Income-tax Officer, V. M/s. Rajdeep Infrastructure, Ahmednagar

ITA 1985/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1023 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1985/PN/2013 $& ' !(' / ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER, WARD 2, AHMEDNAGAR ....... / APPELLANT )& / V/S. M/S. RAJDEEP INFRASTRUCTURE, RAJDEEP HOUSE, SAVEDI, AHMEDNAGAR PAN : AAHFR2945Q / RESPONDENT ASSESSEE BY : SHRI AJIT ATHAWDE (FILED WRITTEN SUBMISSION) REVENUE BY : SHRI RAJESH DAMOR / DATE OF HEARING : 19-08-2015 / DATE OF PRONOUNCEMENT : 14-10-2015 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-IT/TP, PUNE DATED 28 -08-2013 FOR THE ASSESSMENT YEAR 2010-11. 2. IN APPEAL, THE REVENUE HAS ASSAILED THE FINDINGS OF CO MMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF RS.61,77,832 /- BY 2 ITA NO. 1985/PN/2013, A.Y. 2010-11 ALLOWING THE CLAIM OF DEDUCTION U/S. 80IA(4) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) OF THE ASSESSEE. THE ONLY ISSUE RAISED IN THE APPEAL IS; WHETHER ERECTION OF FOOT OVER BRIDGES AND INSTALLATION OF ROAD SIGNAGE CAN BE CONSTRUED AS INFRASTRUCTURE FACILITY WITHIN THE MEANING OF EXPLAN ATION TO SECTION 80IA(4) OF THE ACT? 3. THE BRIEF FACTS OF THE CASE ARE : THE ASSESSEE IS ENGA GED IN THE BUSINESS OF DEVELOPING, MAINTAINING AND OPERATING INFRASTRUCTU RE FACILITY ON BOT BASIS FOR INDORE MUNICIPAL CORPORATION. THE ASSESSEE HAD CONSTRUCTED FOOT OVER BRIDGES AND ROAD SIGNAGE FOR INDORE MUNICIPAL CORPORATION. THE ASSESSEE CLAIMED DEDUCTION U/S . 80IA(4) IN RESPECT OF THE AFORESAID WORK EXECUTED BY THE ASSESSEE . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HELD THAT THE ERECTION OF FOOT OVER BRIDGES AND INSTALLATION OF R OAD SIGNAGE DOES NOT AMOUNT TO CREATION OF INFRASTRUCTURE FACILITY WITHIN THE MEANING OF SECTION 80IA(4). THE SAID ACTIVITIES ARE IN THE NA TURE OF ERECTING SUPER STRUCTURE. THE ASSESSING OFFICER DENIED TH E BENEFIT OF DEDUCTION U/S. 80IA(4) TO THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 31-01-2013, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPU GNED ORDER ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND HE LD, THAT THE ROAD SIGNAGE ARE INTEGRAL PART OF THE ROAD WITHOUT WHICH THE R OAD CANNOT BE USED EFFECTIVELY. AS FAR AS FOOT OVER BRIDGES IS CONCERN ED, THE WORD USED IN SECTION 80IA(4) IS BRIDGE. THERE IS NO FURTHER CLASSIFICAT ION OF BRIDGE SUCH AS; OVER BRIDGE, UNDER BRIDGE, FOOT OVER BRIDGE ETC. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER DRAWS SUPPOR T FROM THE 3 ITA NO. 1985/PN/2013, A.Y. 2010-11 CBDT CIRCULAR NO. 10 DATED 24-01-2005 AND ALLOWED THE AP PEAL OF THE ASSESSEE. AGAINST THE FINDINGS OF THE COMMISSIONER OF INCOM E TAX (APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. SHRI RAJESH DAMOR REPRESENTING THE DEPARTMENT SUBM ITTED, THAT AN IDENTICAL ISSUE HAS BEEN ADJUDICATED BY THE CO-ORDINAT E BENCH OF THE TRIBUNAL IN THE CASE OF ASSESSEES SISTER CONCERN T ITLED, RAJDEEP PUBLICITY PVT. LTD. VS. DY. CIT/ACIT IN ITA NOS.1782 & 1783 /PN/2007 AND 1414/PN/2008 FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06 DECIDED ON 04-06-2010. THE TRIBUNAL AFTER CONSIDERING SIMILA R SUBMISSIONS OF THE ASSESSEE, AS WELL AS CBDT CIRCULAR NO. 10 OF 2005 HAS DECIDED THE ISSUE IN FAVOUR OF THE REVENUE. THE LD. D R PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER IN VIEW OF THE ORDER OF T HE TRIBUNAL. THE LD. DR FURTHER SUBMITTED THAT THE COMMISSIONER OF INCO ME TAX (APPEALS) WHILE DECIDING THE APPEAL OF THE ASSESSEE HAS NOT CONSIDERED THE ORDER OF TRIBUNAL IN THE CASE OF RAJDEEP PUBLICITY PVT. LTD. VS. DY. CIT/ACIT (SUPRA). 5. SHRI AJIT ATHAWDE APPEARING ON BEHALF OF THE ASSESSEE HAS FILED WRITTEN SUBMISSION AND PRAYED FOR SUSTAINING THE IMPUGNED ORDER. THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE ARE AS UNDER: 1) (I) THE FIRM IS ENGAGED IN THE BUSINESS OF DEVELOPING, MAINTAINING AND OPERATING AN INFRASTRUCTURE FACILITY ON BOT BAS IS FOR INDORE MUNICIPAL CORPORATION. UNDER THIS, THE FIRM HAS CON STRUCTED FOOT- OVER BRIDGES AND ROAD SIGNAGES IN THE IMC AREA. IN THE EXPLANATION TO SECTION 80IA (4), A BRIDGE AND A ROA D IS INCLUDED IN THE DEFINITION OF INFRASTRUCTURE FACILITY. THE FOOT -OVER BRIDGES CONSTRUCTED BY THE FIRM ARE COVERED UNDER THE EXPRE SSION BRIDGE. THE ROAD SIGNAGES CONSTRUCTED BY THE FIRM ARE COVER ED UNDER THE EXPRESSION ROAD. AS SUCH, THE FACILITY CONSTRUCTED BY THE FIRM IS AN INFRASTRUCTURE FACILITY AS DEFINED IN SECTION 80IA( 4) AND THEREFORE, IT IS ELIGIBLE FOR DEDUCTION U/S 80IA. (II) IN THE ASSESSMENT U/S 143(3) THE LD. AO DISALL OWED THE DEDUCTION U/S 80IA ON THE BASIS OF AN INCORRECT INT ERPRETATION OF THE TERM INFRASTRUCTURE FACILITY. THE LD AO IN HIS ASSESSMENT ORDER STATED THAT'.... MAKING OF ROAD AND THEN AFTERWARDS PROVIDING FOR 4 ITA NO. 1985/PN/2013, A.Y. 2010-11 ROAD SIGNAGES CANNOT STAND ON THE SAME FOOTING. THE LATER ITEMS FALL IN THE CATEGORY OF FACILITY AND NOT BASIC INFR ASTRUCTURE. THE WORD INFRASTRUCTURE IMPLIES CREATION OF FUNDAMENTAL FACILITIES FOR COMMUNICATION, TRANSPORT ETC.' (III) WE FILED AN APPEAL WITH THE LD. CIT(A)-IT/TP ,PUNE AND SUBMITTED BEFORE HIM THAT THE WORDS 'MAKING' AND 'P ROVIDING' AS USED BY THE LD. AO ARE NOT USED IN THE STATUTE I.E. IN SECTION 80IA (4). THE WORDS USED ARE DEVELOPING, OPERATING & MAI NTAINING ANY INFRASTRUCTURE FACILITY. THE WORD 'DEVELOPING' HAS A MUCH WIDER CONNOTATION AND IT INCLUDES WITHIN ITS AMBIT ALL TH E MANDATORY COMPONENTS OF AN INFRASTRUCTURE FACILITY. (IV) WE FURTHER STATED THAT LD. AO HAS ERRED IN MAK ING A DISTINCTION BETWEEN 'FACILITY' AND 'BASIC INFRASTRU CTURE'. NO SUCH DISTINCTION HAS EITHER BEEN MADE IN THE SECTION NOR IS IT INTENDED. THE TERM USED IN THE STATUTE IS INFRASTRUCTURE FAC ILITY' WHICH COMPREHENSIVELY COVERS INFRASTRUCTURE FACILITY AND ALL ITS COMPONENTS. (V) WE ALSO SUBMITTED THAT THE LD. AO HAS STATED TH AT THE WORD INFRASTRUCTURE IMPLIES CREATION OF FUNDAMENTAL FACI LITIES FOR COMMUNICATION, TRANSPORT ETC. WE PLEADED BEFORE THE LD. CIT(A) THAT, THE ROAD SERVES EXACTLY THIS PURPOSE OF COMMU NICATING TO THE USERS OF THE ROAD AS TO THE DIRECTIONS OF THEIR INT ENDED DESTINATIONS AND WHICH THEREFORE, EFFECTUATES SMOOTH TRANSPORTAT ION OF VEHICLES ON THE ROAD THEREBY AVOIDING CHAOTIC TRAFFIC SITUAT IONS AND CONGESTIONS AND THAT IN FACT, IN THE PARA 7 OF HIS ASSESSMENT ORDER THE LD. AO HAS ADMITTEDLY STATED THAT THE ACTIVITY OF THE ASSESSEE IS HELPFUL IN GUIDING TRAFFIC AND COMMUNICATING TO R EACH DESTINATIONS AND THAT IN OUR HUMBLE OPINION, THE LD . AO HAS TAKEN SELF CONTRADICTING STANDS IN HIS ASSESSMENT ORDER W HILE MAKING THE DISALLOWANCE. 2. IN THIS REGARD, WE WOULD LIKE TO REITERATE THE F URTHER ELABORATIONS AS UNDER: - (I) THE ROAD SIGNAGES CONSTRUCTED BY THE FIRM INCLU DE THE VARIOUS DIRECTION BOARDS, CAUTIONARY SIGNS, MANDATORY SIGNS , INFORMATORY SIGNS, ETC. THESE ARE ALSO REFERRED TO AS ROAD APPU RTENANCES. (II) THESE ROAD SIGNAGES FORM A MANDATORY PART OF A NY ROAD. AS PER THE MINISTRY OF SURFACE TRANSPORT (ROADS WING), GOVT OF INDIA, THE TECHNICAL SPECIFICATION OF ANY ROAD INCLUDE THE ROAD SIGNAGES. THE RULES AND REGULATIONS GOVERNING THE CONSTRUCTIO N OF ROAD IS CONTAINED IN THE BOOK 'SPECIFICATIONS OF ROAD AND B RIDGE WORKS.' IN THIS, SECTION 800 'TRAFFIC SIGNS, MARKINGS AND O THER ROAD APPURTENANCES' CONTAINS THE TECHNICAL SPECIFICATION S OF ROAD SIGNAGES. IT MAY BE PERTINENT TO NOTE THAT THE ONE OF THE TENDER CONDITIONS OF IMC STIPULATED THAT THE SIGNAGES MUST CONFORM WITH STANDARDS PRESCRIBED BY MINISTRY OF SURFACE TRANSPO RT IN SECTION 800. IN FACT, THE SAID SECTION 800 WAS APPENDED TO THE TENDER DOCUMENT AS APPENDIX I. (III) FROM THE ABOVE, IT IS VERY MUCH CLEAR THAT RO AD SIGNAGES FORM A MANDATORY PART AND PARCEL OF A ROAD. HOW CAN THE EXPRESSION 5 ITA NO. 1985/PN/2013, A.Y. 2010-11 'ROAD SIGNAGES' BE TREATED AS SOMETHING NOT FORMING PART OF OR NOT RELATED TO THE EXPRESSION 'ROAD'. A ROAD IS A FACIL ITY FOR PLYING OF VEHICLES, THEIR SMOOTH TRAFFIC, ETC. THIS FACILITY CANNOT BECOME WORTHY OF USE WITHOUT THE ROAD SIGNAGES. CAN A SITU ATION BE IMAGINED THAT ROAD SIGNAGES ARE CONSTRUCTED WITHOUT THERE BEING A ROAD. IT IS IMPOSSIBLE. IF THERE IS A ROAD THERE HA VE TO BE SIGNAGES AND IF THERE ARE SIGNAGES THERE HAS TO BE A ROAD. T HE SIGNAGES ARE FORMING AN INTEGRAL AND INSEPARABLE PART OF THE ROA D. THEREFORE, THE SIGNAGES ARE COVERED UNDER THE EXPRESSION ROAD. (IV) FOR A PROJECT TO BE TREATED / NOTIFIED AS INFR ASTRUCTURE FACILITY, IT IS NOT NECESSARY THAT A NEW ROAD HAS TO BE CONSTRUC TED. IN FACT, THE NOTIFICATIONS ISSUED BY CBDT IN MANY CASES DESC RIBE THE PROJECT AS 'IMPROVEMENT', 'STRENGTHENING', 'REHABIL ITATION', ETC. OF PARTICULAR ROAD. FROM THIS DESCRIPTION IT IS VERY M UCH EVIDENT THAT NO NEW ROAD IS CONSTRUCTED BUT ONLY THE WORK OF IMP ROVEMENT, ETC. IS CARRIED OUT. IT WOULD BE A FALLACY TO PRESUME TH AT THE SCOPE OF THE WORDS IMPROVEMENT, ETC. RELATE ONLY TO THE SURF ACE OF THE ROAD. IN FACT, MAKING SUCH A RESTRICTIVE INTERPRETATION W OULD ALSO NOT BE JUSTIFIABLE. THE CIRCULAR NO. 4/2010 DT. 18.05.2010 REGARDING CONSTRUCTION OF ADDITIONAL LANES IS NOT APPLICABLE IN OUR CASE BECAUSE IT RELATES TO SURFACE OF THE ROAD WHICH IS ONLY ONE COMPONENT. OUR CASE PERTAINS TO ANOTHER VITAL AND M ANDATORY COMPONENT IN THE 'DEVELOPMENT' OF THE OVERALL INFRA STRUCTURE FACILITY OF 'ROAD' I.E. ROAD SIGNAGES. A ROAD CONTA INS OF MANY COMPONENTS AND SURFACE IS ONLY ONE OF THEM. THE OTH ER COMPONENTS INCLUDE ROAD DIVIDERS, PAVEMENTS, C.D. W ORKS, TUNNELS, PROTECTIVE WORKS, EMBANKMENTS, ETC. AMONG THESE, ROAD SIGNAGES IS THE MOST IMPORTANT AND CRUCIAL COMPONEN T OF THE ROAD. THIS IS THE ONLY COMPONENT WHICH IS VISIBLE TO THE USERS OF THE ROAD AND IS MEANT FOR THEIR VIEWING. IN THEIR ABSENCE, T HE VERY BASIC PURPOSE OF THE ROAD I.E. SMOOTH PASSAGE OF TRAFFIC WILL NOT BE ACHIEVED. THEREFORE, THE SCOPE OF THE WORDS IMPROVE MENT, ETC. HAVE TO INCLUDE WITHIN THEIR AMBIT THE OTHER IMPORT ANT COMPONENT I.E. ROAD SIGNAGES. A ROAD CAN BE IMPROVED, STRENGT HENED IN MANY WAYS. A ROAD WHOSE SURFACE HAS DETERIORATED CAN BE IMPROVED, ADDITIONAL LANES CAN BE CONSTRUCTED, ETC. A ROAD WH OSE SIGNAGES HAVE DETERIORATED CAN BE 'DEVELOPED'. IF THE FORMER GETS NOTIFIED AS AN INFRASTRUCTURE FACILITY, IT IS OUR CONTENTION TH AT THE LATTER IS ALSO AN INFRASTRUCTURE FACILITY AND IS ELIGIBLE FOR THE DEDUCTION U/S 80IA. (V) THE TERM USED IN THE SECTION 80-IA(4) IS 'DEVEL OP' AND NOT 'CONSTRUCT'. IN SUPPORT OF OUR CONTENTION, WE HAVE QUOTED BELOW THE EXAMPLES OF ROAD DIVIDERS, PORTS AND BULK HANDL ING TERMINALS. IN ALL THESE EXAMPLES, THERE IS NO NEW C ONSTRUCTION AND ONLY THE EXISTING FACILITIES HAVE BEEN DEVELOPED AN D THEY HAVE BEEN GRANTED THE BENEFIT OF DEDUCTION U/S 80-IA(4). WE WOULD LIKE TO FURTHER ELABORATE ON THIS. THE DICTIONARY MEANING OF THE TERM 'DEVELOP' IS AS FOLLOWS: TO BRING OUT THE CAPABILITIES OR POSSIBILITIES OF; BRING TO A MORE ADVANCED OR EFFECTIVE STATE; TO CAUSE TO GROW OR EXPAND; TO ELABORATE OR EXPAND IN DETAIL 6 ITA NO. 1985/PN/2013, A.Y. 2010-11 (SOURCE: DICTIONARY.COM) TO EXPAND OR ENLARGE; TO AID IN THE GROWTH OF; STRENGTHEN; TO IMPROVE THE QUALITY OF; REFINE; ADD DETAIL AND FULLNESS TO; TO MAKE AVAILABLE AND EFFECTIVE TO FULFILL A PARTIC ULAR END OR NEED; (SOURCE : AMERICAN HERITAGE DICTIONARY) IN THE BOTH THE ABOVE SETS OF DEFINITIONS, ONE THIN G IS CRYSTAL CLEAR THAT THERE IS AN IMPROVEMENT TO SOMETHING WHICH IS IN EXISTENCE. THE APPELLANT HAS DEVELOPED AN INFRASTRUCTURE FACIL ITY VIZ. FOOT- OVER BRIDGES AND ROAD SIGNAGES I.E. A ROAD. BY THE DEVELOPMENT OF THESE FACILITIES, THE CAPABILITY OF A ROAD IS IN CREASED, IT BECOMES MORE ADVANCED AND IS BROUGHT TO AN EFFECTIVE STATE. THE ROAD IS MORE STRENGTHENED AND IMPROVED AND COMES TO A STATE WHERE IT CAN FULFILL THE PARTICULAR NEED OR END. A ROAD CANN OT BECOME WORTHY OF USE OR A FACILITY IT IS INTENDED TO BE WI THOUT THE ROAD SIGNAGES WHICH ARE A MANDATORY AND INTEGRAL PART OF IT. THE TERM 'DEVELOP' HAS BEEN PUT INTO THE SECTION WI TH A DELIBERATE INTENTION. THE LEGISLATURE ALWAYS INTENDED TO GIVE INCENTIVE TO THE DEVELOPMENT OF AN INFRASTRUCTURE FACILITY. TO CONST RUE THE SAME AS BEING RESTRICTED TO SOME NEW CONSTRUCTION ONLY WOUL D NOT BE THE CORRECT INTERPRETATION. IN THIS CONNECTION, WE WOUL D LIKE TO DRAW YOUR ATTENTION TO THE PROVISIONS OF SECTION 80-IB W HICH GIVES INCENTIVES TO VARIOUS BUSINESSES. SECTION 80-IB(7A) GIVES INCENTIVE TO MULTIPLEX THEATRE AND THE WORDS USED ARE 'BUILDI NG, OWNING AND OPERATING'. SIMILARLY SUB SECTION (7B) GIVES INCENT IVE TO A CONVENTION CENTRE AND THE WORDS USED ARE AGAIN 'BUI LDING, OWNING AND OPERATING'. IT WOULD BE PERTINENT TO NOTE THAT THE WORD USED IS 'BUILDING' AND NOT 'DEVELOPING'. ALSO, IN SUB-SECTI ON (10) WHICH PROVIDES INCENTIVE TO SPECIFIC HOUSING PROJECTS THE WORDS USED ARE 'DEVELOPMENT AND CONSTRUCTION'. THE WORD USED IS AN D, WHICH MEANS CONSTRUCTION OF NEW HOUSING PROJECT IS NECESS ARY. IN ALL THESE CASES, THE TERMS USED ARE EITHER 'BUILD' OR ' CONSTRUCT'. THEREFORE, ONE MAY ARGUE THAT A NEW CONSTRUCTION IS NECESSARY FOR GETTING THE INCENTIVE. HOWEVER, IN SECTION 80-IA(4) , UNLIKE THE ABOVE, THE TERM USED IS 'DEVELOP'. THIS IS CLEAR IN DICATION THAT THE LEGISLATIVE INTENT IS SOMETHING DIFFERENT BEHIND SE CTION 80-IA(4) AND NOT THE SAME AS IN THE CASE CITED ABOVE. HAD IT BEEN THE SAME INTENTION AS IS IN THESE OTHER CASES AND HAD IT BEEN ENVISAGED THAT INCENTIVE IS TO BE GIVEN ONL Y TO NEWLY CONSTRUCTED ROADS, THE LEGISLATURE WOULD HAVE USED THE SAME TERMS OF 'BUILD' OR 'CONSTRUCT'. BUT THAT IS NOT THE CASE. THE TERM 'DEVELOP' USED B Y THE LEGISLATURE IS A CONSCIOUS AND DELIBERATE ACT. IT WAS NEVER INT ENDED THAT A NEW FACILITY IS TO BE CREATED. IT WAS ALWAYS INTEND ED THAT EVEN IF AN EXISTING INFRASTRUCTURE FACILITY IS DEVELOPED, I NCENTIVE HAS TO BE GIVEN. (VI) TO FURTHER SUBSTANTIATE OUR CLAIM, WE WOULD LI KE TO DRAW THE ATTENTION OF YOUR HONOURS TO THE FACT THAT VIDE NOT IFICATION NO. S.O. 254(E) DT. 14.03.2000, ROAD DIVIDERS HAVE BEEN NOTI FIED AS INFRASTRUCTURE FACILITY. THIS ALSO IS A CONSTRUCTIO N WHICH IS ABOVE 7 ITA NO. 1985/PN/2013, A.Y. 2010-11 THE ROAD AND IT DOES NOT REQUIRE CONSTRUCTION OF NE W ROAD. THESE CAN BE CONSTRUCTED ON ANY EXISTING ROAD. ROAD DIVID ERS ALSO FORM PART AND PARCEL OF THE ROAD. ONE DOES NOT CONSTRUCT ROAD DIVIDERS IF THERE IS NO ROAD. THE CASE OF ROAD SIGNAGES IS E XACTLY SIMILAR TO THIS AND THEREFORE IT IS AN INFRASTRUCTURE FACILITY . COPY OF THE NOTIFICATION IS AT PAGE NO 115 IN THE PAPER BOOK AL READY SUBMITTED. (VII) IN THE CASE OF FOOT-OVER BRIDGES, IT IS OUR C ONTENTION THAT THE MEANING OF THE EXPRESSION 'BRIDGE' IN SECTION 80IA (4) SHOULD NOT BE RESTRICTED TO COVER ONLY THOSE BRIDGES WHICH ARE TO BE USED BY VEHICLES. IT SHOULD ALSO COVER WITHIN ITS AMBIT A BR IDGE WHICH IS MEANT FOR THE USE OF PEDESTRIANS TO CROSS OVER A RO AD. A FOOT-OVER BRIDGE IS A BRIDGE FOR ALL INTENTS AND PURPOSES AND SHOULD BE TREATED AS INFRASTRUCTURE FACILITY. THE CBDT HAVE N OW ACCEPTED THE WIDER CONNOTATION OF THE TERM BRIDGE. IT IS EVI DENT FROM THE NOTIFICATION NO. 10 DT. 24.01.2005 ISSUED BY CBDT V IDE WHICH FOOT-OVER BRIDGES HAVE BEEN NOTIFIED AS INFRASTRUCT URE FACILITY. COPY OF THE NOTIFICATION IS AT PAGE NOS 117 TO 118 IN THE PAPER BOOK ALREADY SUBMITTED. (VIII) IN OUR CASE, THE PROJECT IS A COMPOSITE ONE WHICH INCLUDES THE FOOT-OVER BRIDGES AND ROAD SIGNAGES. THE PURPOSE BE HIND CONSTRUCTING THIS FACILITY IS THE SAME AND SO, IT C ANNOT BE BROKEN INTO TWO PARTS SAYING ONE PART IS INFRASTRUCTURE AN D THE OTHER IS NOT. THE INCENTIVE GRANTED BY THE LEGISLATURE IS TO A OVERALL FACILITY AND NOT TO A PART OF THE FACILITY. THEREFORE, IN OU R HUMBLE OPINION OUR TOTAL PROJECT OF FOOT-OVER BRIDGES AND ROAD SIG NAGES IS AN INFRASTRUCTURE FACILITY AND ENTITLED TO DEDUCTION U /S 80IA. DESCRIBING THE ROAD SIGNAGES AS SUPERSTRUCTURE AND NOT INFRASTRUCTURE WOULD BE INCORRECT. IN CASE OF FOOT- OVER BRIDGES, IT IS ALSO A SUPERSTRUCTURE AND HAS BEEN NOTIFIED AS AN I NFRASTRUCTURE. WHAT IS IMPORTANT TO NOTE IS THAT ROAD SIGNAGES FOR M AN INTEGRAL PART OF THE ROAD AND HAVE TO BE MANDATORILY CONSTRU CTED SO AS TO BRING ABOUT THE COMPLETENESS OF THE ROAD. THE ROAD SIGNAGES ARE MEANT FOR THE USERS OF THE ROAD AND THEREFORE, THEY HAVE TO BE CONSTRUCTED AT SUCH A HEIGHT SO THAT THEY CAN BE EA SILY VIEWED FROM A DISTANCE AND ALSO SO THAT THEY DO NOT HAMPER THE MOVEMENT OF HIGH VEHICLES. TO ACHIEVE THIS OBJECTIV E, THE HEIGHT, WIDTH, MATERIAL USED, ETC. HAVE TO BE AS PER THE TE CHNICAL SPECIFICATIONS. TO ACHIEVE THIS OBJECTIVE, THEY HAV E TO BE NECESSARILY CONSTRUCTED AS A SUPERSTRUCTURE I.E. AB OVE THE SURFACE OF THE ROAD. CAN A SITUATION BE IMAGINED WHERE ROAD SIGNAGES ARE CONSTRUCTED ON OR BELOW THE SURFACE OF THE ROAD. MOREOVER, THE ROAD SIGNAGES HAVE TO BE CONSTRUCTED ON VERY STRONG FOUNDATIONS DUE TO THEIR LARGE SPAN, HEAVY MATERIAL S, ETC. THEY ARE AN IMMOVABLE STRUCTURE PERMANENTLY EMBEDDED IN THE EARTH AND PERMANENTLY FASTENED TO THE ROAD. IT IS GOING T O REMAIN THERE AS LONG AS THE EXISTENCE OF THE ROAD. THEREFORE, JUST BECAUSE ROAD SIGNAGES ARE CONSTRUCT ED IN THE MANNER OF SUPERSTRUCTURE AND SO NOT TREATING THEM A S INFRASTRUCTURE WOULD BE A MISCONCEPTION. 8 ITA NO. 1985/PN/2013, A.Y. 2010-11 (IX) ANOTHER INFRASTRUCTURE FACILITY INCLUDED IN SE CTION 80IA(4) IS A 'PORT'. RECENTLY THE CBDT HAVE ISSUED CIRCULAR NO. 10/2005 DT. 16.12.2005 STATING THAT THE TERM PORT INCLUDES STRU CTURE AT THE PORTS FOR STORAGE, LOADING AND UNLOADING. COPY OF T HE CIRCULAR IS AT PAGE NO 119 IN THE PAPER BOOK ALREADY SUBMITTED. THE CONDITIONS ARE THAT THE PORT AUTHORITY SHOULD I SSUE A CERTIFICATE THAT THE SAID STRUCTURES FORM PART OF THE PORT AND THAT SUCH STRUCTURES SHOULD BE BUILT UNDER BOT/BOLT SCHEME AN D SHOULD BE TRANSFERRED TO THE CONCERNED AUTHORITY ON THE EX PIRY OF THE TIME STIPULATED IN THE AGREEMENT THIS IS ANOTHER EXAMPLE WHERE THE WIDER CONNOTATION OF A TERM HAS BEEN CONSIDERED TO DECIDE WHETHER IT IS INFRASTRUCTURE FACILITY OR NOT. THE S TRUCTURES FOR STORAGE, LOADING AND UNLOADING HAVE TO BE A PART OF A PORT WITHOUT WHICH A PORT WOULD BE INCOMPLETE. THE VARIOUS EMERG ING PRACTICAL SITUATIONS MAY NOT BE ENVISAGED BY A STATUTE, BUT T HE INTERPRETATION HAS TO BE SUCH THAT THERE SHOULD BE FURTHERANCE OF THE OBJECTIVE OF THE STATUTE AND NOT RESTRICT IT. T HE EXAMPLES OF FOOT- OVER BRIDGES AND PORT ARE EVIDENCE OF THAT. AS IN T HE CASE OF PORT, THE CONDITIONS ARE ALSO SATISFIED IN OUR CASE. THE ROAD SIGNAGES ARE PART OF THE ROAD AND ARE AN INFRASTRUCTURE FACI LITY. THE TOTAL FACILITY IS CONSTRUCTED ON BOT BASIS AND IS TO BE H ANDED OVER TO IMC AT THE END OF THE CONCESSION PERIOD. THEREFORE, ON THE SAME ANALOGY, ROAD SIGNAGES ARE ALSO AN INFRASTRUCTURE F ACILITY AND ELIGIBLE FOR DEDUCTION U/S 80IA. (X) IT IS WELL SETTLED PRINCIPLE OF LAW THAT A LIBE RAL INTERPRETATION SHOULD BE ADOPTED IN CASE OF INCENTIVE PROVISIONS. THE SPIRIT OF THE LAW RATHER THAN THE LETTER OF THE LAW SHOULD BE FOL LOWED AND TOO STRICT AN INTERPRETATION WOULD RESULT IN SEEING THE SKIN AND MISSING THE SOUL OF THE SECTION. WHEN A WIDER SCOPE IS ATTA CHED TO THE TERMS BRIDGE AND PORT, A SIMILAR APPROACH NEEDS TO BE ADOPTED IN CASE OF ROAD SIGNAGES ALSO. 3. (I) IN THE CASE OF OUR GROUP COMPANY RAJDEEP PUB LICITY PVT LTD., THE FACTS OF WHICH ARE SIMILAR TO THIS CASE, THE HON'BL E ITAT, PUNE HAD DISMISSED THE APPEALS , COPIES OF WHICH ARE AT PAGE NOS. 120 TO 125 IN THE PAPER BOOK ALREADY SUBMITTED EARLIER. TH E SAID COMPANY WENT IN APPEAL BEFORE THE HON'BLE BOMBAY HI GH COURT, AURANGABAD BENCH AND THE APPEAL HAS BEEN ADMITTED. THE COPY OF THE ORDER IS AT PAGE NOS. 131 TO 132 OF THE PAPE R BOOK. (II) THE SAID GROUP COMPANY HAD UNDER THE THEN EXIS TING SECTION 10(23G) OF I.T. ACT, 1961 HAD APPLIED TO THE CBDT F OR APPROVAL OF THE PROJECT AS AN INFRASTRUCTURE FACILITY. IN THIS REGARD, THE THEN LD. CIT-I , PUNE VIDE LETTER DT. 12.07.2002 AND THE THE N LD. CCIT, PUNE VIDE LETTER DT. 03.12.2002 HAD RECOMMENDED THE PROJ ECT FOR APPROVAL AS AN INFRASTRUCTURE FACILITY. THE COPIES OF THE LETTERS ARE AT PAGE NOS. 126 TO 130 OF THE PAPER BOOK. THE SAID SECTION 10(23G) WAS OMITTED BY FINANCE ACT, 2006 W.E.F 01.0 4.2007 AND HENCE, THE COMPANY HAD WITHDREW ITS APPLICATION. IN VIEW OF THE ABOVE, WE HUMBLY SUBMIT BEFORE YOUR HONOURS THAT ROAD SIGNAGES BEING PART OF A ROAD IS AN INFRASTRUC TURE FACILITY AND IS ELIGIBLE FOR DEDUCTION U/S. 80IA AND IT IS OUR P LEA THAT THE SAME MAY BE ALLOWED. 9 ITA NO. 1985/PN/2013, A.Y. 2010-11 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AND HAVE PERUSED THE WRITTEN SUBMISSION FILED ON BEHALF OF THE ASSESS EE. WE HAVE ALSO EXAMINED THE ORDERS OF AUTHORITIES BELOW AND HA VE CONSIDERED THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF RAJDEEP PUBLICITY PVT. LTD. VS. DY. CIT/ACIT (SUPRA). 7. WE FIND THAT THE ISSUE RAISED IN THE PRESENT APPEAL I.E. WHETHER THE ERECTION OF FOOT OVER BRIDGES AND INSTALLATION OF ROAD SIGNAGE FALL WITHIN THE DEFINITION OF INFRASTRUCTURE FACILITY AS ENVISAGED U/S . 80IA(4) OF THE ACT HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE CA SE OF ASSESSEES GROUP CONCERN M/S. RAJDEEP PUBLICITY PVT. LTD. THE RELEVA NT EXTRACT OF THE ORDER OF TRIBUNAL IN THE SAID CASE IS REPRODUCED HERE-IN-UNDE R: 2. IN A.Y. 2003-04, THE ASSESSEE HAS RAISED VARIOU S CONTENTIONS WITH REGARD TO ITS CLAIM U/S. 80IA(4) OF THE ACT AND SAM E WAS REJECTED BY THE A.O AND IT WAS UPHELD BY THE CIT(A). THE ASSESSEE'S STAND IS THAT THE PUNE MUNICIPAL CORPORATION IN ITS TENDER DOCUMENTS IN CLAUSE 2.1.1. SAYS THAT 'PROJECT OF PUNE ROAD TRAFFIC SIGNAGES AND FOO T OVER BRIDGES THROUGH PRIVATE PARTICIPATION HAS BEEN EVOLVED TO D EVELOP THE CITY INFRASTRUCTURE FACILITIES WITH NO EXCESS FINANCIAL BURDEN ON CORPORATION'. IN THIS REGARD, IT WAS FOUND BY REVENUE AUTHORITIES THAT FOR CLAIM OF .DEDUCTION UNDER 80 IA OF INCOME TAX ACT, PROFIT AN D GAIN SHOULD BE DERIVED FROM DEVELOPING INFRASTRUCTURAL FACILITIES AS DEFINED IN INCOME TAX ACT 1961. THE FACT THAT TENDER DOCUMENT OF PMC TRADES THE PROJECT OF ROAD TRAFFIC SIGNALS AND FOOT OVER BRIDGE AS HEL PFUL TO DEVELOP INFRASTRUCTURAL FACILITIES IS OF NO RELEVANCE IN TH IS REGARD. THIS ISSUE HAS GOT TO BE DECIDED WITH REFERENCE TO PROVISION OF LA W AS CONTAINED IN INCOME TAX ACT AS RIGHTLY HELD BY THE CIT(A). AS RE GARDS SUBMISSION OF ASSESSEE THAT SECTION 80IA(4) USES THE TERM 'DEVELO PMENT OF INFRASTRUCTURAL FACILITY AND NOT CONSTRUCTION. THE TERM DEVELOPMENT HAS WIDER CONNOTATION THAN CONSTRUCTION. FROM THE LANGU AGE OF RELEVANT SUB- SECTION 80IA, IT COULD BE SEEN THERE CANNOT BE ANY DEVELOPMENT OF INFRASTRUCTURAL FACILITY WITHOUT CONSTRUCTING THE I NFRASTRUCTURE AS DEFINED IN EXPLANATION TO SUB-SECTION (4) OF SECTION 80IA. 3. AS REGARDS THE SUBMISSION OF ASSESSEE THAT CIRCU LAR NO. 10/2005 DT. 16.12.2005 STATE THAT 'FOR THE PURPOSE OF SECTI ON 10(23G) AND SECTION 80 IA, STRUCTURE INCLUDES STRUCTURES AT THE PORTS F OR STORAGE, LOADING, UNLOADING ETC. AND ONLY STIPULATION PUT BY THIS CIR CULAR IS THAT THE CONCERNED AUTHORITY SHOULD ISSUE CERTIFICATE THAT T HE SAID STRUCTURES FORM A PART OF THE PORT AND THAT SUCH STRUCTURES ARE BUI LT ON BOT OR BOLT SCHEME AND THERE IS AN AGREEMENT THAT THE SAME SHOU LD BE TRANSFERRED TO THE SAID AUTHORITY ON THE EXPIRY OF THE TIME STI PULATED IN THE AGREEMENT. THE C.B.D.T BEING THE COMPETENT AUTHORI TY FOR THE PURPOSE OF DELEGATION OF LEGISLATION AS LAW MAKING POWER OF C. B.D.T IS UNDERSTOOD, THE AMBIT OF CIRCULAR SHOULD NOT BE ENLARGED TO INC LUDE THE ACTIVITY INTO 10 ITA NO. 1985/PN/2013, A.Y. 2010-11 WHICH THE ASSESSEE IS ENGAGED. THERE CANNOT BE ANY IMPLIED ENLARGEMENT OF SUB-SECTION. THE STAND OF THE ASSESS EE THAT STRUCTURES OF FOOT OVER BRIDGE AND ROAD SIGNALS ARE NECESSARY TO DEVELOP INFRASTRUCTURAL FACILITY WHICH IS ROAD, LACK MERIT FOR SIMPLE REASONS THAT ROAD ON WHICH SIGNALS HAVE BEEN PUT WAS EXISTING BE FORE SIGNALS WERE PUT. IN THIS BACKGROUND, IT WAS RIGHTLY OBSERVED TH AT ROAD SIGNALS COULD NOT BE SAID TO BE AN INTEGRAL AND IN-SEPARABLE PART OF THE ROAD. THEY CAN MAKE THE USE OF ROAD MORE CONVENIENT BUT IT CANNOT BE SAID THAT WITHOUT THE SIGNALS, THE ROAD CANNOT BE USED . 4. AS REGARDS THE SUBMISSION OF ASSESSEE THAT SECTI ON 80IA USES THE WORD 'DEVELOPING' AS AGAINST SEC 80 IB(10) WHICH US ES THE TERM THE DEVELOPMENT AND CONSTRUCTION AND THEREFORE, FOR CLA IM OF DEDUCTION U/S. 80IA(4), THERE MAY BE DEVELOPMENT OF INFRASTRUCTURE WITHOUT ITS CONSTRUCTION. IT WAS RIGHTLY FOUND MISPLACED TO THE FACTS IN THE CASE OF THE ASSESSEE. AS PER THE PROVISIONS OF SUB SECTION (1) TO SECTION 80 IA, WHERE GROSS TOTAL INCOME OF ASSESSEE INCLUDE ANY PROFIT A ND GAIN DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS REFE RRED TO SUBSECTION (4), AND DEDUCTION OF AN AMOUNT EQUAL TO 100% OF PR OFIT AND GAIN DERIVED BY THE ASSESSEE SHALL BE AVAILABLE FOR 10 CONSECUTI VE YEARS. ACCORDING TO THE PROVISION OF SECTION 80IA (4), IT APPLY TO ANY ENTERPRISE CARRYING ON BUSINESS OF (I) DEVELOPING OR (II) OPERATING OR MAINTAINING OF, (III) DEVELOPING, OPERATING AND MAINTAINING ANY INF RASTRUCTURAL FACILITIES. THE EXPLANATION TO SECTION 80IA (4) EXHAUSTIVELY DE FINES INFRASTRUCTURAL FACILITY IN ITS CLAUSE (A) AS ROAD INCLUDING TOLL R OAD, BRIDGE OR A RAIL SYSTEM. THE ASSESSEE HAS CONSTRUCTED TWO FOOT OVER BRIDGES AND ROAD SIGNALS. MOST OF THE INCOME OF THE ASSESSEE IS ON A CCOUNT OF PUTTING ROAD SIGNALS. IT DOES NOT FIT INTO DEVELOPMENT OF INFRAS TRUCTURAL FACILITIES AS DEFINED IN EXPLANATION TO SECTION 80IA(4). SO, THER E CANNOT BE ANY DEVELOPMENT OF ANY ROAD WITHOUT ITS CONSTRUCTION. A DDING ADDITIONAL FACILITY CANNOT BE SAID THAT AN INFRASTRUCTURAL FAC ILITY IN THE NATURE OF ROAD AS DEFINED IN EXPLANATION TO SECTION 80IA(4). 5. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE DID NOT DEVELOP ANY INFRASTRUCTURAL FACILITY IN THE NATURE OF ROAD AS DEFINED IN EXPLANATION TO SUB-SECTION (4) TO 80 IA OF INCOME T AX AND THEREFORE, THE ACTION OF THE A.O DENYING THE DEDUCTION TO ASSESSEE UNDER 80 IA NEED NO INTERFERENCE FROM OUR SIDE . WE UPHOLD THE SAME. SIMILAR ISSUE AROSE IN A.Y. 2004-05 AND 2005-06. FACTS BEING SIMILAR AND F OLLOWING THE SAME REASONINGS, THE REJECTION OF CLAIM U/S. 80IA(4) NEE D NO INTERFERENCE FROM OUR SIDE. 6. AS A RESULT, ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. 8. IN THE INSTANT CASE, THE ASSESSEE HAS CONSTRUCTED THREE FOOT OVER BRIDGES AND HAS INSTALLED ROAD SIGNAGE FOR THE INDORE MU NICIPAL CORPORATION. THE MAJOR PART OF INCOME DURING THE YEAR W AS RECEIVED ON ACCOUNT OF EXECUTION OF WORK OF ROAD SIGNAGE. THUS, THE F ACTS IN THE 11 ITA NO. 1985/PN/2013, A.Y. 2010-11 PRESENT CASE ARE IDENTICAL TO THE ONE ADJUDICATED BY TH E CO-ORDINATE BENCH IN THE GROUP CONCERN OF THE ASSESSEE. RESPECTFU LLY FOLLOWING THE SAME, WE HOLD THAT THE ACTIVITIES CARRIED ON BY THE ASSES SEE DO NOT FALL WITHIN THE AMBIT OF INFRASTRUCTURE FACILITY DEFINED IN EXPLA NATION TO SECTION 80IA(4). THUS, THE ASSESSEE IS NOT ELIGIBLE TO CLAIM D EDUCTION U/S. 80IA(4). 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED AND IMPUGNED ORDER IS SET ASIDE. ORDER PRONOUNCED ON WEDNESDAY, THE 14 TH DAY OF OCTOBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 14 TH OCTOBER, 2015 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-IT/TP, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE