L EARNED COUNSEL SUBMITS THAT THE SAID COMMENT IS NOT FACTUALLY C ORRECT AS PER THE DRAWING WHICH IS SUPPORTING THE ARGUMENT OF THE ASSE SSEE THAT THE ROAD WAS WIDENED. HE SUBMITS THAT THE FORMATION WIDTH OF EXISTING ROAD IS NOT STATED IN THE SAID DRAWINGS AS IT WAS VARYING AND HENCE NEEDED WIDENING OF FORMATION. HE SUBMITS THAT HARD BOLDERS OF 1M W IDTH ON EITHER SIDE WERE NEWLY INTRODUCED AND THAT RESULTED INTO WIDENING OF THE ROAD. HE SUBMITS THAT THE ROAD PROJECT UNDERTAKEN BY THE ASSESSEE IS 26 KM WHICH IS STATE-HIGHWAY AND FOR THE EXECUTION OF THE SA ID WORK THE ASSESSEE WAS GIVEN RIGHT TO TOLL COLLECTION FOR 65 MONTHS. THE LEARNED COUNSEL HEAVILY RELIED ON THE CBDT CIRCULAR NO. 4/2010 DA TED 18-05- 2010. HE ALSO PLACED RELIANCE ON THE FOLLOWING PRECEDENTS/DECISIONS: 1. CIT VS. TATA HYDRO ELECTRIC POWER SUPPLY CO. 122 IT R 288 (BOM) 2. SHRISTI INFRASTURCTURE DEVELOPMENT CORPORATION LTD. VS . ITO 33 SOT 407 (DEL) HE FINALLY PLEADED FOR ALLOWING THE CLAIM OF THE ASSESSEE. 7. PER CONTRA THE LD. DR RELIED ON THE ORDERS OF THE A UTHORITIES BELOW AND PLEADS FOR CONFIRMING THE ORDER OF THE LD.CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE COMPANY IS IN THE BUSINESS OF DEVELOPING AND EXECUTION OF INFRASTRUCTURE CONTRACTS. IT IS NECESSARY T O EXAMINE THE TERMS OF THE CONTRACT WITH THE GOVT. OF RAJASTHAN. THE ASSESSEE HAS FILED THE PAPER BOOK AND A COPY OF AGREEMENT/CONTRACT WITH THE GOVT. OF RAJASTHAN DATED 15-12-2000 WHICH IS PLACED AT PAGE NO. 70 TO 79. AS 8 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE PER THE TITLE TO THE AGREEMENT IT IS MENTIONED THAT - I MPROVEMENT AND STREGTHENING OF HANUMANGARH SURATGARH ROAD VI A PILIGANGA KM. 0/0 TO 26/0 ON BOT BASIS. THE SAID AGR EEMENT IS IN THE FORM OF LEASE OF LAND AS MENTIONED IN THE RECITAL. IT IS ASSERTED THAT LESSOR GOVT. OF RAJASTHAN IS DESIROUS TO ENTRUST IMPRO VEMENT AND STRENGTHENING OF HANUMANGARH SURATGARH ROAD VIA PILIBAN GAN ON BOT BASIS. THE BID DOCUMENT AS WELL AS PROJECT REPORT ARE M ADE A PART OF THE AGREEMENT/CONTRACT. AS PER THE DOCUMENT ON RECORD, T HE LENGTH OF THE ROAD IS SHOWN AS 26 KM AND THE PROJECT COST IS SHOWN AT RS.643.02 LACS. THE NECESSITY FOR CARRYING OUT THE IMPROVEMENT AN D STRENGTHENING OF THE SAID ROAD IS STATED THAT SAID ROAD HAS GOT CRUST THICKNESS OF 25 CM ONLY, WHILE THE PRESENT DAY TRAFFIC IS 1526 NO. COMMERCIAL VE HICLE PER DAY WHICH REQUIRES MINIMUM CRUST THICKNESS OF 37 CM. THE EX ITING WIDTH OF CARRIAGE WAY WAS 7.00 M. (PAGE NO. 84 OF THE P/B). AFTER C ONSIDERING THE PROJECT REPORT WHICH IS THE PART OF THE AGREEMENT/CONT RACT IT APPEARS THAT GOVERNMENT HAS MADE THE ESTIMATION OF COST AS WE LL AS THE REVENUE COLLECTION BY AUTHORIZING THE TOLL COLLECTION TO THE PRIVATE PARTIES. AS PER THE TERMS OF AGREEMENT, THE HEIGHT OF THE ROAD HAS BEE N INCREASED BY 12 CM. IT IS MENTIONED IN THE SPECIFICATION THAT THE ROAD IS TO BE WIDENED BY 1 MTR. VIDE SHOULDERS BY USING DALMERA KANKAR IN 50 CM TH ICKNESS. IN SUM AND SUBSTANCE, WIDTH OF THE EXITING ROAD IS ALSO ENHAN CED BY 1 MTR. EACH SIDE TO COUP UP TRAFFIC/VEHICLE MOVEMENTS. 9. NOW IN THE BACKGROUND OF THE ABOVE FACTS, WE HAVE TO EXAMINE WHETHER THE DEDUCTION CLAIMED BY THE ASSESSEE IN RESPEC T OF THE PROJECT IMPROVEMENT AND STRENGTHENING OF HANUMANGARH - SURATGA RH ROAD VIA PILIBANGAN WHICH IS FOR 26 KM QUALIFY FOR DEDUCTION U/S.80IA (4) AS A NEW INFRASTRUCTURE FACILITIES. WE ARE NOT GOING INTO THE COST W ORKING BUT THE DRAWING SPECIFICATIONS ARE NECESSARY TO UNDERSTAND WHAT EXACT WORK IS DONE BY THE ASSESSEE ON SAID ROAD. 9 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE (A) NAME OF WORK:-IMPROVEMENT BY STRENGTHENING OF HANUMANGAR H- SURATGARH ROAD KM. 0/0 TO 26/0 VIA PILIBANGAN --------------7.00 MTS. CARRIAGE WAY --------------- 20 MM P.M.C. 100 MM THICK (COMPACTED) JHAMMA BALLAST 15CM BRICK ON EDGE SOILING X-SECTION OF EXISTING CARRIAGE WAY (CRUST) (B) NAME OF WORK:-IMPROVEMENT BY STRENGTHENING OF HANUMANGAR H- SURATGARH ROAD KM. 0/0 TO 26/0 VIA PILIBANGAN ---------FORMATION WIDTH 12.00 MTS ----------- X-SECTION OF CRUST OF EXISTING & PROPOSED THE ABOVE DRAWINGS (PART OF BID DOCUMENT) SHOWS EXISTING R OAD (A) AND NEW ROAD (B) WHICH SUPPORT THE CONTENTION OF THE ASSESSE E THAT THE THICKNESS AS WELL AS THE WIDTH OF THE ROAD HAVE BEEN INCR EASED. NOW THE QUESTION IS WHETHER CAN IT BE SAID THAT IT IS MERELY REPA IR AND MAINTENANCE WORK? AND OUR ANSWER SHOULD BE IN FAVOUR OF THE ASSESSEE THAT IT IS NOT MERELY A REPAIR AND MAINTENANCE WORK BU T DOING ENTIRE RESTRUCTURING OF EXISTING ROAD. THE LEARNED COUNSEL HAS PLACED IS RELIANCE ON THE CBDT CIRCULAR NO. 4/2010 DATED 10-05-201 0 WHICH IS AS REPRODUCED HERE AS UNDER:- 10 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE F. NO.L'78/14/2010-ITA.I GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI, THE 18 TH MAY, 2010. CIRCULAR NO. 4 /2010 SUBJECT:- WIDENING OF EXISTING ROAD ,- DEFINITION OF A NEW INFRASTRUCTURE FACILITY - CLARIFICATION REGARDING. REFERENCES HAVE BEEN RECEIVED BY THE BOARD AS TO WHETHER WIDENING OF EXISTING ROADS CONSTITUTES CREATION OF NEW INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTION 80IA (4)(I) OF THE INCOME TAX ACT, 1961. SECTION 80IA (4)(I) PROVIDES FOR A DEDUCTION TO AN U NDERTAKING ENGAGED IN DEVELOPING, OR OPERATING AND MAINTAINING , OR DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRU CTURE FACILITY SUBJECT TO SATISFACTION OF THE CONDITIONS LAID DOWN IN THE SECTION. THE EXPLANATION TO SUBSECTION 80IA(4)(I) STATES THA T FOR THE PURPOSE OF THIS CLAUSE, INFRASTRUCTURE FACILITY, ME ANS INTER ALIA:- '(A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYSTEM; (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVITI ES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT;' THE ISSUE HAS BEEN EXAMINED BY THE BOARD. IT HAS BE EN DECIDED THAT WIDENING OF AN EXISTING ROAD BY CONSTRUCTING ADDITIONAL LANES AS A PART OF A HIGHWA Y PROJECT BY AN UNDERTAKING WOULD BE REGARDED AS A NEW INFRASTRUCTURE FACILITY F OR THE PURPOSE OF SECTION 80IA (4) (I). HOWEVER SIMPLY RELYING OF AN EXISTING ROAD WOULD NOT BE CLASSIFIABLE AS A NEW INFRASTRUCTURE FACILITY FOR T HIS PURPOSE. (RAMAN CHOPRA) DIRECTOR (ITA-I) TELEFAX:23092107 10. THE CBDT HAS CLARIFIED THE EXPRESSION NEW INFRASTRUCTURE FACILIT Y. IN FACT THE SAID CIRCULAR SUPPORTS THE CLAIM OF THE ASSESS EE THAT THE WIDENING OF EXISTING ROAD BY CONSTRUCTING ADDITIONAL LANE AS A PART OF THE HIGHWAY PROJECT IS A NEW INFRASTRUCTURE FACILITY. SO FAR AS THE HANUMANGARH SURATGARH ROAD IS CONCERNED THE WIDTH IS ALSO INCR EASED AS ONE ADDITIONAL LANE IS DEVELOPED. IN ADDITION TO INCREAS ING THE THICKNESS OF THE ROAD, IT IS PERTINENT TO NOTE HERE THAT THE PROJECT REPORT WHICH IS THE PART OF THE AGREEMENT CLEARLY SUGGEST THAT THE EXISTING ROAD WAS NOT CAPABLE OF TAKING THE INCREASED LOAD OF THE VEHIC LES AND HENCE, THERE WAS NECESSITY FOR STRENGTHENING AS WELL AS WIDENING THE SAID ROAD. IT IS NOT THE CASE THAT MERELY SOME MINOR WORK LIKE CAR PETING HAS BEEN 11 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE DONE TO BE DONE BUT THE ADDITIONAL LANE OF 1 MTR. WIDENING WITH 12 CM INCREASED THICKNESS HAS BEEN DONE. 11. IN THE CASE OF TATA HYDRO ELECTRIC POWER SUPPLY CO. (SUPRA) THE OLD IRRIGATION DAM WAS STRENGTHENED BY USING MODERN TECHNIQU E. ON THE EXPENDITURE INCURRED FOR STRENGTHENING OF THE DAM, THE AS SESSEE CLAIMED THE DEVELOPMENT REBATE WITH THE PLEA THAT IT WAS A NEW PLANT. AS PER THE PROVISIONS OF LAW DEVELOPMENT REBATE WAS ALLOWABLE ON A NE W PLANT. WHEN THE MATTER REACHED BEFORE HON'BLE HIGH COURT THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND HON'BLE HIGH COURT HELD THAT THE ASSESSEE INCURRED A HUGE EXPENDITURE WHICH RESULTED INTO INCREASING THE LIFE OF THE EXISTING DAM AND IT WAS THE WORK OF THE CREATION OF NEW PLANT AND THE ASSESSEE WAS ENTITLED FOR THE DEVELOPMENT REBAT E. IT IS TRUE THAT THE PARAMETERS FOR THE DEVELOPMENT REBATE ARE DIFFERENT THAN THE DEDUCTION TO BE CLAIMED FOR DEVELOPING INFRASTRUCTURE FACILITIE S BUT THE PRINCIPLES UNDERLINE THE CONCEPT WHETHER THE NEW INFRASTR UCTURE MEAN WHICH IS NEVER IN EXISTENCE AT ALL AND THE SAID PRINCIPLES C AN BE APPLIED TO THE ASSESSEES CASE. WE FIND THAT IN THE CASE OF SHR ISTI INFRASTURCTURE DEVELOPMENT CORPORATION LTD. (SUPRA) ON THE IDENTICAL FACTS I.E. FOR STRENGTHENING AND IMPROVING OF THE EXISTING ROAD THE TRIBU NAL HELD THAT THE WORK IS TO BE CONSIDERED AS NEW INFRASTRUCTURE FACILITIES. 12. IT IS TRUE THAT EACH CASE IS TO BE EXAMINED ON ITS OWN FACTS. SO FAR AS THE PRESENT CASE IS CONCERNED, WE DO NOT AGREE WITH THE AUTHORITIES BELOW THAT IT IS MERELY WORK OF THE MAINTENANCE AND REPA IRS BUT IN FACT IT IS A WORK OF BRINGING INTO EXISTENCE NEW INFRASTRUCTURE FAC ILITY WHICH IS IN THE NATURE OF ROAD. WE, THEREFORE, ALLOW THE GROUND TAKEN BY THE ASSESSEE AND HOLD THAT THE ASSESSEE IS ENTITLED FOR DEDU CTION U/S.80IA(4) OF THE ACT AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCT ION TO THE ASSESSEE. 12 ITA NO.1214/PN/2010, ROHAN & RAJDEEP INFRASTRUCTURE , PUNE 13. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 05-04-2013. SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER RK/PS PUNE, DATED: 05 TH APRIL, 2013 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT (II) , PUNE 4 THE C C IT , PUNE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE