The Dy. Commissioner of Income Tax, Patan Circle, Patan V. M/s. Ranjit Projects Pvt. Ltd., Unjha

ITA 1832/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7666 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation
• Section: 143(3); 80IA; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NOS.1832 & 1833/AHD/2016 (ASSESSMENT YEARS : 2012-13 & 2013-14) DCIT, PATAN CIRCLE, PATAN-384 265 VS. M/S. RANJIT PROJECTS PVT. LTD., 110, OLD MARKET YARD UNJHA 384 170. [ PAN NO. AACCR 1363 Q ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S. K. DEV, SR. D.R. RESPONDENT BY : SHRI S. N. SOPARKAR, A.R. DATE OF HEARING 09.01.2019 DATE OF PRONOUNCEMENT 04.04.2019 O R D E R PER MS. MADHUMITA ROY - JM: THESE TWO APPEALS FILED BY THE REVENUE ARE AGAINST THE ORDER DATED 28.04.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - GANDHINAGAR, AHMEDABAD UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED AS TO THE ACT) ARISING OUT OF THE ORDER DATED 22.02.2016 FOR THE ASSESSMEN T YEAR 2011-12 AND DATED 29.04.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - GANDHINAGAR, AHMEDABAD UNDER SECTION 143(3) OF THE ACT ARISING OUT OF THE ORDER DATED 30.12.2015 FOR A.Y. 2012-13. SINCE BOTH THE APPEALS RELATE TO SAME ASSESSEE THO SE ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OF BY A COMMON ORDER. - 2 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 ITA NO.1832/AHD/2016 FOR A.Y. 2012-13: 2. IN THIS INSTANT APPEAL THE REVENUE HAS CHALLENGE D THE ORDER PASSED BY THE LEARNED CIT(A) IN ALLOWING AMORTIZATION EXPENSES OF RS.1,91 ,11,255/-. IN THE ASSESSMENT PROCEEDING U/S 143(3) OF THE ACT FOR A.Y. 2012-13, THE APPELLANT FILED REVISED COMPUTATION OF INCOME CLAIMING AMORTIZATION EXPENSE S AS PER CBDT CIRCULAR ALONG WITH THE COPY OF THE MEMORANDUM OF UNDERSTANDING (MOU) D ATED 31.12.2001 AND FURTHER AGREEMENT DATED 02.01.2015. THE AO, HOWEVER, DID NO T ALLOW THE AMORTIZATION EXPENSES CLAIMED BUT ALLOWED DEPRECIATION AS CLAIMED IN THE RETURN OF INCOME AT RS.80,46,626/- WITHOUT ANY ADJUDICATION OF THE CLAIM. THE AMORTIZA TION EXPENSES CLAIMED BY AND UNDER LETTER DATED 02.01.2015 IN TERMS OF CBDT CIRCULAR. THE APPEAL PREFERRED BY THE ASSESSEE FOR ALLOWING SUCH AMORTIZATION EXPENSES WAS FURTHER REJECTED BY THE LEARNED CIT(A) WHEREIN APPLICATION U/S 154 DATED 14.09.2015 HAS BE EN FILED BEFORE THE LEARNED AO TO RECTIFY THE ASSESSMENT U/S 154 AND TO ALLOW AMORTIZ ATION EXPENSES OF RS.1,92,64,308/- IN TERMS OF THE CBDT CIRCULAR NO. 09/2014 DATED 28.04. 2014. THEREAFTER, BY AND UNDER LETTER DATED 21.12.2015 C ERTAIN DOCUMENTS INCLUDING CERTIFIED COPIES OF THE CHARTERED ACCOUNTANT IN RES PECT TO DEPRECIATION ADMISSIBLE UNDER BOTH METHOD I.E. WDV AND SLM UNDER THE COMPANIES AC T, 1956 FOR F.Y. 2011-12 RELEVANT TO A.Y. 2012-13 ALONG WITH THE DETAILS OF DEPRECIATION CLAIMED IN THE EARLIER YEARS, USED IN THE CURRENT YEAR WHILE CHANGING METH OD OF DEPRECIATION AS WELL AS THE COMPLETE WORKING OF THE DEPRECIATION SO CLAIMED FOR THE YEAR UNDER REFERENCE WERE CALLED FOR BY THE LEARNED AO. HOWEVER, THE SAID CERTIFICAT E WAS NOT FURNISHED BY THE ASSESSEE ON THE GROUND THAT THE SAME WAS NOT REQUIRED. THE L EARNED AO WAS PLEASED TO REJECT THE CLAIM ON THE GROUND THAT THE DOCUMENTS AS ASKED FOR WERE NOT FURNISHED BY THE ASSESSEE. FURTHERMORE, THE CLAIM OF DEDUCTION OF AMORTIZATION EXPENSES WAS CLAIMED ONLY BEFORE THE LEARNED CIT(A) DURING THE APPELLATE PROCEEDING AND NOT IN THE RETURN OF INCOME WHO - 3 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 IN TURN REJECTED SUCH CLAIM ON 07.08.2015. NO MISTA KE, THEREFORE, FOUND APPARENT FROM THE RECORDS WHICH COULD HAVE BEEN RECTIFIED BY THE LEARNED AO AND HENCE REJECTED. IN APPEAL, THE SAME WAS ALLOWED, HENCE THE INSTANT APP EAL FILED BY THE REVENUE BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE AMORTIZATION EXPENSES IS ALLOWABLE IN VIEW OF THE CBDT CIRCULAR DATED 23.04.2014 AND THE SAME WAS NOT REQUIRED TO BE SUPPORTED BY CA CERTIFICATE. FURTHERMORE, THE CLAIM OF AMORTIZATION WAS NOT REJECTED BY THE AO ON MERIT. THE LEARNED COUNSEL FURTHER CONTENDED BEFORE US THA T THE LEARNED AO IN A.Y. 2011-12 ALLOWED AMORTIZATION OF RS.90,39,827/- BY AND UNDER ITS ORDERS DATED 23.07.2014 BASED UPON EXPENDITURE ALREADY INCURRED UPON UPTO A.Y. 20 11-12 AND ALSO THE SAME WAS ALLOWED FOR A.Y. 2013-14 U/S 143(3) OF THE ACT. AGG REGATE AMORTIZATION ALLOWABLE AS PER CBDT CIRCULAR RS.1,91,11,255/- AS AGAINST THE CLAIM OF APPELLANT FOR RS.1,92,64,309/- WAS THUS ALLOWED BY THE LEARNED CIT(A). ON THE CONT RARY THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE LEARNED AO. 4. WE HAVE HEARD THE RESPECTIVE PARTIES, WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD AND ALSO THE CBDT CIRCULAR RELI ED UPON BY THE APPELLANT IN THE PROCEEDING BELOW. THE CBDT CIRCULAR BEING NO.09/201 4 DATED 28.04.2014 HAS CLARIFIED AS UNDER: 4. THERE IS NO DOUBT THAT WHERE THE ASSESSEE INCU RS EXPENDITURE ON A PROJECT FOR DEVELOPMENT OF ROADS/HIGHWAYS, HE IS ENTITLED TO RE COVER COST INCURRED BY HIM TOWARDS DEVELOPMENT OF SUCH FACILITY (COMPRISING OF CONSTRUCTION COST AND OTHER PRE-OPERATIVE EXPENSES) DURING THE CONSTRUCTION PER IOD. FURTHER, EXPENDITURE INCURRED BY THE ASSESSEE ON SUCH BOT PROJECTS BRING S TO IT AN ENDURING BENEFIT IN THE FORM OF RIGHT TO COLLECT THE TOLL DURING THE PE RIOD OF THE AGREEMENT. HONBLE SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INVE STMENT CORPORATION LTD. VS. CIT IN 225 ITR 802 ALLOWED SPREADING OVER OF LIABIL ITY OVER A NUMBER OF YEARS ON THE GROUND THAT THERE WAS CONTINUING BENEFIT TO THE COMPANY OVER A PERIOD. THEREFORE, ANALOGOUSLY, EXPENDITURE INCURRED ON AN INFRASTRUCTURE PROJECT FOR - 4 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 DEVELOPMENT OF ROADS/HIGHWAYS UNDER BOT AGREEMENT M AY BE TREATED AS HAVING BEEN MADE/INCURRED FOR THE PURPOSES OF BUSINESS OR PROFESSION OF THE ASSESSEE AND SAME MAY BE ALLOWED TO BE SPREAD DURING THE TENURE OF CONCESSIONAIRE AGREEMENT. IT APPEARS FROM THE CBDT CIRCULAR THAT THE CLAIM OF AMORTIZATION IS BOUND TO BE ALLOWED. NEITHER THE CBDT CIRCULAR PROVIDES THAT TH E AMORTIZATION OF COST NEED TO BE ALLOWED ON THE BASIS OF CA CERTIFICATE. IT IS ALSO ON RECORD THAT THE LEARNED AO HAS ALREADY ALLOWED SUCH EXPENDITURE INCURRED FOR A.Y. 2011-12 WHILE FINALIZING ASSESSMENT U/S 143(3) OF THE ACT. WE HAVE CAREFULLY CONSIDERED THE ORDER PASSED BY THE LEARNED CIT(A). TAKING INTO CONSIDERATION THE DETAILED COMP UTATION THE LEARNED CIT(A) PASSED ORDERS IN FAVOUR OF THE ASSESSEE IN THE MANNER AS F OLLOWS: 4.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ORDER PASSED BY THE AO AND SUBMISSION MADE BY THE APPELLANT. APPELLANT HAS CLA IMED DEPRECIATION OF RS.86,10,762/- INCLUDING DEPRECIATION, OF RS.80,46, 626/-ON BRIDGE PROJECT. THE CLAIM OF DEPRECATION WAS ALLOWED BY THE AO WHILE PA SSING THE ASSESSMENT ORDER4 U/S 143(3). THE APPELLANT HAS FILED APPEAL AGAINST THE ABOVE ORDER U/S 143(3) DATED 13/2/2015 FOR VARIOUS OTHER ADDITIONS MADE BY THE AO AND ALSO RAISED GROUND OF ALLOWING AMORTIZATION OF BRIDGE EXPENSES IN VIEW OF CIRCULAR NO.9/14 DATED 28/4/2014. THE ABOVE CLAIM WAS REJECTED BY TH E UNDERSIGNED VIDE ORDER DATED 7/8/2015 ON THE GROUND THAT SAME IS NOT EMANA TING FROM ASSESSMENT ORDER. SUBSEQUENTLY, APPELLANT VIDE APPLICATION DATED 14/9 /2015 U/S 154 OF THE ACT REQUESTED THE AO TO ALLOW AMORTIZATION OF BRIDGE EX PENSES IN VIEW OF CBDT'S CIRCULAR AND SAME IS NOT SUPPORTED BY CA CERTIFICAT E AND CLAIM IS ALREADY REJECTED BY CIT(A) IN QUANTUM PROCEEDINGS. ON CAREFUL CONSIDERATION OF ENTIRE FACTS, IT IS OBS ERVED THAT CBDT CIRCULAR IS BINDING ON AO AND AO IS BOUND TO ALLOW CLAIM AS PER SUCH CIRCULAR. IT IS OBSERVED THAT CLAIM OF AMORTIZATION WAS NOT REJECTE D BY THE UNDERSIGNED ON MERITS. IT IS ALSO OBSERVED THAT CBDT CIRCULAR NOWHERE PROV IDES THAT AMORTIZATION OF COST OF PROJECT NEED BE ALLOWED ON THE BASIS OF CA CERTI FICATE. IT IS PERTINENT TO NOTE THAT AO WHILE GIVING EFFECT TO APPEAL ORDER OF AY 2 011-12 HAS ALREADY ALLOWED AMORTIZATION OF RS.90,39,827/- VIDE ORDER DATED 23/ 07/2014 BASED UPON EXPENDITURE ALREADY INCURRED UPTO AY 2011-12. EVEN AO HAS PARTICULARLY ALLOWED SUCH AMORTIZATION WHILE PASSING THE ASSESSMENT ORDE R U/S 143(3) FOR AY 2013-14, HENCE, AO CANNOT REJECT SUCH CLAIM ON THE GROUND TH AT SAME IS NOT SUPPORTED BY CA'S CERTIFICATE. - 5 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 SO FAR AS QUANTUM OF AMORTIZATION IS CONCERNED, APP ELLANT HAS CLAIMED DEDUCTION OF RS.1,92,64,309/- AS UNDER: 1. EXPENDITURE INCURRED UPTO AY LL- 123IS NOT ALLOWED AS DEDUCTION (NET OF DEPRECATION) A 7,23,18,615 2. AMORTIZATION' OF SUCH EXPENDITURE UPTO AGREEMENT 8 YEARS 3. ALLOWABLE AMORTIZATION [A/B] IN AY 11-12 (D) 90,39,827 4. BALANCE EXPENSES[A-D] (E) 6,43,50,162 5. ADDITIONAL EXPENSES INCURRED IN AY 12-13 (F) 7,05,00,000 6. TOTAL EXPENSES G=E + F 13,48,80,162 7. CLAIM OF AMORTIZATION [G/7] 1,92,64,309 IT IS OBSERVED THAT UPTO AY 2011-12, BRIDGE COST NE T OF DEPRECIATION IS RS.7,33,89,929/- AND BALANCE PERIOD OF AGREEMENT IS 8 YEARS HENCE AO IS DIRECTED TO ALLOW AMORTIZATION COST. FOR SUCH EXPENSES AT RS .90,39,027/- AS ALLOWED WHILE GIVING EFFECT TO APPEAL ORDER OF AY 2012-13. SO FAR AS ADDITIONAL COST OF RS.7,05,00,000/- INCUR RED IN AY 2012-13, IT IS OBSERVED THAT APPELLANT HAS EXCLUDED RS.7,05,00,000 /- FROM COST OF BRIDGE AGAINST GUARANTEE OF RANJIT CONSTRUCTION CO., TO COMPENSATE IN CERTAIN CONTINGENT EVENT AND NOW AS PER AGREEMENT DATED 13/11/2011, GUARANTE E IS REVOKED HENCE IT WAS CLAIMED AS COST AND AMORTIZATION, WAS CLAIMED. IT I S PERTINENT TO NOTE THAT IN RETURN OF INCOME, AS APPELLANT WAS CLAIMING DEPRECI ATION, IT HAS CONSIDERED RS.7,05,00,000/- AS COST AND AFTER NOTIONALLY COMPU TING DEPRECIATION FROM AY 2003-04 TO 2011-12, REVISED WDV WAS CONSIDERED AT R S.2,88,30,547/- AND ON THE SAME DEPRECIATION WAS CLAIMED. THIS CLAIM WAS ALLOW ED BY THE AO, HENCE, HE HAD ACCEPTED COST OF RS.7.05 CRORE TOWARDS BRIDGE CONST RUCTION. NOW, WHEN APPELLANT IS ENTITLED TO AMORTIZATION AND DEPRECIATION THEREO F IS ACTUALLY NOT ALLOWED TO IF, IT IS ENTITLED TO AMORTIZATION FOR 7 YEARS AS PER CBDT CIRCULAR. THIS CLAIM OF APPELLANT IS FOUND TO BE CORRECT AND SAME IS SUPPOR TED BY COPY OF MOD .DATED 31/12/2001 AND AGREEMENT DATED 13/11/2011 FILED WIT H AO ON 02/01/2005 DURING ASSESSMENT PROCEEDINGS. THUS, APPELLANT IS ENTITLED TO AMORTIZATION OF RS.1,00,71,428/- ON SUCH EXPENDITURE. THUS AGGREGAT E AMORTIZATION ALLOWABLE AS PER CBDT CIRCULAR IS RS.1,91,11,255/- AS AGAINST CL AIM OF APPELLANT FOR RS.1,92,64,309/-. THE AO WHILE GIVING EFFECT TO THI S ORDER WILL WITHDRAW DEPRECIATION ON BRIDGES CONSTRUCTION ALREADY ALLOWE D IN ASSESSMENT ORDER. - 6 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 SUBJECT TO ABOVE DIRECTION, THE GROUNDS OF APPEAL A RE ALLOWED. IN FACT DURING THE ASSESSMENT PROCEEDING A.Y. 2011- 12, THE ASSESSEE FILED THE DETAILS OF DEPRECIATION CLAIMED ON BOT PROJECT COST FOR THE A.Y. 2010-11 AND ON THE BASIS OF SUCH FACTS THE AMORTIZATION EXPENSES WAS A LLOWED AT RS.90,39,827/- FOR A.Y. 2011-12. IN THIS CASE, IT APPEARS THAT TAKING INTO CONSIDERA TION THE CBDT CIRCULAR AS DISCUSSED ABOVE AGAINST THE CLAIM OF THE APPELLANT FOR AMORTIZATION, THE LEARNED CIT(A) HAD GIVEN A REASONED ORDER AS TO WHY THE APPELLANT IS ENTITLED TO AMORTIZATION FOR SEVEN YEARS WHICH IS FURTHER SUPPORTED BY THE MOU DATED 3 1.12.2001 AND ALSO THE AGREEMENT DATED 13.11.2011. WE FIND NO INFIRMITY IN SUCH ORDE R, HENCE THE SAME IS UPHELD. THE REVENUES APPEAL THUS DEVOID ON MERIT IS DISMISSED. ITA NO.1833/AHD/2016 FOR A.Y. 2013-14: 5. IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE O RDER PASSED BY THE LEARNED CIT(A) IN ALLOWING DEDUCTION OF RS.3,51,14,918/- CLAIMED U /S 80IA(4)(I) OF THE ACT AND IN ALLOWING AMORTIZATION EXPENSES OF RS.1,91,11,255/- AS AGAINST DISALLOWANCE MADE BY THE AO OF RS.1,00,71,428/-. AT THE VERY OUTSET OF THE P ROCEEDING THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE RELATING TO THE DEDUCTION U/S 80IA(4) IS COVERED BY THE JUDGMENT PASSED BY THE CO -ORDINATE BENCH IN ITA NO.2296, 2304 & 2305/AHD/2014 FOR A.Y. 2009-10, 2010-11 & 20 11-12 RESPECTIVELY IN ASSESSEES OWN CASE. HE THEREFORE PRAYED FOR THE SAME RELIEF. A COPY OF THE SAID ORDER DATED 27.10.2017 PASSED BY THE HONBLE TRIBUNAL HAS ALREA DY BEEN HANDED OVER TO US BY THE LEARNED AR. HOWEVER, THE LEARNED DR FAILED TO CONTR OVERT THE CONTENTIONS MADE BY THE LEARNED AR IN THIS RESPECT. - 7 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 6. WE HAVE HEARD THE RESPECTIVE PARTIES AND PERUSED AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IT APPEARS BY AND UN DER AN ORDER DATED 27.10.2017, THE LEARNED TRIBUNAL DISPOSED OF THE APPEAL PREFERRED B Y THE REVENUE IN FAVOUR OF THE ASSESSEE WITH THE FOLLOWING OBSERVATION: 9. LEARNED AR CITED AN ORDER OF ITAT BENCH (PUNE) [2016] 69 TAXMANN.COM 78 (PUNE-TRIB), IN THE CASE OF KIRLOSKAR BROTHERS LTD. VS. DCIT. IN THIS CASE, IT WAS ALSO CONTENDED BY THE REVENUE IS THAT THE ASSESSEE DOES NOT FULFIL THE CONDITION PRESCRIBED IN SUB-CLAUSE (B) OF CLAUSE (I) TO SUB-S ECTION (4) OF SECTION 80IA OF THE ACT. IN TERMS OF THE SAID OBJECTION, THE REVENUE CO NTENDS THAT ASSESSEE HAS ENTERED INTO A WORKS CONTRACT AGREEMENT WITH SSNNL WHICH IS NOT AN ENTITY SPECIFIED IN SUB-CLAUSE (B) OF SECTION 80IA(4)(I) OF THE ACT. AC CORDING TO THE REVENUE, SSNNL IS NOT A CENTRAL GOVERNMENT OR STATE GOVERNMENT OR A LOCAL AUTHORITY OR ANY OTHER STATUTORY BODY, SO AS TO BE CONSIDERED AS AN ENTITY SPECIFIED IN SUB-CLAUSE(B) OF SECTION 80IA(4)(I) OF THE ACT. AS PER THE REVENU E, SSNNL IS A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND DOES N OT FALL WITHIN THE PRESCRIPTION OF SUB-CLAUSE (B) OF SECTION 80IA(4)(I ) OF THE ACT. AS PER THE REVENUE, THOUGH THE ENTIRE SHARE CAPITAL IN THE SAID COMPANY IS OWNED EITHER BY THE CENTRAL OR THE STATE GOVERNMENT, YET IT CAN ONLY BE CALLED A 'GOVERNMENT COMPANY' BUT IT DOES NOT COME WITHIN THE PURVIEW OF THE ENTITIES SP ECIFIED IN SUB-CLAUSE (B) OF CLAUSE (I) OF SECTION 80IA(4) OF THE ACT. IN THIS MATTER, THE LEARNED COUNSEL FOR THE ASSESSE E HAS VEHEMENTLY REITERATED THE POSITION OF THE ASSESSEE TAKEN BEFOR E THE LOWER AUTHORITIES TO THE EFFECT THAT THE CONTRACT WITH SSNNL FULFILLS THE CO NDITION PRESCRIBED IN SECTION 80IA(4)(I)(B) OF THE ACT. THE ARGUMENTS OF THE ASSE SSEE WERE TWO-FOLD. FIRSTLY, IT HAS REFERRED TO THE JUDGEMENTS OF THE HON'BLE SUPRE ME COURT IN THE CASE OF (I) SOM PRAKASH REKHI VS. UNION OF INDIA & AIR 1981 SC 212; AND, (II) PRADEEP KUMAR BISWAS & ORS. VS. INDIAN INSTITUTE OF CHEMICAL [APP EAL (CIVIL NO.992 OF 2002, DATED 06/04/2002], IN THIS JUDGEMENTS, IT IS CANVAS SED THAT AN ENTITY, LIKE SSNNL, IS LIABLE TO BE CONSIDERED AS AN INSTRUMENTALITY OR AN AGENCY OF THE GOVERNMENT, AND THUS, IT QUALIFIES TO AN ENTITY SPECIFIED IN SE CTION 80IA(4)(I) OF THE ACT. SECONDLY, IT IS SOUGHT TO BE MADE OUT THAT HAVING R EGARD TO THE BACKGROUND AND PECULIAR FEATURES OF SSNNL, THE SAID CONCERN IS EXE CUTING GOVERNMENTAL FUNCTIONS AND IS NOT ENGAGED IN ANY COMMERCIAL ACTIVITIES. ALL KINDS OF INFRASTRUCTURE FACILITIES REFERRED IN SECTION 80IA(4)(I) OF THE ACT, LIKE RAILWAYS, PORTS, DAMS, BRIDGES, ROADS, ETC. AR E ALWAYS OWNED BY THE GOVERNMENT AND CANNOT BE OWNED BY PRIVATE OWNERS. S O HOWEVER, FOR AN EFFICIENT EXECUTION AND HANDLING OF SUCH INFRASTRUCTURE FACIL ITIES, THE GOVERNMENTS FORM A - 8 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 SPECIAL PURPOSE VEHICLE (SPV) IN THE FORM OF SEPARA TE ENTITY REGISTERED UNDER THE COMPANIES ACT, 1956. IT WAS, THEREFORE, CONTENDED T HAT EVEN IF SUCH LIKE ENTITIES ARE INCORPORATED UNDER THE PROVISIONS OF THE COMPAN IES ACT, 1956 STILL HAVING REGARD TO THE FUNCTIONS PERFORMED, THEY HAVE TO BE CONSIDERED AS MERE EXTENSIONS OF THE GOVERNMENT. HON'BLE SUPREME COURT IN THE CASE OF SOM PRAKASH RE KHI (SUPRA) AND PRADEEP KUMAR BISWAS & ORS. (SUPRA) ARE FULFILLED A ND SSNNL IS LIABLE TO BE CONSIDERED AS A 'STATUTORY BODY' FALLING WITHIN THE MEANING OF SECTION 80IA(4)(I(B) OF THE ACT. 10. SIMILARLY IN THIS CASE, THE ENTIRE PROJECT WAS CLEARLY NOT ONLY EXECUTED IN AGREEMENT WITH GSRDC BUT THE GUJARAT GOVERNMENT DIR ECTLY WAS INVOLVED IN THE AGREEMENTS FOR THE PROJECT. 11. IN OUR CONSIDERED OPINION, ASSESSEE HAS DEVELOP ED, OPERATED AND WAS TO TRANSFER THE PROJECT IN AGREEMENT WITH THE CONSTITU TIONAL BODY I.E. AN AGENCY AS DEFINED UNDER SECTION 2(E) OF THE GUJARAT INFRASTRU CTURE DEVELOPMENT ACT, 1999 UNDER THE GUJARAT GOVERNMENT ACT AND ALSO IN DIRECT AND EXPLICIT AGREEMENT AND APPROVAL OF GUJARAT GOVERNMENT WHICH HAS GIVEN LAND AND ALLOWED TO COLLECT TOLL FEE. ASSESSEE COMPANY FULFILLS THE CONDITIONS AS REQUIRE D UNDER SECTION 80IA(4) INCLUDING SECTION 80IA(4)(I)(B) AND HAS DEVELOPED, OPERATED AND WAS TO TRANSFER THE INFRASTRUCTURE FACILITY AND THEREFORE, IS ELIGIBLE FOR THE DEDUCTION CLAIMED UNDER THE SECTION. 12. WITH THE ABOVE OBSERVATION, WE ARE OF THE CONSI DERED OPINION THAT GSRDC IS AN EXTENDED ARMS OF THE GUJARAT STATE AND IS ENTITL E TO ELIGIBLE FOR DEDUCTION. THEREFORE, WE DISMISS ALL THREE APPEALS IN ITA NOS. 2296, 2304 & 2305/AHD/2014 FOR ASST. YEARS 2009-10, 2010-11 & 2011-12 RESPECTI VELY. RESPECTFULLY RELYING UPON THE SAID JUDGMENT, WE DEC IDE THE MATTER IN FAVOUR OF THE ASSESSEE HAVING NO INFIRMITY FOUND IN THE ORDER PAS SED BY THE LEARNED CIT(A) AS IMPUGNED BEFORE US. THUS GROUND OF APPEAL PREFERRED BY REVENUE IS DISMISSED. - 9 - ITA NOS.1832 & 1833/AHD/2016 DCIT VS. RANJIT PROJECTS PVT. LTD. ASST.YEAR 2012-13 & 2013-14 THE ISSUE RELATES TO ALLOWING AMORTIZATION BY THE L EARNED CIT(A) HAS ALREADY BEEN DEALT WITH BY US HEREINABOVE IN ITA NO.1832/AHD/201 6 FOR A.Y. 2012-13 AND IN THE ABSENCE OF ANY CHANGE OF CIRCUMSTANCES THE SAME SHA LL APPLY MODUS OPERANDI. HENCE, THIS APPEAL OF REVENUE IS ALSO DISMISSED. 7. IN THE RESULT, BOTH THE REVENUES APPEALS ARE DI SMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 04/04/2019 SD/- SD/- ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 04/04/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD