ACIT, New Delhi V. M/s Rajahmundry Expressway Ltd., New Delhi

ITA 2798/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91333 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 01-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: VINOD MODI
• Keywords: Depreciation
• Section: 143(3); 147; 263

Judgement Text

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, CIRCLE 15(1), C.R. BLDG., I.P. ESTATE, NEW DELHI. VS. RAJAHMUNDRY EXPRESSWAY LTD., 16/17, LSC, 2 ND FLOOR, AHULWALIA CHAMBERS, 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: 07/07/2 015 O R D E R PER C.M. GARG, J.M. THIS APPEAL BY THE DEPARTMENT HAS BEEN DIRECTED AG AINST 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 RAI SED BY THE REVENUE READ AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND 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 8 0IA(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 LA NES AND THEREFORE, DEDUCTION U/S 80IA WOULD NOT BE AVAILABL E ON THE PROJECT INCOME AS THE CLARIFICATION CONTAINED IN CBDT CIRCU LAR NO. 4/2010. 2. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. AT THE OUT SET THE LD. AUTHORIZED REPRESENTATIVE (AR) SUBMITTED A COPY OF THE ORDER O F ITAT D BENCH, MUMBAI IN ASSESSEES OWN CASE FOR A.Y. 2008-09 ON T HE SIMILAR ISSUE ORDERED DATED 02/06/2015 IN ITA NO. 253/MUM./2012 A ND SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE AND THE CIT(A) WAS RIGHT IN GRATING RELIEF FOR THE ASSESSEE. 3. THE LD. DR CONTENDED THAT THE CIT(A) HAS ERRED I N DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF CLAIM OF DEDU CTION 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 T HEREOF TO FOUR LANES. THEREFORE, DEDUCTION U/S 80IA OF THE ACT WOULD NOT BE AVAILABLE ON THE PROJECT INCOME AS PER CLARIFICATORY CIRCULAR OF CBD T NO. 4/2010. HOWEVER, THE LD. DR FAIRLY ACCEPTED THAT THE SIMILAR ISSUE O N 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 02/0 6/2015 (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 IT A NO. 1214/PN/2010 DATED 05/04/2013 CIRCULAR NO. 4/2010 OF CBDT WAS AP PLIED BY THE TRIBUNAL HOLD THAT THE WIDENING OF ROADS WOULD AMOUNT TO CRE ATION OF NEW INFRASTRUCTURE FACILITY FALLING WITHIN THE PURVIEW OF SECTION 80IA OF THE ACT. THE LD. AR SUBMITTED THAT THE DEVELOPING OF AN INFR ASTRUCTURE FACILITY ALSO INCLUDE IMPROVEMENT OF EXISTING INFRASTRUCTURE FACI LITY WHICH BRINGS MORE EFFICIENCY AND EFFECTIVE USE OF INFRASTRUCTURE FACI LITY SUPPORTED BY BENEFIT OF ENDURING NATURE AND ROAD WIDENING WORK IS A SUBSTAN TIAL 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, W E NOTE THAT THE ITAT B BENCH MUMBAI IN ASSESSEES OWN CASE FOR A.Y. 20 08-09 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 S UBMITTED 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 TH E 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 B Y 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 T HUS THE SAME ATTAINED FINALITY. THOUGH HE SUBMITTED THAT IN RES PECT OF A.Y. 2007- 08 THE MATTER IS PENDING BEFORE THE ITAT, DELHI BEN CHES BUT AT THE ITA NO. 2798/D/2011 4 SAME TIME SUBMITTED THAT THE FACTS BEING NOT IN DIS PUTE THE ISSUE CAN BE DECIDED IN ANY YEAR AND IT IS NOT NECESSARY TO K EEP THE MATTER IN ABEYANCE TILL THE DISPOSAL OF THE EARLIER YEARS ORD ER. HE ALSO RELIED UPON THE DECISION OF THE ITAT PUNE IN THE CASE OF R OHAN & RAJDEEP INFRASTRUCTURE (ITA NO. 1214.PN/2010 DATED 05.04.20 13 WHEREIN CIRCULAR NO. 4/2010 WAS APPLIED BY THE TRIBUNAL TO HOLD THAT WIDENING OF ROADS WOULD AMOUNT TO NEW INFRASTRUCTUR E FACILITY FALLING WITHIN THE PURVIEW OF SECTION 80IA OF THE ACT. 5. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT SEC TION 80IA(4) SPEAKS OF DEVELOPING OF AN INFRASTRUCTURE FACILITY WHICH IMPLIES THAT IT SHOULD BE A NEW INFRASTRUCTURE FACILITY; DEVELOPMEN T 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 CAREFULL Y 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 C BDT AND THE SAME IS BINDING ON THE REVENUE. IN THE LIGHT OF THE CIRCUL AR ISSUED BY CBDT AND ALSO THE DECISION OF ITAT PUNE BENCH, THE EXPRE SSION DEVELOPMENT OF INFRASTRUCTURE FACILITY INCLUDES WID ENING OF ROADS. UNDER THESE CIRCUMSTANCES WE DO NOT FIND ANY INFIRM ITY IN THE ORDER PASSED BY THE CIT(A). 5. IN VIEW OF ABOVE IN THE LIGHT OF CLARIFICATORY C IRCULAR ISSUED BY CBDT AND RESPECTFULLY FOLLOWING THE DECISION OF ITAT PUN E BENCH IN THE CASE OF ROHAN & RAJDEEP INFRASTRUCTURE (SUPRA) AND ORDER OF THE ITAT MUMBAI DATED 02/06/2015 IN ASSESSEES OWN CASE FOR SUBSEQU ENT ASSESSMENT YEAR 2008-09 (SUPRA), WE ARE INCLINED TO HOLD THAT SECTI ON 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 DEVELOPMEN T OF INFRASTRUCTURE FACILITY HAS BEEN FURTHER CLARIFIED BY THE CBDT BY CIRCULAR NO. 4/2010 WHICH IS OBVIOUSLY BIDING ON THE REVENUE AUTHORITIES. UN DER ABOVE NOTED FACTS AND CIRCUMSTANCES ON LOGICAL ANALYSIS OF THE OPERAT IVE PART OF CIT(A) FROM PARA 4.1 TO 4.3 OF THE IMPUGNED ORDER. WE NOTE THA T THE CIT(A) AFTER PROPERLY CONSIDERING CIRCULAR NO. 4/2010 OF CBDT AN D RELEVANT PROVISION OF SECTION 80IA(4)(I) OF THE ACT. RIGHTLY DRAWN A CON CLUSION THAT THE PROJECT OF DEVELOPMENT AND WIDENING ROAD UNDER TAKEN BY THE AS SESSEE QUALIFIES THE DEFINITION OF NEW INFRASTRUCTURE FACILITY FOR THE P URPOSE OF CLAIMING DEDUCTION U/S 80IA(4)(I) OF THE ACT AND THE CIT(A) WAS CORREC T 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 DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/07/2015 SD/- SD/- ( J.S. REDDY ) ACCOUNTANT MEMBER ( C.M. GARG ) 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. NO. 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