GMR Tambaram Tindivanam Expressways Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-3(1)(2), Bangalore

ITA 545/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1186 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 27-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: SUNIL JAIN
• Keywords: Rule of consistency; Source of fund
• Section: 147; 10

Judgement Text

ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER 1-2. I.T.A NOS.545 & 546/BANG/2018 (ASSESSMENT YEARS : 2013-14 & 2014-15) GMR TAMBARAM TINDIVANAM EXPRESSWAYS LTD, 25/1, SKIP HOUSE, MUSEUM ROAD, BENGALURU 560 025 .. APPELLANT PAN : AABCG8417F V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 3(1)(2), BENGALURU .. RESPONDENT 3-4. I.T.A NOS.1130 & 1131/BANG/2018 (ASSESSMENT YEARS : 2013-14 & 2014-15) (BY THE REVENUE) ASSESSEE BY : SHRI. SUNIL JAIN, CA REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT HEARD ON : 06.09.2018 PRONOUNCED ON : 26.11.2018 O R D E R PER BENCH : THESE ARE FOUR APPEALS IN ALL, TWO BY THE ASSESSEE AND THE OTHER TWO BY THE REVENUE FILED AGAINST THE SEPARATE ORDERS OF THE ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 2 CIT (A) -3, BENGALURU, DT.23.01.2018, FOR THE ASSES SMENT YEARS 2013-14 AND 2014-15 RESPECTIVELY. A COMMON GROUNDS RAISED BY THE ASSESSEE IN ITA NO 545 & 546/BANG/2018 FOR BOTH THE ASSESSMENT YEARS, BUT FO R CHANGE IN FIGURES OF DISALLOWANCE ARE AS UNDER: ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 3 02. BRIEF FACTS 2.1 THE GOVERNMENT OF INDIA HAS BY NOTIFICATION NO S.O. 92 DATED DECEMBER 19TH 1988 ENTRUSTED NHAI WITH THE STRETCH OF NATION AL HIGHWAY FROM KM 28/0 TO KM 121/00 IN TAMBARAM TINDIVANAM SECTION ON NH-45 IN THE STATE OF TAMIL NADU. NHAI IN DISCHARGE OF ITS FUNCTIONS, ENVISAGED UNDER SECTION 16 OF THE NHAI ACT WAS KEEN TO IMPLEMENT THE AFORES AID STRETCH OF NH-45, A PROJECT ENVISAGING STRENGTHENING OF THE EXISTING 4 LANES FROM KM. 28/0 TO KM 67/0 AND WIDENING THEREOF TO THE EXISTING 2 LANE FR OM KM 67/0 TO KM 121/0 TO 4 LANE DUAL CARRIAGEWAY, WITH PRIVATE SECTOR PAR TICIPATION ON BUILD, OPERATE AND TRANSFER (BOT) BASIS. 2.2 NHAI CARRIED OUT EXTENSIVE PROJECT DEVELOPMENT WORK IN CONNECTION WITH THE PROJECT INCLUDING ENGINEERING STUDIES, ASSESSMENT O F FEASIBILITY AND PREPARATION OF A DETAILED PROJECT REPORT. ACCORDING LY, NHAI INVITED COMPETITIVE PROPOSALS FROM ELIGIBLE PERSONS FOR IMP LEMENTING THE PROJECT AND IN RESPONSE THERETO NHAI RECEIVED PROPOSALS FROM SE VERAL PERSONS INCLUDING GMR CONSORTIUM FOR IMPLEMENTING THE PROJECT. NHAI, AFTER EVALUATING THE PROPOSALS, ACCEPTED THE PROPOSAL SUBMITTED BY GMR C ONSORTIUM AND ISSUED LETTER OF ACCEPTANCE DATED AUGUST 16TH 2001 (LOA) T O THE CONSORTIUM. 2.3 IN ACCORDANCE WITH THE TERMS OF PROPOSALS SUBMI TTED BY GMR CONSORTIUM, THE CONSORTIUM WAS REQUIRED TO INCORPORATE A SEPARATE E NTITY TO DEVELOP AND IMPLEMENT THE PROJECT. ACCORDINGLY, THE GMR CONSORT IUM INCORPORATED THE ASSESSEE COMPANY (I.E. CONCESSIONAIRE) ON AUGUST 27 , 2001 AS A SPECIAL PURPOSE VEHICLE (SPV) TO IMPLEMENT, OPERATE AND MAI NTAIN THE PROJECT AND NHAI HAS AGREED TO GRANT) THE CONCESSIONAIRES, THE CONCESSION. ACCORDINGLY, ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 4 THE ASSESSEE HAS ENTERED INTO A CONCESSION AGREEMEN T DATED OCTOBER 9TH 2001 WITH NINA! TO COMPLY WITH THE TERMS OF THE CONCESSI ON AGREEMENT. 2.4 AS MENTIONED IN ARTICLE 2 OF THE CONCESSION AGR EEMENT 'GRANT OF CONCESSION' SET FORTH .THE 'SCOPE OF WORK TO BE UNDERTAKEN BY T HE ASSESSEE WAS AS UNDER UNDER: `SUBJECT TO AND IN ACCORDANCE WITH THE TERMS AND CO NDITION SET FORTH IN THIS AGREEMENT, NHAI HEREBY GRANTS AID AUTHORISES T HE CONCESSIONAIRE TO INVESTIGATE, STUDY, DESIGN, ENGINEER, PROCURE, F INANCE, CONSTRUCT, OPERATE AND MAINTAIN THE PROJECT / PROJECT FACILITI ES AND TO EXERCISE AND /OR ENJOY THE RIGHTS, POWERS, BENEFITS, PRIVILEGES, AUTHORISATIONS AND ENTITLEMENTS AS SET FORTH IN THIS AGREEMENT (`THE C ONCESSION')' 2.5. FURTHER, THE CONCESSION AGREEMENT DEFINE THE T ERM 'PROJECT', 'PROJECT SITE', 'PROJECT FACILITIES' 'CONCESSION PERIOD' AND SCHEDU LE D AS UNDER: 'PROJECT' MEANS DESIGN, FINANCING, CONSTRUCTION, OPERATIONS A ND MAINTENANCE OF THE PROJECT FACILITIES IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT. 'PROJECT SITE' COMMENCES FROM TAMBARAM SOUTH OF EXISTING ROB AT KM 28.00, TRAVERSES GENERALLY IN SOUTH WEST DIRECTION AND ENDS AT KM 121.0 NEAR TINDIVANAM AN NH-45. THE WIDTH OF THE EXISTING RIGH T OF WAY (ROW) COMPRISED IN THE PROJECT SITE IS GIVEN IN TABLE B-1 TO THE CONCESSION AGREEMENT. ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 5 FURTHER THE NHAI HAS ACQUIRED ADDITIONAL LAND TO HAVE LAND WIDTH OF 20M FROM THE EXISTING PAVED SHOULDER EDGE ON RIGHT SIDE FROM KM 67.00 TO KM 111.00 AND ON LEFT SIDE FROM KM 111.00 TO KM 121.00 THE PROJECT SITE SHALL ALSO INCLUDE ADDITIONAL LAND IF ANY, HANDED OVER BY NHAI TO ACCOMMODATE ANY OF THE PROJECT FACILITY. 'PROJECT FACILITIES' MEANS COLLECTIVELY THE FACILITIES SET OUT IN SCHEDU LE 'D' TO THE CONCESSION AGREEMENT TO BE DESIGNED, CONSTRU CTED, BUILT, INSTALLED, ERECTED OR PROVIDED BY THE CONCESSIONAIRE ON THE PR OJECT SITE IN ACCORDANCE WITH THE DESIGN REQUIREMENTS AND CONSTRUCTION REQUI REMENTS. 'THE FACILITY TO BE PROCURED, CONSTRUCTED, BUILT, I NSTALLED, ERECTED OR PROVIDED BY THE CONCESSIONAIRE IN THE PROJECT FACIL ITY SHALL BE THOSE SET OUT IN DETAILED PROJECT REPORT (DPR) AND SCHEDULE D TO THE CONCESSION AGREEMENT. 'CONCESSION PERIOD' MEANS THE PERIOD OF CONCESSION SPECIFIED IN ARTICLE 2.2, AS APPLICABLE. AS PER ARTICLE 2.2 TO THE CONCESSION PERIOD 'THE CO NCESSION HEREBY GRANTED IS FOR A PERIOD OF 17 YEARS 6 MONTHS COMMEN CING FROM THE COMMENCEMENT DATE AND ENDING WITH 8TH NOVEMBER, 201 9 ('THE CONCESSION PERIOD') DURING WHICH THE CONCESSIONAIRE IS AUTHORISED TO IMPLEMENT THE PROJECT AND TO OPERATE PROJECT FACILI TY IN ACCORDANCE WITH THE PROVISIONS HEREOF'. ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 6 ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 7 ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 8 2.6. FURTHER, AS PER ARTICLE 5 OF THE CONCESSION AGREEMENT 'CONCESSIONAIRE'S OBLIGATION' WHERE THE CONCESSIONAIRE WAS REQUIRED TO FULFILL CE RTAIN OBLIGATION BEFORE THE START OF THE CONSTRUCTION OF PROJECT AND DURING THE CONCESSION PERIOD WHICH WAS FOR A PERIOD OF 17 YEARS AND 6 MONTHS. TH ESE ARE BROADLY SUMMARISED AS UNDER: (I) PERFORMANCE SECURITY (II) FINANCIAL ARRANGEMENT (III) DRAWINGS (IV) PROJECT IMPLEMENTATION AND CONSTRUCTION WORKS (V) OPERATION AND MAINTENANCE (VI) INSURANCE (VII) SHAREHOLDING, AND, (VIII) GENERAL OBLIGATIONS 2.7 THE CONCESSION GRANTED TO THE APPELLANT COMPANY IS FOR A PERIOD OF 17 YEARS AND 6 MONTHS COMMENCING FROM THE COMMENCEMENT DATE (I.E . MAY 9TH 2002) AND ENDING ON NOVEMBER 8TH 2019 DURING WHICH THE APPELL ANT COMPANY IS REQUIRED TO IMPLEMENT THE PROJECT AND TO OPERATE AND MAINTAI N THE PROJECT FACILITIES IN ACCORDANCE WITH THE PROVISIONS OF CONCESSION AGREEM ENT. 2.8 LD AR HAD SUBMITTED THAT THE ASSESSEE HAD INCURRED AN AMOUNT OF RS. 361.95 CRORES FOR THE IMPLEMENTATION OF THE PROJECT / PROJECT FACILITIES IN TERMS OF THE CONCESSION AGREEMENT WITH NHAI. THE AFORESAID COST OF THE PROJECT WAS FINANCED AS PER DETAILS BELOW :- ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 9 SOURCE OF FUND AMOUNT (RS. IN CRORE) EQUITY CAPITAL 1.00 PREFERENCE CAPITAL 106.70 DEBT IN THE FORM OF LOAN FROM BANKS 254.25 TOTAL 361.95 2.9 BESIDES, THE APPELLANT IS ALSO REQUIRED TO OPER ATE AND MAINTAIN THE PROJECT FOR PERIOD OF 15 YEARS FROM THE DATE OF ACHIEVING THE COMMERCIAL OPERATION. 2.10 THE LD AR SUBMITTED THAT IN LIEU OF IMPLEMENTA TION, OPERATION AND MAINTENANCE OF THE PROJECT AND PROJECT FACILITIES BY THE APPELLANT COMPANY, NHAI IS REQUIRED TO PAY SEMI ANNUITY OF RS. 41.856 CR ON HALF YEARLY BASIS ON EACH ANNUITY DATE I.E. MAY AND NOVEMBER AS DETAILE D IN SCHEDULE-J TO THE CONCESSION AGREEMENT. THE AMOUNT OF ANNUITY PAYMEN T SHALL GET REDUCED IN THE EVENT OF NON-AVAILABILITY OF HIGHWAY FOR THE DEFAULT OF CO NCESSIONAIRE IN TERMS OF THE CONCESSION AGREEMENT. 2.11. THE LD AR SUBMITTED, THE ASSESSEE HAS BEEN FORMED AS A SPECIAL PURPOSE VEHICLE (SPV) TO SPECIFICALLY IMPLEMENT, DESIGN, DE VELOP, OPERATE AND MAINTAIN THE STRETCH FROM KM 28/0 TO KM 121/0 ON NH-45 ON BUILD, OPERATE AND TRANSFER (BOT) BASIS. THE INFRASTRUCTURE PROJECT, AWARDED BY NHAI ON BOT BASIS FALLS UNDER THE DEFINITION OF INFRASTRUCTURE FACILITY AS PER THE PROVISION OF SECTION 80IA OF THE INCOME TAX ACT, 1961 AND IS ELIGIBLE FOR DEDUCT ION @ 100% OF THE PROFIT EARNED FROM THE BUSINESS OF DEVELOPMENT, OPERATION AND MAINTENANCE OF TAMBARAM-TINDIVANAM SECTION OF NH-45 IN THE STATE O F TAMIL NADU. THE ASSESSEE HAS BEEN ALLOWED DEDUCTION U/S 801A FROM AY 2007-08 ONWARDS AND FOR AY 2013-14 AND 2014-15 THE ASSESSEE APPELLANT CLAIMED DEDUCTION AS PER DE TAILS GIVEN BELOW:- ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 10 SI PARTICULARS AY 2013 - 14 AY 2014 - 15 NO 1 PROFIT FROM THE BUSINESS OF RS. 10,56,77,828 RS. 11,29,02,768 DEVELOPMENT, OPERATION AND MAINTENANCE OFTUNI-ANAKAPALLI SECTION OF NH- 5 IN THE STATE OF ANDHRA PRADESH 2 AMOUNT OF DEDUCTION CLAIMED RS. 10,56,77,828 RS. 11,29,02,768 U/S.80IA 2.12.1 HOWEVER, THE AO ON COMPLETION OF THE ASSESSMENT ALL OWED ONLY 50% OF THE CLAIM MADE U/S 80IA BY THE APPELLANT IN THE RET URN OF INCOME AS PER DETAILS GIVEN BELOW:- SI PARTICULARS AY 2013 - 14 AY 2014 - 15 NO 1 CLAIM U/S 801A BY THE ASSESSING OFFICER ALLOWED RS. 5,28,38,914 RS. 5,64,51,384 3 THE LD AR SUBMITTED THAT THE ASSESSEE ENTERED INTO A CONCESSION AGREEMENT WITH NATIONAL HIGHWAYS AUTHORITY OF INDIA IN OCTOBER, 2001. FOR THE PURPOSES OF ARTICLE 2, 2.1 OF THE AG REEMENT, THE ASSESSEE DRAWN OUR ATTENTION TO THE DEFINITION OF A. ANNUITY B. CONCESSION PERIOD C. CONCESSION D. CONSORTIUM THE ASSESSEE ALSO DREW OUR ATTENTION TO THE LETTER DT.16.08.2001 WHERE THE DETAILS OF THE WORK AWARDED TO THE ASSESS EE ARE MENTIONED IN SCHEDULE B, TO THE FOLLOWING EFFECT : ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 11 ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 12 04. ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED THA T THE ASSESSEE WAS GIVEN WORK BY NATIONAL HIGHWAYS AUTHORITY OF IN DIA, FOR DEVELOPING THE INFRASTRUCTURE AS MENTIONED IN SCHED ULE -D (SUPRA) AND THEREFORE THE ASSESSEE WAS ENTITLED TO THE BENE FIT U/S.80IA OF THE ACT. THE ASSESSEE BEFORE US HAD ALSO DRAWN OUR ATT ENTION TO PAGE 114 OF THE PAPER BOOK WHERE IT WAS MENTIONED THAT I T WAS THE DUTY OF CONCESSIONAIRE TO OPERATE AND MAINTENANCE PROJEC T FACILITIES AS PER STANDARD AND SPECIFICATION SET OUT IN THE AGREE MENT. BASED ON THE ABOVE, IT WAS SUBMITTED THAT THE ASSES SEE HAS LAID DOWN THE INFRASTRUCTURE AND IS ALSO OPERATING AND M AINTAINING THE NEWLY LAID DOWN INFRASTRUCTURE AND HENCE THE ASSESS EE IS ENTITLED TO DEDUCTION U/S.80IA OF THE ACT. THE ASSESSING OFFIC ER IN THE ASSESSMENT ORDER MENTIONED IN PARA 7 AND 8 AS UNDER : 7. I HAVE GONE THROUGH THE SUBMISSIONS OF THE ASSES SEE AND IT IS SEEN THAT THE CONCESSION GRANTED TO THE ASSESSEE INVOLVE S STRENGTHENING OF THE EXISTING ROAD BESIDES WIDENING OF ROAD INTO DUA L CARRIAGEWAY 4 LANE. THE WORK PERTAINING TO STRENGTHENING OF EXIST ING ROAD DOES NOT FALLS WITHIN THE DEFINITION OF 'NEW INFRASTRUCTURE FACILITY' AND HENCE THE INCOME DERIVED PERTAINING TO SUCH STRENGTHENING WOULD NOT QUALIFY FOR DEDUCTION UNDER SECTION 80-IA OF THE IT ACT, 1961. FURTHER, THE BOARD HAS ISSUED CIRCULAR NO 4 OF 2010 DATED MAY 18TH 2010 WHEREIN IT HAS CLARIFIED AS UNDER: 'THE ISSUE HAS BEEN EXAMINED BY THE BOARD. IT HAS B EEN DECIDED THAT WIDENING OF AN EXISTING ROAD BY CONSTR UCTING ADDITIONAL LANES AS A PART OF A HIGHWAY PROJECT BY AN UNDERTAKING WOULD BE REGARDED AS A NEW INFRASTRUCTU RE FACILITY FOR THE PURPOSE OF SECTION 80IA (4)(I). HO WEVER, SIMPLY RELAYING OF AN EXISTING ROAD WOULD NOT BE CL ASSIFIABLE AS A NEW INFRASTRUCTURE FACILITY FOR THIS PURPOSE'. THE ABOVE CLEARLY SHOWS THAT SIMPLY RELAYING OF AN EXISTING ROAD WOULD NOT BE CLASSIFIABLE AS A NEW INFRASTRUCTURE F ACILITY FOR THE PURPOSE OF SECTION 80-THE STRENGTHENING OF EXISTING ROAD IS NOTHING BUT RELAYING OF EXISTING ROAD AND HENCE IN VIEW OF SAME, THE ASSESSEE WOULD NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 8 0-IA WITH RESPECT ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 13 TO STRENGTHENING OF EXISTING ROAD WHICH IS NOTHING BUT A WORKS CONTRACT. THE INCOME DERIVED FROM WORKS CONTRACT IS NOT ELIGIBLE FOR DEDUCTION U/S. 80-IA AS HELD IN THE FOLLOWING DECIS IONS: (I) CHENNAI ITAT IN THE CASE OF ACIT V INDWELL LIANINGS PVT. LTD. APPEAL NO. : ITA NOS. 1631 & 1632 (MDS.)/2007. (II) DELHI ITAT IN THE CASE OF SHRISTI INFRASTRUCTURE DE VELOPMENT CORPORATION LTD. (33 SOT 407).. (III) HYDERABAD ITAT IN THE CASE OF M/S. KOYA AND COMPANY CONSTRUCTION LTD VS, ITO IN ITA NO 417/HYDI/2013 FO R AY 2008-09 AND ITA NIO.418/HYD/2013 FOR AY 2009-10 (IV) MUMBAI ITAT IN THE CASE OF SMC INFRASTRUCTURE P. LT D, THANE VS ACIT IN ITA NO 678 & 679/MUM/2010 FOR AY 2006-07 (V) BIOTECH MEDICALS (P) LTD., 121 'TTJ 858 (VI) B.T.PATIL & SONS BELGAUM VS. ACIT 126 TTJ 577 (MUM) (VII) AHMEDABAD ITAT IN THE CASE OF MODERN CONSTRUCTION C O (P.) LTD VS DCIT (42 TAXMANN.COM 172) (AHD-TRIB) (VIII) HYDERABAD ITAT IN THE CASE OF KMC CONSTRUCTIONS LTD VS. ACIT (21 TAXMANN.COM 138) (HYD-TRIB) 8. IN ABSENCE OF BREAKUP OF INCOME AND EXPENSES REA CTING TO WIDENING, STRENGTHENING AND HAVING REGARD TO THE FA CT THAT THE ASSESSEE IS NOT ONLY REQUIRED TO WIDEN AND STRENGTH EN THE CARRIAGEWAY BUT IS ALSO REQUIRED TO OPERATE AND MAI NTAIN T H E ROAD ON PERIODICAL BASIS AS WELL AS IT HAS TO CARRY OUT MAJOR MAINTENANCE WORK EVERY FIVE YEARS. KEEPING IN VIEW OF THE ABOVE AND IN THE ABSENCE OF ANY BREAK- UP OF INCOME AND EXPENSES REL ATING TO EACH ACTIVITY, AN AMOUNT TO THE EXTENT OF 50% DEDUCTION CLAIMED UNDER SECTION 80- IA IS CONSIDERED AS ATTRIBUTABLE TO THE ACTIVITY OF STRENGTHENING OF EXISTING ROAD AND ACCORDINGLY 50% OF THE CLAIM MAD E U/S 80IA IS BEING DISALLOWED AS PER AS PER DETAILS GIVEN BELOW: INCOME UNDER THE HEAD BUSINESS DEDUCTION U/S 80- IA CLAIMED BY ASSESSEE LESS: DISALLOWED 50% ON ACCOUNT OF RELAYING AND STRENGTHENING OF EXISTING 2 LANE NET DEDUCTION U/S 80 - IA RS. 11,29,02,768 RS. 11,29,02,768 RS. 5,64,51,384 RS. 5,64,51,384 05. FEELING AGGRIEVED BY THE DECISION OF THE AO THE ASSESSEE FILED APPEAL BEFORE THE CIT (A), WHO AFTER EXAMINING THE FACTS AND THE ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 14 APPLICABILITY OF CERTAIN JUDGMENTS, HAD DECIDED THE ISSUE WITH RESPECT TO A) WITH RESPECT TO THE STRENGTHENING OF CARRIAGEWA Y FROM 28 KM TO 67 KMS, THE CIT (A) HAD DISALLOWED THE CL AIM OF THE ASSESSEE ON THE GROUND THAT STRENGTHENING OF THE EX ISTING LANE WOULD NOT COME WITHIN THE DEFINITION OF CREATING NEW INFR ASTRUCTURE AND FOR THAT PURPOSES CIT(A) RELIED UPON THE CIRCULAR OF TH E CBDT AND HELD ORDER PASSED BY AO DISALLOWING U/S.80IA IN RELATION TO THE INCOME FROM THE ACTIVITY OF STRENGTHENING OF THE EXISTING CARRIAGEWAY WAS CORRECT. B) STRENGTHENING AND WIDENING OF THE EXISTING TWO L ANE TO FOUR FROM 67 KMS TO 121 KMS TO BE AN INFRASTRUCTUR E WITHIN THE MEANING OF INFRASTRUCTURE U/S.80IA AND HAD HENCE A LLOWED THE CLAIM OF THE ASSESSEE . HOWEVER AS THE ASSESSEE HAS NOT GIVEN THE DETAILS O F THE INCOME WHICH AROSE TO IT IN RESPECT OF STRENGTHENIN G , REPAIR AND IMPROVEMENT OF EXISTING LANE FROM 28 TO 67 KMS, TH E CIT (A) HAD PRO-RATA REDUCED 50% DISALLOWANCE MADE BY AO TO 25 % OF THE INCOME. THE PARTICULARS OF CLAIM ALLOWED AND DISAL LOWED BY THE CIT(A) ARE UNDER : SI NO PARTICULARS AY 2013 - 14 AY 2014-15 1 CLAIM U/S 80IA ALLOWED BY THE CIT(A) RS. 2,64,19,457 RS. 2,82,25,692 2 CLAIM U/S 80IA DISALLOWED BY THE CIT(A) RS. 2,64,19,457 RS. 2,82,25,692 ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 15 06 NOW THE ASSESSEE IS IN APPEAL WITH REGARD TO TH E DISALLOWANCE OF DEDUCTION U/S.80IA PERTAINING TO THE INCOME ARIS ING TO THE ACTIVITY OF STRENGTHENING OF THE EXISTING FOUR-LANE AND ALSO FOR REDUCTION OF DEDUCTION FROM 50%TO 25% OF 80IA CLAI M , WHEREAS REVENUE IS IN APPEAL BEFORE US IN RESPECT OF TREATM ENT GIVEN BY THE CIT(A) TREATING THE DEVELOPMENT DONE BY THE ASSESSE E AS INFRASTRUCTURE . 07. THE LD. AR BEFORE US HAD SUBMITTED A DETAILED N OTE IN SUPPORT OF THE ARGUMENT AND SUBMITTED AS UNDER : IT IS RESPECTFULLY SUBMITTED THAT THE ASSESSING OF FICER AS WELL AS LEARNED CIT(APPEALS) HAVE PLACED RELIANCE ON THE WORDINGS G IVEN IN CIRCULAR NO 4/2010 DATED MAY 18, 2010 OF CBDT WHICH USES THE LA NGUAGE 'SIMPLY RELAYING OF AN EXISTING ROAD WOULD NOT BE CLASSIFIA BLE AS A NEW INFRASTRUCTURE FACILITY' IS TOTALLY MISPLACED IN AS MUCH AS SIMPLE RELAYING OF EXISTING ROADS WOULD MEAN REPAIR AND MAINTENANCE OF SAME. HOWEVER, IN THE PRESENT CASE IT IS NOT SO SINCE THE CONCESSION GRANTED TO THE APPEL LANT IS AN INTEGRATED ONE I.E. STRENGTHENING AS WELL AS WIDENING OF STRETCH F ROM KM 28/0 TO KM 121/0 FROM 2 LANE TO 4 LANE COUPLED WITH OPERATION AND MA INTENANCE OF SAME FOR A PERIOD OF 15 YEARS. THE STRENGTHENING OF ROADS IN S UCH AN INTEGRATED CONCESSION IN NO WAY CAN BE CONSIDERED AS RELAYING (OR REPAIR AND MAINTENANCE) OF THE EXISTING ROAD. IF SUCH A NARROW MEANING IS GIVEN IT WOULD DEFEAT THE PURPOSE OF CONCESSION ALLOWED, BEN EFIT ALLOWED U/S 801A AND THE SAME WOULD BE CONTRARY TO THE LEGISLATIVE I NTENT BEHIND PROVIDING TAX CONCESSION U/S 801A AS WELL AS THE CIRCULAR OF CBDT WHICH CLEARLY PROVIDES THAT THE STRENGTHENING AND WIDENING OF EXISTING HIG HWAY WOULD TANTAMOUNT TO NEW INFRASTRUCTURE FACILITY AND SIMPLE RELAYING OF EXISTING ROAD I.E. REPAIR AND MAINTENANCE, WOULD NOT BE CONSIDERED AS NEW INF RASTRUCTURE FACILITY. ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 16 17. IT WOULD BE EVIDENT FROM THE ABOVE, THAT THE APPELL ANT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE INCOME TAX ACT, 1961 AS THE APPELLANT IS SOLELY ENGAGED IN THE BUSINESS OF DEVE LOPING, OPERATING AND MAINTAINING HIGHWAY FROM KM 28/0 TO KM 121/0 ON TAM BARAM TINDIVANAM SECTION OF NH-45 IN THE STATE OF TAMIL N ADU ON BOT BASIS AND HAS UNDERTAKEN THE STRENGTHENING OF THE EXISTIN G 4 LANE FROM KM 28/0 TO KM 67/0 AND 2 LANE FROM KM 67/0 TO 121/0 AN D WIDENING IT INTO 4 LANE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 80IA(4) AND THE SETTLED LEGAL POSITION AS STATED ABOVE. 18. IT IS RELEVANT TO NOTE THAT THE APPELLANT HAS BEEN ALLOWED DEDUCTION U/S 80IA FOR THE PAST YEARS I.E. AY 2007-08 TO AY 2 012-13 AND FOR THE SUBSEQUENT YEARS I.E. AY 201516 AND AY 2016-17 AS W ELL. THE CLAIM OF DEDUCTION PARTIALLY AS DETAILED ABOVE HAS BEEN D ISALLOWED ONLY FOR THESE TWO ASSESSMENT YEARS I.E. AY 2013-14 AND AY 2 01415. 19. FURTHER, THE HON'BLE BANGALORE ITAT HAS EXAMINED TH E AFORESAID ISSUE IN THE CASE OF GROUP COMPANY, NAMELY M/S GMR TUNI-A NAKAPALLI EXPRESSWAYS LIMITED IN ITA NO 1132 & 1133/BANG/201 8 FOR AY 2013-14 AND AY 2014-15 WHEREIN ON IDENTICAL FACTS, THE HON'BLE ITAT IN PARA 5 OF THE ORDER HAS HELD AS UNDER: 'WE HAVE CONSIDERED THE RIVA; SUBMISSIONS. WE FIND THAT THE LEARNED CIT (A) HAS FOLLOWED TWO TRIBUNAL ORDERS AND NO DIF FERENCE IN FACTS COULD BE POINTED OUT BY THE LEARNED DR OF THE REVEN UE. AS PER PARA 48 OF THIS TRIBUNAL ORDER, IN THAT CASE ALSO, DEDUCTIO N U/S 801A WAS IN DISPUTE FOR THE WORK UNDERTAKEN BY THE ASSESSEE FOR WIDENING TO FOUR LANES AND STRENGTHENING OF EXISTING TWO LANE CARRIA GEWAY IN KM. 27.80 TO KM. 61.00 JAGATPUR-CHANDIKHOL SECTION OF NATIONA L HIGHWAY NO.5 IN THE STATE OF ORISSA. IN THE PRESENT CASE ALSO, THE FACTS ARE SIMILAR AND THE AO ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 50% BY HOLDING THAT WORK UNDERTAKEN BY THE ASSESSEE FOR WIDENING TO FOU R LANES IS ELIGIBLE FOR DEDUCTION BUT HE HELD THAT THE WORK UNDERTAKEN BY T HE ASSESSEE FOR STRENGTHENING OF EXISTING TWO LANE CARRIAGEWAY IN K M. 27.80 TO KM. 61.00 JAGATPUR-CHANDIKHOL SECTION OF NATIONAL HIGHWAY NO. 5 IN THE STATE OF ORISSA IS NOT ELIGIBLE FOR SUCH DEDUCTION AND SINCE THIS IS A COMBINED CONTRACT AND SEPARATE PROFIT IS NOT DETERMINABLE, H E HELD THE 50% OF THE ENTIRE PROFIT IS FOR SUCH WORK IN RESPECT OF STRENG THENING OF EXISTING TWO LANE CARRIAGEWAY AND TO THIS EXTENT, HE DISALLOWED THE CLAIM OF THE ASSESSEE. WHEN WE EXAMINE THIS LEGAL POSITION IN TH E LIGHT OF THIS FACT THAT IN ALL EARLIER YEARS, THE AO HAS HIMSELF ALLOWED TH E CLAIM OF THE ASSESSEE IN THE ORDERS PASSED BY HIM U/S 143 (3), THERE IS N O INFIRMITY IN THE ORDER OF CIT (A) AND HENCE, WE DECLINE TO INTERFERE.' COPY OF THE ORDER OF HONTIE BANGALORE ITAT IN ITA N O 1132 & 1133/BANF - J2018 FOR AY 2013-14 AND AY 2014-15 IN THE CASE OF M/S GMR TUNI- ANAKAPALLI EXPRESSWAYS LIMITED IS ENCLOSED HEREWITH FOR YOUR HONOUR'S READY REFERENCE. 08 THE LD. AR HAS MADE FOLLOWING ARGUMENTS: 1. DEDUCTION U/S 801A IS TO BE ALLOWED TO AN ASSESSEE CARRYING ON BUSINESS OF DEVELOPING OF ROADS OR INFRASTRUCTURE FACILITY W HO HAVE ENTERED INTO A ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 17 VALID CONTRACT WITH THE GOVERNMENT OR GOVERNMENT AG ENCY FOR DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURE FACILI TY, 2. DEDUCTION U/S 80IA IS AVAILABLE TO ENTITIES WHO ARE (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPING, OPER ATING AND MAINTAINING ANY INFRASTRUCTURE FACILITY, 3. DEDUCTION U/S 80IA IS TO BE ALLOWED WHEN ASSESSEE H AD DEVELOPED A ROAD PROJECT AND TRANSFERRED THE SAME FOR THE PURPOSE OF OPERATION AND MAINTAINING TO THIRD PARTY, 4. DEDUCTION U/S 8-IA IS TO BE ALLOWED TO THE ASSESSEE , AS THE ASSESSEE IS A DEVELOPER AND NOT A WORKS CONTRACTOR WHEN IT HAS PR OCURED RAW MATERIAL, MAKE ARRANGEMENT FOR POWER, WATER, PLANT & MACHINER Y ETC. AND CONDUCTED ALL OTHER ACTIVITY NEEDED FOR CONSTRUCTION AND HAS INVESTED HUGE FUNDS IN THE PROJECT FOR DEVELOPING, OPERATING AND MAINTAINING A NY INFRASTRUCTURE FACILITY, 5. WORK INVOLVING STRENGTHENING, IMPROVING AND WIDENIN G OF EXISTING ROAD IS TO BE CONSIDERED AS NEW INFRASTRUCTURE FACILITY ELIGIB LE FOR DEDUCTION UNDER SECTION 80-IA, 6. IF THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONST RUCTION / DEVELOPMENT OF INFRASTRUCTURE FACILITY, CLAIM U/S 80IA CANNOT BE R EJECTED ON THE GROUND THAT ASSESSEE IS A CONTRACTOR AND NOT A DEVELOPER, 7. EXPANSION OR EXTENSION OF AN EXISTING UNIT, WOULD N OT DISENTITLE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80-IA/80-1B WHERE IT DEVELOPS, OPERATE AND MAINTAIN AN INFRASTRUCTURE FACILITY, 8. IT WILL BE DEEMED TO BE NEW INFRASTRUCTURE FACILITY IF THE LIFE OF THE EXISTING INFRASTRUCTURE FACILITY IS INCREASED FOR SUFFICIENT LY LONG PERIOD BY INCURRING HUGE EXPENDITURE, 9. A PROVISION IN A TAXING STATUTE GRANTING INCENTIVES FOR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY, 10. DEDUCTION U/S 801A IS TO BE ALLOWED DURING CURRENT YEAR IF, ALLOWED IN EARLIER ASSESSMENT YEARS. IN OTHER WORDS, PRINCIPLE OF CONSISTENCY NEEDS TO BE FOLLOWED. RELIANCE IS PLACED ON BANGALORE ITAT D ECISION IN ITA NO 1132 & 1133/BANG/2018. 11. THE STRENGTHENING OF THE EXISTING FOUR LANES IS REQ UIRED TO BE TREATED AS A DEVELOPMENT OF INFRASTRUCTURE ACTIVITY IN TERM S OF VARIOUS TERMS AND CONDITIONS OF THE CONTRACT ; 12. THE ASSESSEE UNDER THE AGREEMENT IN RESPECT OF FOUR -LANE IS NOT ONLY REQUIRED TO STRENGTHEN THE LANES SO AS TO MAKE IT C OMPATIBLE TO COMBAT THE HEAVY FLOW OF TRAFFIC BUT ALSO TO BUILD-UP THE SERVICE LANE FOR THE DISCHARGING OF OBLIGATION UNDER THE AGREEMENT. ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 18 THE LD. AR RELIED UPON THE FOLLOWING JUDGMENT : 09 ON THE BASIS OF THE ABOVE IT WAS SUBMITTED THAT IN ALL THE ABOVE JUDGMENTS IT WAS THE CONSISTENT VIEW TAKEN BY THE HONBLE HIGH COURTS AND THE TRIBUNALS THAT THE STRENGTHENIN G AND WIDENING ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 19 OF EXISTING ROAD WOULD COME WITHIN THE PURVIEW OF T HE LAYING DOWN OF INFRASTRUCTURE AND HENCE THE ASSESSEE IS ENTITLE D TO THE BENEFIT U/S.80IA OF THE ACT. IT WAS UNANIMOUSLY HELD BY TH E COURTS IN THE ABOVE JUDICIAL PRECEDENTS THAT IF THE ASSESSEE IS M AINTAINING AND OPERATING THE EXISTING INFRASTRUCTURE THEN DEDUCTIO N U/S.80IA IS AVAILABLE. IT WAS FURTHER CONTENDED BY THE LD. AR WAS THAT IF THE ASSESSEE IS REQUIRED TO MAINTAIN THE WORK OF CEMENT ING, STRENGTHENING AND LAYING DOWN THE ROAD, THEN ALSO T HE ASSESSEE IS ENTITLED TO THE DEDUCTION U/S.80IA. OUR ATTENTION WAS ALSO DRAWN TO THE ORDER PASSED BY THE AO IN THE PREVIOUS YEAR, WH EREIN THE AO HAS HELD THAT THE ASSESSEE IS ENTITLED TO THE DEDUC TION U/S.80IA ON STRENGTHENING OF THE FOUR LANE FROM 28 KMS TO 67 KM S. ON THE PRINCIPLE OF CONSISTENCY, FOLLOWING THE PRINCIPLE OF CONSISTENCY THE ASSESSEE IS ENTITLED TO THE RELIEF FROM THIS TRIBUN AL. 10. PER CONTRA THE LD. DR HAD RELIED UPON THE DEFIN ITION OF SECTION 80IA(4) AND THE EXPLANATION THERETO AND ALS O RELIED UPON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COU RT CITED BY THE ASSESSEE MORE PARTICULARLY TO PARAS 89 AND 90 OF TH E SAME. ON THE BASIS OF THE ABOVE IT WAS SUBMITTED THAT EVEN THE H ONBLE JURISDICTIONAL HIGH COURT HAD MADE A DISTINCTION BE TWEEN LAYING DOWN OF THE ADDITIONAL ROAD AND THE STRENGTHENING O F THE EXISTING ROAD AND HAD ALSO RESTRICTED THE CLAIM OF THE ASSES SEE IN THE MATTER OF KOTARI CONSTRUCTION P. LTD (SUPRA), WAS ONLY WIT H RESPECT TO THE LAYING OF THE ADDITIONAL ROAD AND THE REPAIRING AND MAINTENANCE OF THE EXISTING ROAD HAS BEEN KEPT OUTSIDE THE PURVIEW OF SECTION 80IA OF THE ACT. THE LD. DR HAS FURTHER POINTED OUT THA T THE RELIANCE OF ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 20 THE ASSESSEE ON MAINTENANCE AND LAYING DOWN OF THE SERVICE ROAD FOR THE PURPOSE OF CLAIMING THE BENEFIT OF SECTION 80IA IS UNFOUNDED BECAUSE THE SERVICE ROADS CANNOT BE EQUATED WITH TH E MAIN LANE. THE MAINTENANCE OF EXISTING MAIN LANE FROM 28 TO 68 KMS WAS THE ESSENTIAL PURPOSE OF THE AGREEMENT FOR WHICH THE CO NTRACT WAS GIVEN BY NHAI TO THE ASSESSEE AND THEREFORE THE BENEFIT C ANNOT BE GIVEN TO THE ASSESSEE. 11.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE RECORD AS ALSO THE CASE LAWS CITED BY BOTH THE PARTIES. B EFORE WE DEAL WITH THE FACTUAL ASPECT OF THE MATTER, IT IS RELEVANT TO KEEP IN MIND THE PURPOSES OF INTRODUCTION OF SECTION 80IA IN THE STA TUTE BOOK. IN OUR UNDERSTANDING THE PURPOSE OF INTRODUCTION OF SECTIO N 80IA TO THE STATUTE BOOK WAS TO ENCOURAGE AND ACCELERATE THE DE VELOPMENT OF NEW INFRASTRUCTURE IN THE COUNTRY. WITH THAT OBJEC TIVE IN MIND, THE LEGISLATURE THOUGHT IT APPROPRIATE TO GIVE THE DEDU CTION TO SUCH UNDERTAKING WHICH ARE INVOLVED IN DEVELOPMENT AND C REATION OF THE INFRASTRUCTURE. SECTION 80IA(4) PROVIDES CIRCUMSTA NCES WHEN THIS SECTION SHALL BE APPLICABLE . 11.2 FROM THE READING OF 80IA(4)(I)(B) IT IS AMPLY CLEAR THAT, IF AN ENTERPRISE HAS ENTERED INTO AGREEMENT WITH CENTRAL GOVERNMENT, STATE GOVERNMENT OR LOCAL AUTHORITY, FOR DEVELOPING, OPER ATING AND MAINTAINING OF A NEW INFRASTRUCTURE, THEN SAID ASSE SSEE WOULD BE ENTITLED FOR DEDUCTION U/S.80IA OF THE ACT. THE I NFRASTRUCTURE FACILITIES IS DEFINED IN EXPLANATION TO SECTION 80I A(4), AS UNDER : EXPLANATION FOR THE PURPOSES OF THIS CLAUSE, INFRA STRUCTURE FACILITY MEANS ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 21 (A) A ROAD INCLUDING TOLL ROAD, A BRIDGE OR A RAIL SYSTEM ; (B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER AC TIVITIES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT ; (C) A WATER SUPPLY PROJECT, WATER TREATMENT SYSTEM, IRRIGATION PROJECT, SANITATION AND SEWERAGE SYSTEM OR SOLID WASTE MANAG EMENT SYSTEM ; (D) A PORT, AIRPORT, INLAND WATERWAY, INLAND PORT O R NAVIGATIONAL CHANNEL IN THE SEA ; 12. FROM A CONJOINT READING OF SECTION 80IA(4)(B) AND THE EXPLANATION TO 80IA , IT IS CLEAR THAT IF AN ASSES SEE IS (I) DEVELOPING OR (II) OPERATING AND MAINTAINING OR (III) DEVELOPI NG, OPERATING AND MAINTAINING ANY NEW INFRASTRUCTURE FACILITY ETC., I N THAT EVENTUALITY THE ASSESSEE IS ENTITLED TO BENEFIT U/S.80IA OF THE ACT. IN THE PRESENT CASE WHAT THE ASSESSEE IS OPERATING AND MAINTAINING AN ALREADY EXISTING FOUR-LANE ROAD BY STRENGTHENING IT. THER EFORE, IN OUR UNDERSTANDING NO NEW INFRASTRUCTURE COME INTO EXIST ENCE AND MERELY ASSESSEE HAD MADE IMPROVEMENT AND STRENGTHEN THE EX ISTING INFRASTRUCTURE, WOULD NOT ENTITLE IT FOR THE BENEFI T UNDER SECTION 80IA. IN VIEW OF THE ABOVE PLAIN READING OF LAW, W E ARE OF THE CONSIDERED OPINION THAT THE CASE OF THE ASSESSEE WI TH RESPECT TO STRENGTHENING AND MAINTAINING OF THE EXISTING ROAD FOUR LANE FROM 28KMS TO 67 KMS DO NOT FALL WITHIN THE FOUR CORNERS OF SECTION 80IA AND AS SUCH THE ASSESSEE IS NOT ENTITLED TO ANY REL IEF ON THIS COUNT. WITH RESPECT TO OTHER STRETCH OF INFRASTRUCTURE, TH ERE IS NO QUARREL THAT THE ASSESSEE HAS LAID DOWN THE NEW INFRASTRUCT URE PURSUANT TO THE AGREEMENT ENTERED BETWEEN THE ASSESSEE AND NHAI , THE ASSESSING OFFICER HAS GRANTED THE BENEFIT OF 50% OF DEDUCTION , ONLY ON THE PREMISE, THAT THE ASSESSEE HAD LAID DOWN THE NEW ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 22 INFRASTRUCTURE FROM 67 KM TO 121 KM . EVEN OTHERWIS E , THIS ISSUE OF LAYING DOWN OF THE ADDITIONAL LANES ALONG WITH THE INTEGRATION AND ASSIMILATION OF THE EXISTING 2 LANES IS NO MORE RE S- INTEGRA, AS IT ACCOMMODATED BY THE BOARD IN ITS CIRCULAR MENTIONED BY THE ASSESSING OFFICER AND THE APPELLATE AUTHORITY. 13. FURTHER IF WE EXAMINE THE FACTS OF THE PRESENT CASE , IT IS CLEAR FROM PAGE 115 ONWARDS THAT THE WORK UNDERTAKEN BY T HE ASSESSEE WERE IN THE NATURE OF OPERATING AND MAINTAINING OF THE EXISTING ROADS. FOR THE PURPOSES OF CLARIFY WE ARE REPRODUC ING HEREIN THE SCOPE OF WORK WHICH IS AS UNDER : ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 23 14. FROM PERUSAL OF THE ABOVE IT IS CLEAR THAT THE ASSE SSEE IS OPERATING AND MAINTAINING THE ALREADY EXISTING ROAD FOR WHICH THE ASSESSEE IS ENTITLED TO ANNUITY ALONG WITH THE ANNU ITY FOR DEVELOPING, MAINTAINING AND OPERATING THE OTHER PART OF THE ROA D. ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 24 15. WITH REGARD TO THE ARGUMENT OF THE ASSESSEE THAT TH E SERVICE LANE WAS DEVELOPED BY THE ASSESSEE PURSUANT TO THE AGREEMENT WE HAVE CONSIDERED OPINION DEFINITION OF SERVICE ROAD AND MAIN LANE AS MENTIONED IN SCHEDULE D TO AGREEMENT, ARE DIFFERENT AND LAYING DOWN OF THE SERVICE LANE CANNOT BE ENTITLED THE ASS ESSEE TO CLAIM THE BENEFIT OF LAYING DOWN OF THE NEW INFRASTRUCTURE. WE DO NOT FIND THAT THE BENEFIT OF MAINTENANCE AND CREATION OF SER VICE ROAD CAN BE GIVEN TO THE ASSESSEE. 16. THE NATURE OF ACTIVITY WHICH WAS UNDERTAKEN BY THE ASSESSEE AS WE HAD UNDERSTOOD FROM SCOPE OF WORK (SUPRA) WAS ONLY OF MAINTAINING AND OPERATING OF THE EXISTI NG FOUR LANES 28 KM TO 67KMS. IF WE ALLOW THIS KIND OF ACTIVITY TO FALL WITH THE AMBIT OF SECTION 80IA, IT WILL NOT BE IN C ONSONANCE WITH THE AIMS AND OBJECTS FOR WHICH THIS SECTION HAS BEE N INTRODUCED. THE EXPLANATION TO SECTION 80IA(4) PROVIDES THE DE VELOPMENT OF HIGHWAY PROJECT INCLUDING HOUSING PROJECT TO BE INT EGRAL PART OF HIGHWAY PROJECTS. HYPOTHETICALLY IF WE PERMIT THE CLAIM OF THE ASSESSEE FOR REPAIRING AND MAINTENANCE OF THE EXISTING INFRASTRUCTURE THEN THIS PROVISION WOULD BE SUBJECT ED TO MISUSE AND UNSCRUPULOUS CONTRACTORS WOULD CLAIM BENEFIT OF 80I A, WHO WERE INTO REDEVELOPING, REPAIR OR RE-PLASTER T HE EXISTING HOUSES. IN OUR UNDERSTANDING THE SAME CANNOT BE PE RMITTED AS IT WOULD BE BEYOND THE SCOPE OF SECTION 80IA OF THE ACT. FURTHER T HERE IS A DISTINCTION BETWEEN THE WIDENING OF THE E XISTING ROAD BY CONSTRUCTING ADDITIONAL LANES AS PART OF THE HIGHWAYS PROJECT ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 25 VIS-A-VIS, IMPROVING, MAINTAINING, REFURBISHING THE EXISTING ROAD. CIRCULAR NO.4 OF 2010 OF THE CBDT ONLY PROVIDES TH E SCOPE OF SECTION 80IA TO INCLUDE WITHIN ITS AMBIT THE WIDENI NG OF THE EXISTING ROAD, BUT THE ROAD WHICH EXISTS OR THE INFRASTRUCTU RE WHICH IS EXISTING CANNOT FORM PART OF THE DEVELOPMENT OF THE INFRASTRUCTURE BECAUSE THE INFRASTRUCTURE WHICH IS ALREADY DEVELOP ED IS INCAPABLE OF BEING DEVELOPED AGAIN. HENCE THE ASSESSEE IS NOT ENTITLED TO ANY RELIEF PERTAIN TO DISALLOWANCE RELATING TO EXISTIN G FOUR LANES 28 KM TO 67KMS. 16.1 NOW WE WILL DISCUSS THE DECISION CITED BY THE ASSESSEE. IN THE FIRST JUDGMENT RELIED UPON BY THE ASSESSEE WAS KOTARKI CONSTRUCTION P. LTD (SUPRA). IN THIS REGARD, THE L D. AR SUBMITTED THAT THE RELAYING OF ROADS AND MAINTENANCE OF ROADS WOULD FALL WITHIN THE FOUR CORNERS OF SECTION 80IA. THE FINDI NGS OF THE HONBLE JURISDICTIONAL HIGH COURT IN PARA 18 AND 19 HAVE BEEN REPRODUCED ELSEWHERE IN THIS ORDER. IF WE LOOK INTO THE FACTS WHICH ARE MENTIONED IN PARA 7 OF THE JUDGMENT, WHEREIN IT IS STATED AS UNDER : IT IS FURTHER STATED BY THE EXECUTIVE ENGINEER PWD, BIDAR THAT OUT OF THE TOTAL WORK OF RS.1,94,93,022/- WORK TO T HE EXTENT OF RS.4,88,236/- PERTAINS TO REPAIRS AND THE WORK RELA TING TO THE CONSTRUCTION OF ROAD IS RS.1,90,04,786/-. IF THE ABOVE FACTS ARE READ ALONG WITH THE FINDING RECORDED BY THE HONBLE HIGH COURT IN PARA 18 AND 19, IT IS CLE AR THAT THE WORK OF IMPROVEMENT OF ROAD, RELAYING, REPAIR OF ROADS E TC., HAVE BEEN EXCLUDED WHILE COMPUTING THE DEDUCTION U/S.80IA(4) OF THE ACT. IN ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 26 THE PRESENT CASE, THE FIRST CLAIM AS DISCUSSED HERE IN ABOVE WAS IN RESPECT OF REPAIR OF ROAD, RELAYING OF ROAD AND IMP ROVEMENT OF ROAD AND THEREFORE THE ACTION OF THE LOWER AUTHORITIES I S IN CONFORMITY WITH THE LAW LAID DOWN BY THE HONBLE JURISDICTIONA L HIGH COURT. IN OUR UNDERSTANDING, THE JUDGMENT RELIED UPON BY T HE ASSESSEE IS IN FACT AGAINST THE ASSESSEE. 16.2 THE NEXT JUDGMENT RELIED UPON BY THE AR WAS AC IT V. HO HUP SIMPLEX JV (92 TAXMANN.COM 106) OF THE KOLKATA TRIBUNAL OF THE TRIBUNAL. THE FACTS OF THE SAID DECISION ARE N OT APPLICABLE TO THE FACTS OF THE PRESENT CASE AS, THE DISPUTE IN THE DE CISION WAS PERTAINING TO WHETHER THE ASSESSEE WHO WAS AWARDED THE WORK OF CONTRACT TO CONSTRUCT THE ROAD AND WAS PROCURING TH E RAW MATERIAL AND MAKE ARRANGEMENTS FOR WATER, POWER AND MACHINER Y, WAS ENTITLED TO DEDUCTION U/S.80IA OR NOT. IN THAT CON TEXT, THE COORDINATE BENCH HAD HELD THAT THE ASSESSEE WAS ENTITLED TO TH E BENEFIT OF SECTION 80IA OF THE ACT, AS IT DEVELOPED THE NEW I NFRASTRUCTURE. IN THE PRESENT CASE, THE DISPUTE IS WHETHER THE AS SESSEE HAS DEVELOPED, MAINTAINED AND OPERATED A NEW INFRASTRUC TURE OR NOT AS WE HAVE NOTICED HEREIN ABOVE, THE ASSESSEE HERE HAS NOT CREATED ANY NEW INFRASTRUCTURE RATHER HAD ONLY IMPROVED AND MAI NTAINED THE EXISTING INFRASTRUCTURE FOR THE STRETCH 28 TO 67 KM S OF THE SAID HIGHWAY. THEREFORE THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF SECTION 80IA(4). HENCE THIS DECISION IS NOT APPLIC ABLE. 16.3 THE NEXT DECISION RELIED UPON BY THE ASSESSEE IS IN THE MATTER OF ROHAN & RAJDEEP INFRASTRUCTURE V. ACIT OF ITAT, PUNE [ITA.1214/PN/2010]. THE FACTS OF THIS CASE ALSO AR E DIFFERENT AS ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 27 THAT WAS A CASE OF WIDENING OF ROAD AND LEVELLING AND INTEGRATING OF THE EXISTING ROAD THEREAFTER. PARA 8 OF THE ABOVE D ECISION SHOWS THAT THE CASE WAS PERTAINING TO INCREASING THE HEIGHT OF THE ROAD AND WIDENING BY ONE METER VIDE SHOULDERS BY USING DALME RA KANKAR IN 50 CM THICKNESS IN THE PRESENT CASE, THE FIRST STRETCH OF 28 TO 67 KMS DO NOT INVOLVED WIDENING OF ROAD, BUT STRENGTHENING OF THE EXISTING INFRASTRUCTURE. HENCE THIS DECISION IS NOT APPLICA BLE TO THE CASE ON HAND BEFORE US. 16.4 THE NEXT DECISION RELIED UPON BY THE ASSESSEE IS ACIT V. RAJAHMUNDRY EXPRESSWAY LTD [ITA NO.2798/DEL/2011, DTT.07.07.2015]. THIS DECISION ALSO PERTAINS TO DE VELOPMENT OF PROJECT AND WIDENING OF ROAD. THE TRIBUNAL RELIED UPON THE CBDT CIRCULAR AND HELD THE ACTION OF THE CIT (A) AS CORR ECT. HOWEVER, IN THE PRESENT CASE, THERE IS NO WIDENING OF THE ROAD. HENCE, IT IS NOT APPLICABLE. 16.5 THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE TRIBUNAL IN THE MATTER OF VIJAY INFRASTRUCTURE LTD V. ACIT (ITA.254/LKW/2015, DT.30.10.2015], WHERE IN PARA 14 .2, THE FACTS WERE MENTIONED, AS UNDER : 14.2 FROM THE ABOVE PARA OF THIS TRIBUNAL ORDER, IT COMES OUT THAT IF THE CONTRACTS INVOLVES DESIGN, DEVELOPMENT, OPERATING & MAINTENANCE, FINANCIAL INVOLVEMENT AND DEFECT CORRE CTION AND LIABILITY PERIOD, THEN SUCH CONTRACTS CANNOT BE CAL LED AS SIMPLE WORKS CONTRACT TO DENY THE DEDUCTION UNDER S. 80IA AND PROFIT FROM THE CONTRACTS WHICH INVOLVES DESIGN, DEVELOPME NT, OPERATING & MAINTENANCE, FINANCIAL INVOLVEMENT, AND DEFECT CORRECTION AND LIABILITY PERIOD IS TO BE ACCEPTED A S DEVELOPMENT AND CANNOT BE SAID TO BE CONTRACT SIMPL ICITOR TO APPLY THE EXPLANATION. IN THE PRESENT CASE, CATEGOR ICAL FINDING HAS BEEN GIVEN BY CIT (A) THAT THE ASSESSEE WAS ENG AGED IN ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 28 DEVELOPMENT OF ROAD AND IS NOT A MERE CONTRACTOR AS HE HAD DEPLOYED HIS OWN CAPITAL, USED HIS OWN MANAGEMENT A ND EXPERTISE IN MAINTENANCE AND HAD TO BEAR THE RISK A ND DEFECT CORRECTION. THESE FINDINGS OF CIT (A) COULD NOT BE CONTROVERTED BY LEARNED DR OF THE REVENUE AND THERE FORE, THIS TRIBUNAL ORDER RENDERED IN THE CASE OF KOYA & CO. ( SUPRA) IS SQUARELY APPLICABLE BECAUSE THE FACTS ARE SIMILAR. IN THE ORDER OF CIT (A), HE HAS FOLLOWED THIS TRIBUNAL ORDER AND VARIOUS OTHER JUDICIAL PRONOUNCEMENTS AS NOTED BY HIM IN HI S ORDER, AS REPRODUCED ABOVE. CONSIDERING THIS FACTUAL AND LEGA L POSITION, WE FIND NO INFIRMITY THAT THE ORDER OF CIT (A) ON T HIS ASPECT THAT IN THE FACTS OF THE PRESENT CASE, IT CANNOT BE SAID THAT THE ASSESSEE COMPANY WAS MERE A CONTRACTOR AND NOT A DE VELOPER. THEREFORE, ON ISSUE NO. 3, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A). THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSE SSEE. FROM A PERUSAL OF THE ABOVE IT IS CLEAR THAT THE DI SPUTE IN THE SAID CASE WAS IN RESPECT TO WHETHER A DEVELOPER OF INFRA STRUCTURE IS ENTITLED TO THE BENEFIT OF SECTION 80IA OR NOT. HOWEVER, THE FACTS IN THE PRESENT CASE ARE DIFFERE NT AND HENCE THIS DECISION IS NOT APPLICABLE. 16.6 ANOTHER DECISION REFERRED BY THE ASSESSEE WAS IN THE MATTER OF ADHUNIK INFRASTRUCTURE P. LTD, [ITA.1281/KOL/2015, DT.23.05.2018], IN PARA 9.4, THE TRIBUNAL HAS DISCU SSED THE VARIOUS DECISIONS AND CAME TO THE CONCLUSION THAT A DEVELOP ER IS ENTITLED TO THE BENEFIT OF SECTION 80IA. IN THE PRESENT CASE, THE FACTS IN DISPUTE BEFORE U S PERTAINS TO WHETHER A DEVELOPER WHO HAS MAINTAINED AND OPERATED AN EXISTING INFRASTRUCTURE IS ENTITLED TO BENEFIT OF SECTION 80 IA(4) OR NOT. AS THE ASSESSEE HERE HAS NOT LAID DOWN OR CREATED A NEW IN FRASTRUCTURE, FROM 28 TO 67 KM OF THE HIGHWAY, THEREFORE THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF SECTION 80IA. 16.7 ONE OTHER DECISION RELIED UPON BY THE ASSESSEE IS IN THE MATTER OF UP STATE BRIDGE CORPORATION LTD V. DCIT [ 62 ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 29 TAXMAN.COM 61] OF LUCKNOW TRIBUNAL, WHEREIN THE TRI BUNAL HAS RECORDED THAT THE PRINCIPLE OF CONSISTENCY IS REQUI RED TO BE FOLLOWED. AT THIS STAGE, IF WE LOOK INTO THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT V. M/S. GMR TUNI ANAKAPALLI EXPRESSWAY P. LTD [ITA.1132 & 1133/BANG/2018, DT.10.08.2018, COPY OF WHICH WAS FILED ALONG WITH THE WRITTEN SUBMISSION, WE FIND TH AT THE TRIBUNAL HAS NOT DISCUSSED THE FACTS OF THE PRESENT CASE AND HAD MERELY FOLLOWED THE DECISION PASSED IN THE EARLIER ORDER W HERE THE FACTS IN THAT CASE WERE OF WIDENING THE TWO LANE CARRIAGE WA Y INTO FOUR LANE AND THUS THE ASSESSEE WAS FOUND TO BE ELIGIBLE FOR THE BENEFIT U/S.80IA OF THE ACT. 16.8 THE SUBMISSION OF THE ASSESSEE THAT THE PRINCIPLE OF CONSISTENCY IS REQUIRED TO BE FOLLOWED. IN OUR VIE W THE PRINCIPLE OF CONSISTENCY IS MERELY A GUIDING FACTOR TO DECIDE TH E ISSUE IN THE ABSENCE OF HIGHER WISDOM AVAILABLE IN THE FORM OF B INDING DECISION OF THE SUPERIOR COURT. IN THE PRESENT CASE, AS MEN TIONED HEREIN ABOVE, THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF KOTARKI CONSTRUCTIONS (P.) LTD.(SUPRA) IN PARAS 18 AND 19 HELD AS UNDER : 18. THE SAID EXPLANATION AS EXPLAINED IN THE MEMORANDU M OF FINANCE BILL 2007 AS QUOTED ABOVE, CLEARLY LAYS DOW N THE GUIDELINES WHEN IT SAYS, ' IN CONTRAST TO THIS, A P ERSON, WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON (INCLUDI NG GOVERNMENT OR AN UNDERTAKING OR ENTERPRISE REFERRED TO IN SECTION 80-IA) FOR EXECUTING WORKS CONTRACT, WILL N OT BE ELIGIBLE FOR THE TAX BENEFIT UNDER SECTION 80-IA', INTENDED TO DENY THE BENEFIT OF SUCH DEDUCTION ONLY TO THE SUB- CONTRACTORS, WHO WERE EXECUTING SUCH WORKS CONTRACTS ON BEHALF O F THE PRINCIPAL CONTRACTORS AND PURE AND SIMPLE THEY BEIN G THE SUB- CONTRACTORS, NATURALLY, THE DOUBLE DEDUCTION IN THE HANDS OF PRINCIPAL CONTRACTORS AND SUB- CONTRACTORS COULD NO T HAVE ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 30 BEEN ALLOWED BY THE LEGISLATURE U/S.80-IA(4) OF THE ACT AND THAT IS WHY THE SAID EXPLANATION RESTRICTING THE DE DUCTION OF SECTION 80-IA(4) OF THE ACT ONLY TO THE PRINCIPAL W ORKS CONTRACTOR OF DEVELOPMENT OF INFRASTRUCTURE FACILIT Y WHICH INCLUDED LAYING OF ADDITIONAL LANES BY ROAD WIDENIN G AS CLARIFIED BY CBDT, COULD NOT HAVE BEEN DENIED SUCH DEDUCTION ON THE ANVIL OF THE SAID EXPLANATION AS SUBMITTED B Y THE LEARNED COUNSEL FOR THE REVENUE. THE SAID CONTENTIO N THEREFORE IS LIABLE TO BE REJECTED AND IS HEREBY RE JECTED. 19. THE ORIGINAL ASSESSMENT ORDER PASSED IN THE PRESEN T CASE U/S.143(3) OF THE ACT CLEARLY SHOWS THE COMPLETE AN D METICULOUS APPLICATION OF MIND BY THE ASSESSING AUT HORITY TO ALL THE RELEVANT FACTS, CERTIFICATES ISSUED BY THE EXECUTIVE ENGINEERS AND NATURE OF WORK UNDERTAKEN BY THE PETI TIONER- ASSESSEE AND THE WORKS LIKE IMPROVEMENT OF ROADS, R E-LAYING OF THE ROADS, REPAIR OF THE ROADS ETC., HAVE BEEN EXCL UDED WHILE COMPUTING THE DEDUCTION U/S.80-IA(4) OF THE ACT. TH EREFORE, THE DEDUCTION ALLOWED TO THE EXTENT OF 68.75% ONLY FOR THE WORKS WHICH FELL WITHIN THE FOUR CORNERS OF SECTION 80-IA(4) OF THE ACT COULD NOT HAVE BEEN DISALLOWED OR INTENDED TO BE DISALLOWED BY RESORT TO SECTION 147/148 OF THE ACT UNDER THE GARB OF SUBSEQUENT ASSESSMENT ORDER PASSED FOR THE SUBSEQUENT A.Y.2013-14, WHICH ALSO PRIMA FACIE INDI CATES THAT THE ASSESSING AUTHORITY HAS BEEN SWAYED BY THE WORD S 'IMPROVEMENT, REPAIRS AND WIDENING (SIC !) OF ALREA DY EXISTING ROADS'. WHILE THE WIDENING OF THE ROADS IS INTENDED TO BE INCLUDED WITHIN THE AMBIT OF 'INFRASTRUCTURE FACILI TY' BY THE CBDT, THE ASSESSING AUTHORITY INTENDS TO DENY THE S AID CLAIM UNDER THE SWAY OF THE WORD 'WORKS CONTRACTS' AS EMP LOYED IN THE EXPLANATION INSERTED BY THE FINANCE ACT, 2007. SUCH SWEEPING AND GENERAL WORDS BEFORE BEING USED TO INV OKE THE REASSESSMENT POWERS U/S. 147/148 OF THE ACT, THE AS SESSING AUTHORITY HAS TO RECORD THE DETAILED REASONS WITH T HE RELEVANT FACTS EXISTING ON RECORD WITHIN THE PARAMETERS OF S ECTION 147 OF THE ACT, WHICH WOULD CLEARLY DISENTITLE THE ASSE SSEE FROM BEING GIVEN THAT DEDUCTION OR WOULD RENDER THE EARL IER ALLOWING OF SUCH DEDUCTION BY THE ORIGINAL ASSESSIN G AUTHORITY EX-FACIE ILLEGAL. THE HONBLE JURISDICTIONAL HIGH COURT HAD SUCCINCTL Y HELD THAT IF THE CLAIM OF THE ASSESSEE FALLS WITHIN SECTION 80IA , THEN THE ASSESSEE ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 31 IS ENTITLED TO DEDUCTION. HOWEVER IN THE SAID CASE THE AO HAD DENIED THE REPAIR AND MAINTENANCE EXPENDITURE FROM THE PURVIEW OF SECTION 80IA AND THEREFORE THE HONBLE HIGH COURT H AS HELD THAT RELAYING AND STRENGTHENING OF THE EXISTING INFRASTR UCTURE WOULD NOT FALL WITHIN 80IA. 16.9. IN VIEW OF THE ABOVE, ONCE THERE IS A BINDING JUDG MENT OF THE HONBLE JURISDICTIONAL HIGH COURT, OPERATING IN THE FIELD AND APPLICABLE TO THE FACTS OF THE CASE, THERE IS NO PU RPOSE OF PERPETUATING THE ERROR COMMITTED BY THE AO / CIT (A ) IN EARLIER YEARS. ACCORDINGLY WE DO NOT AGREE WITH THE CONTEN TION OF THE ASSESSEE THAT FOLLOWING THE PRINCIPLE OF CONSISTENC Y THE CLAIM OF THE ASSESSEE IS REQUIRED TO BE ALLOWED. IN THE RESULT GROUND NO 1&2 OF ASSESSEE APPEAL ARE DISMISSED. 17. IN THE PRESENT CASE, AS MENTIONED HEREIN ABOVE, THE FACTS ARE ENTIRELY DIFFERENT. THERE WAS NO EXPANSION OF TWO LANE INTO FOUR LANE BY THE ASSESSEE FOR 28 KMS TO 67 KMS AND AS SU CH THE BENEFIT OF THE DECISION OF THE COORDINATE BENCH CANNOT BE EXTE NDED. MOREOVER, THE ASSESSEE HAS NOT POINTED OUT ANY FACTS BEFORE U S WHICH ENTITLE THE ASSESSEE TO THE BENEFIT OF SECTION 80IA FOR STRENGT HENING, REPAIRING AND MAINTAINING THE EXISTING INFRASTRUCTURE FROM 28 TO 67 KMS. 18. THE CIT (A) HAS GRANTED ADHOC BENEFIT OF 25% TO THE ASSESSEE AND FOR THAT THE ASSESSEE IS IN APPEAL BEFORE US. AS WE HAVE HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT U/ S.80IA OF THE ACT IN RESPECT OF THE FIRST ACTIVITY, VIZ., STRENGTHENING OF EXISTING ROAD,. WE MAY LIKE TO POINT OUT THAT NATIONAL HIGHWAYS AUTHOR ITY OF INDIA ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 32 (NHAI) AT THE TIME OF FIXING AND INVITING THE BID M UST HAVE MADE PROJECTIONS OF AMOUNT SPENT BY THE ASSESSEE AND ON THAT BASIS ONLY IT MUST HAVE ARRIVED AT THE FIGURE OF GRANTING THE ANNUITY OF RS.400 CRORES FOR EVERY SIX MONTHS FOR THE COMPOSITE PROJE CT. NO BIFURCATION OF THE REVENUE EARNED BY THE ASSESSEE F ROM THE EXISTING FOUR LANE CARRIAGEWAY AND FROM THE OTHER STRETCH O F LAYING DOWN AND WIDENING THE EXISTING 2 WAY CARRIAGE WAY TO FOU R LANE WAS AVAILABLE WITH THE LOWER AUTHORITIES. THE AO BASED ON THE ADHOC WORKING HAD DISALLOWED TO 50% OF TOTAL REVENUE ON THE PRESUMPTION THAT 50% OF REVENUE BELONGED TO THE INF RASTRUCTURE WHICH WAS ALREADY EXISTING WHEREAS E COMMISSIONER O N APPEAL REDUCED IT TO 25% ON THE BASIS THAT ONLY 25% OF THE TOTAL REVENUE BELONGS TO THE EXISTING 4 LANE INFRASTRUCTURE , FEE LING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 19. ON PERUSAL OF THE ORDERS PASSED BY THE LOWER AUTHOR ITIES WERE NOT ABLE TO COMPREHEND THE BASIS OF ARRIVING AT THE FIGURE OF 50% OR 25% . THERE IS NO RATIONAL FOR THE LOWER AUTHORITIE S TO ESTIMATE THE REVENUE IN RESPECT TO THE INFRASTRUCTURE ALREADY IN PLACE , SPECIALLY UNDER THE CIRCUMSTANCES WHEN THE RECORDS ARE AVAILA BLE WITH THE NHAI, WHICH HAD GRANTED THE ENTITY AND CONTRACT OF THE ASSESSEE. IN THE RESULT THE WORKING DONE BY BOTH THE LOWER AUTHO RITIES WERE WITHOUT ANY BASIS AND WAS DONE ON ADHOC BASIS IN OU R VIEW BOTH THE AUTHORITIES SHOULD HAVE CALLED THE RECORD FROM THE NHAI AND THEREAFTER DECIDED THE MATTER. 20. IN THE LIGHT OF THE ABOVE WE DEEM IT APPROPRIATE TO REMAND THE MATTER TO THE CIT (A) WITH THE FOLLOWING DIRECTION. WITH THE ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 33 DIRECTION TO CALL RECORDS FROM NATIONAL HIGHWAYS AU THORITY OF INDIA PERTAINING TO FIXING OF ANNUITY AND FIND OUT : A) WHAT WAS THE BASIS OF FIXING ANNUITY WITH RESPEC T TO STRENGTHENING OF EXISTING 4 LANE AND B) WHAT WAS THE BASIS FOR FIXING THE ANNUITY FOR THE SECOND CATEGORY NAMELY LAYING DOWN 4 LANES AFTER WI DENING THE EXISTING 2 LANES TO 4 LANES AS PER THE AGREEMEN T 21. BASED ON THE ABOVE EXERCISE AND REPLY IF ANY RECEIVED FROM THE ASSESSEE , THE COMMISSIONER IS TO DECIDE THE DE DUCTION WHICH THE ASSESSEE IS ENTITLED IN RESPECT OF WIDENING OF ROAD FOR THE PROJECT 67 KMS TO 121 KMS . HOWEVER IN RESPECT OF T HE ANNUITY ACTUALLY RELATABLE TO THE FIRST CATEGORY NAMELY MAI NTENANCE AND OPERATION OF EXISTING FOUR LANE OF 28 TO 67 KMS TH E ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION NEEDLESS TO SAY T HAT THE ABOVE SAID EXERCISE SHALL BE DONE BY THE CIT (A) AFTER GIVING THE NOTICE AND AFTER EXAMINING THE OBJECTION OF THE ASSESSEE. IN T HE RESULT GROUND NO 3-4 OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURP OSES. 22. THE IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES GROUND NO.2 OF REVENUE APPEAL IN 1130 & 1131/BANG/2 018 IS AS UNDER : 2. THE LD. CIT (A) ERRED IN ALLOWING THE CLAIM U/S. 80IA WHEN THE CONTRACT WORK PERFORMED DOES NOT FALL WITHIN THE DE FINITION OF NEW INFRASTRUCTURE FACILITY U/S.80IA AND IS IN CONTRAVE NTION TO NOT FALL WITHIN ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 34 THE DEFINITION OF NEW INFRASTRUCTURE FACILITY U/S.8 0IA AND IS IN CONTRAVENTION TO CGDT CIRCULAR NO.4/2010 DATED 18.0 5.2010. 23. IN THIS REGARD, THE CIT (A) IN PARA 4.7 HAS ALLOWED THE CLAIM OF THE ASSESSEE BY REVERSING THE ORDER OF THE AO HO LDING THAT THE STRENGTHENING OF THE EXISTING TWO LANES FROM 67 /0 TO 121/0 KMS AND WIDENING THEREOF TO FOUR LANES CARRIAGE-WAY IS ELIGIBLE FOR DEDUCTION U/S.80IA OF THE ACT. 24. THE LD. DR SUBMITTED THAT THE CONTRACT ENTERED INT O BETWEEN THE ASSESSEE AND NHAI WAS A COMPOSITE CONTRACT AND THEREFORE EVEN THE STRENGTHENING AND WIDENING OF TW O LANE CARRIAGE WAY TO FOUR LANE CARRIAGE WAY WOULD NOT CO ME WITHIN THE PURVIEW OF SECTION 80IA. 25. ON THE CONTRARY, THE LD. AR HAS SUBMITTED THAT AS P ER THE CIRCULAR OF THE CBDT NO.4/2010, DT.18.05.2010, THE WIDENING OF ROAD WOULD COME WITHIN THE PURVIEW OF DEVELOPMEN T OF NEW INFRASTRUCTURE AND THEREFORE THE ASSESSEE IS EN TITLED TO THE BENEFIT U/S.80IA. FOR THAT PURPOSES THE ASSESSEE R ELIES UPON THE DECISION OF THE COORDINATE BENCH IN THE MATTER OF SOMDUTT BUILDERS-NCC (JV) V. ACIT [ITA NO.148 AND 481/HYD/2009, DT.03.02.2017] AND ALSO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE MATTER OF KOTARKI CONSTRUCTION P. LTD (SUPRA). 26. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IT IS UNDISPUTED THAT THE ASSESSEE HAS UNDERTAKEN T HE WORK OF ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 35 STRENGTHENING OF EXISTING TWO LANES CARRIAGE WAY AN D HAS ALSO UNDERTAKEN THE WORK OF WIDENING THE SAME TO FOUR LA NE AND INTEGRATING THE SAME WITH THE EXISTING FOUR LANE HI GH WAY. IN THE PROCESS OF STRENGTHENING, WIDENING OF TWO LANE TO FOUR LANE, THE ASSESSEE HAS PERFORMED VARIOUS FUNCTIONS OF THE DEVELOPER AND FOR THAT PURPOSES THE ASSESSEE HAS LA ID BRIDGES, STRUCTURES, DRAINAGE, INTERSECTION, JUNCTION, MAIN LANE AND HAS THUS HAS COMPLETED THE WIDENING OF TWO LANE TO FOUR LANE FOR THE STRETCH OF 67/0 TO 121/0 KMS. AS PER SCHEDULE D TO AGREEMENT, IT IS THE OBLIGATION ON THE PART OF THE ASSESSEE TO WIDEN, ALIGN AND STRENGTHEN THE LANES. THUS IN OUR UNDERSTANDING THE ACTIVITY UNDERTAKEN BY THE ASSESS EE COMES WITHIN THE PURVIEW OF DEVELOPING THE NEW INFRASTRUC TURE. THIS ISSUE HAD ALREADY BEEN CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF KOTARKI CONSTRUCTION P. LTD (SUPRA), THE RELEVANT PARA 18 A ND 19 OF THE ORDER ARE REPRODUCED ELSEWHERE IN THIS ORDER. 27. SIMILAR VIEW WAS TAKEN BY THE COORDINATE BENCHES IN THE MATTER OF ROHAN & RAJDEEP INFRASTRUCTURE (SUPRA) AN D RAJAHMUNDRY EXPRESSWAY LTD,(SUPRA). 28. IN VIEW OF THE ABOVE, WE FIND THE ACTION OF THE CIT (A) IN CONSIDERING THE LAYING DOWN AND DEVELOPING THE TWO LANE INTO FOUR LANE AND STRENGTHENING FALLS WITHIN THE FOUR C ORNERS OF SECITON 80IA. AS WE HAD ALREADY HELD IN THE APPEAL OF THE ASSESSEE THAT IMPROVEMENT REPAIR AND MAINTENANCE OF THE OLD ITA.545, 546, 1130 & 1131/BANG/2018 PAGE - 36 INFRASTRUCTURE WOULD NOT FALL WITHIN THE REALM OF SECTION 80IA NO FURTHER ADJUDICATION IS REQUIRED IN THIS REGARD . IN THE RESULT THAT THE REVENUE APPEALS ARE DISMISSED IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF NOVEMBER, 2018. SD/- SD/- (JASON P. BOAZ) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBE R BENGALURU DATED : 26.11.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE.