THAKUR INFRAPROJECTS P. LTD, RAIGAD V. DCIT-PANVEL CIRCLE, Raigad

ITA 742/MUM/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4880 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 07-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Question of law; Rule 8D; Set aside
• Section: 14A; 80IB; 80IA; 13; 263; 12; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NOS.742 & 743/M/2018 ASSESSMENT YEARS: 2011-12 & 2012-13 M/S. THAKUR INFRAPROJECTS PVT. LTD., PLOT NO.265/1, OM SADANIKA, URAN ROAD, PANVEL, DIST. RAIGAD PAN: AACCT6451F VS. DCIT-PANVEL CIRCLE PANVEL CIRCLE DIST. RAIGAD (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI DEVENDRA JAIN, A.R. REVENUE BY : SHRI AMIT PRATAP SINGH, D.R. DATE OF HEARING : 27.10.2020 DATE OF PRONOUNCEMENT : 08.01.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED TWO APPEALS HAVE BEEN PREFERRED B Y THE ASSESSEE AGAINST THE ORDER DATED 30.11.2017 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12 & 2 012-13. 2. SINCE THE FACTS AND ISSUES INVOLVED IN THESE TWO APPEALS ARE IDENTICAL IN NATURE, HENCE THE SAME ARE TAKEN TOGET HER FOR DISPOSAL BY THIS COMMON ORDER. FOR THE SAKE OF CON VENIENCE GROUNDS RAISED BY THE ASSESSEE ARE TAKEN FROM ITA NO.743/M/2018 A.Y. 2012-13 WHICH ARE AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RETAINING THE DISALLOWANCE U/S 80IA OF RS 68,22,830/-. THE ADDITION MADE MAY PLEASE BE DELETED. ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 2 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OF LABOUR CHA RGES TO 1% OF THE TOTAL PURCHASES TO RS. 4,16,430/-. THE ADDITION RETAINED MAY PLEASE BE DELETED. 3. WITHOUT PREJUDICE TO ABOVE, IN THE FACTS AND CIR CUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN RESTRICTING TO 1% OF PURCHASES FOR A.Y. 2011-12 OF RS. 4,16,43,098/- INSTEAD OF 1% OF PURCHASES FOR A. Y. 2012-13 OF RS. 3,03,80,063/-. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAD ERRED IN UPHOLDING THE ADDITION OF RS.34,541/- U/S 14A READ WITH RULE 8D OF THE ACT. THE ADDITION RETAINED MAY PLEASE BE DELETED. 4. WITHOUT PREJUDICE, IN THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN RETAINING THE WORKING UNDER RULE 8D, WHICH IS DEFECTIVE AND ERRONEOUS. 3. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.68,22,830/- BY L D. CIT(A) AS MADE BY THE AO BY REJECTING THE CLAIM OF THE ASSESS EE UNDER SECTION 80IA OF THE ACT IN RESPECT OF PARKING LOT D EVELOPED ON CIDCO LAND AT TRUCK TERMINAL. 4. THE FACTS IN BRIEF ARE THAT AO ON THE BASIS OF C OMPUTATION OF INCOME NOTICED THAT ASSESSEE HAS CLAIMED A DEDUC TION UNDER SECTION 80IA OF THE ACT AMOUNTING TO RS.68,22,830/- . ACCORDINGLY, THE ASSESSEE WAS CALLED UPON TO FURNIS H THE AUDIT REPORT AND JUSTIFY THE CLAIM VIDE LETTER DATED 23.0 1.2015 BY THE AO. THE ASSESSEE FURNISHED THE COPY OF AUDIT REPOR T IN FORM NO.10CCB AND ALSO FILED DETAILED JUSTIFICATION FOR DEDUCTION RS.8,73,817/- FOR ASSESSMENT YEAR 2011-12 AND RS.68 ,22,830/- FOR ASSESSMENT YEAR 2012-13 IN RESPECT OF THE PROJE CT WHICH IS INTEGRAL PART OF THE HIGHWAY PROJECT. IT WAS SUBMI TTED BEFORE THE AO THAT THE PARKING LOT DEVELOPED BY THE ASSESSEE F ALLS WITHIN THE MEANING OF INFRASTRUCTURE FACILITY IN TERMS OF THE FINANCE ACT, 2001 WHICH HAS MODIFIED THE DEFINITION OF INF RASTRUCTURE FACILITY TO INCLUDE THE HIGHWAY PROJECT INCLUDING H OUSING OR OTHER AMENITIES BEING INTEGRAL PART OF THE HIGHWAY PROJEC T. THE ASSESSEE SUBMITTED BEFORE THE AO THAT IT HAS DEVELO PED PARKING ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 3 LOT WITH ACCESS ROAD AT TRUCK TERMINAL, KALAMBOLI, NAVI MUMBAI ON BOT BASIS AND IS RESPONSIBLE FOR REPAIR, MAINTEN ANCE AND OPERATION OF THE SAID PARKING LOT. IT WAS SUBMITTE D THAT IT INVOLVED COMPLETE CREATION OF INFRASTRUCTURE FACILI TY AND OPERATION AND MAINTENANCE OF THE PROJECT FOR NEXT 2 0 YEARS. THE SAID PROJECT WAS AWARDED BY CIDCO TO THE ASSESSEE A ND AFTER IT WAS CONSTRUCTED, IT WAS INSPECTED BY CIDCO AND A WO RK COMPLETION CERTIFICATE WAS GRANTED TO THE ASSESSEE. THE SAID TRUCK TERMINAL OPERATED BY THE ASSESSEE HAS THE FOL LOWING FACILITIES: > PARKING OF TRUCK AT SMALL FEE > SAFETY AND SECURITY OF TRUCK AND MATERIAL THERE IN > EATING FACILITIES > PURE DRINKING WATER FACILITY > REPAIR FACILITIES INCLUDING THE TYRE PUNCHER, ENG INE REPAIRING, BODY REPAIRS, COLORING, RADIATORS WORKS, SPARE PARTS STORES, SERVICING CENTER, LEATH MACHINE WORK ETC. > BATHROOM AND WASHING FACILITIES > REST ROOM > SECURITY MONITORING FOR ALL PARKING AREA BY WAY OF CCTV CAMERAS. 5. THE AO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CAME TO CONCLUSION THAT ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA OF THE ACT BY OBSERVIN G AND HOLDING AS UNDER: 4. I HAVE CAREFULLY GONE THROUGH THE VERSIONS OF T HE ASSESSEE REPRODUCED ABOVE, AGREEMENT WITH CIDCO RELATING TO THIS PROJECT AND T HE FACTS OF THE CASE. TO HAVE A CLEAR CONCEPT ON THE PROJECT, I HAVE ALSO SEEN THE PROJECT. FROM THE AGREEMENT WITH CIDCO IT IS VERY CLEAR THAT THE ASSESSEE HAS BEEN E NTRUSTED WITH, REPAIR, MAINTAINENCE AND OPERATION OF A PARKING LOT IN KALA MBOLI STEEL MARKET ON BOT BASIS. ACCORDINGLY THE ASSESSEE HAS DEVELOPED THE P ARKING LOT AND IS COLLECTING PARKING CHARGES FROM THE PERSONS PARKING THEIR VEHI CLES. THE ASSESSEE IS ALSO PAYING CERTAIN SPECIFIED AMOUNT TO CIDCO AS PER THE AGREEM ENT. IN THE SUBMISSION REPRODUCED ABOVE THE MAIN CONTENTION OF THE ASSESSE E IS THAT THE PROJECT IS AN INTEGRAL PART OF A HIGH WAY PROJECT. HOWEVER THE FA CT IS THAT THE PARKING LOT DEVELOPED BY THE ASSESSEE IS IN KALAMBOLI STEEL MAR KET AND NOT ON ANY HIGHWAY. THUS THE CONTENTION THAT THE PROJECT IS AN INTEGRAL PART OF A HIGHWAY PROJECT IS FACTUALLY INCORRECT. ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 4 4.1 IN THIS CONTEXT IT IS ALSO WORTHWHILE TO LOOK A T THE CLAIM, DONE BY THE ASSESEE. DURING A. Y. 2011-12 THE ASSESSEE HAS CLAIMED DEDUC TION U/S. 80IB ON THIS VERY PROJECT. HOWEVER DURING A. Y. 2012-13 DEDUCTION HAS BEEN CLAIMED U/S. 80IAB. THUS EVEN THE ASSESSEE IS NOT CLEAR UNDER WHICH SECTION IT IS CLAIMING THE DEDUCTION. IN THIS CONTEXT IT IS ALSO WORTHWHILE TO HAVE A LOOK A T THE RELEVANT PORTION OF THE AUDIT REPORT IN FORM NO. 10CCB WHEREIN THE PROJECT IS SPE CIFIED. FOR THE SAKE OF CLARITY THE SAME IS REPRODUCED BELOW: 16. DEVELOPMENT, OPERATION, MAINTENANCE OF . (A) . (B) .. 4.2 IN THIS CASE THE ASSESSEE HAS DEVELOPED A PARKI NG LOT ON A CIDCO LAND AT TRUCK TERMINAL NO.5. ON THIS PROJECT THE ASSESSEE I NTENDS TO CLAIM DEDUCTION U/S. 80IA OF I. T. ACT 1961 ON THE PLEA THAT IT IS AN IN TEGRAL PART OF HIGHWAY PROJECT. AS BROUGHT OUT ABOVE THIS PROJECT IS NOT ON THE HIGHWA Y & HENCE THERE IS NO QUESTION IT BEING AN INTEGRAL PART OF THE HIGHWAY. THE FACT IS THAT CIDCO INSTEAD OF DEVELOPING A PARKING LOT ON ITS OWN, HAS ALLOWED THE ASSESSEE TO DEVELOP A PARKING LOT ON ITS LAND ON BOT BASIS AND HAS ALLOWED COLLECTION OF PARKING CHARGES. FOR HAVING USED THE CIDCO LAND THE ASSESSEE IS PAYING A YEARLY FEE TO C IDCO. THE ASSESSEE IS ALSO MAKING A -HANDSOME PROFIT ON ACCOUNT OF OPERATION A ND MAINTENANCE OF THE PARKING LOT. THE PARKING LOT IS BEING RUN IN A COMM ERCIAL WAY FOR PROFIT. THE PROJECT DEVELOPED BY THE ASSESSEE IS AT PER WITH ANY OTHER PARKING LOT IN A PARK, MUTIPLEX OR A SHOPPING MALL. IF THE CLAIM OF THE ASSESSEE IS IN ACCORDANCE WITH THE PROVISIONS OF I. T. ACT, 1961, INCOME FROM ALL SUCH PARKING LOTS WILL ALSO BE ELIGIBLE FOR DEDUCTION U/S. 80IA OFL. T. ACT, 1961. HOWEVER THERE IS NO SP ECIFC PROVISION IN SECTION 801A WHICH ALLOWS DEDUCTION U/S. 801A FOR SUCH PROJECTS. 4.3 INFRASTRUCTURE FACILITY ELIGIBLE FOR DEDUCTION U/S. 80IA HAS BEEN SPECIFIED IN THE ACT. AS PER EXPLANATION (B) TO SECTION SOIA(4) A N INFRASTRUCTURE FACILITY MEANS A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVITI ES BEING AN INTEGRAL PART OF THE PROJECT. HOWEVER IN THE CASE OF THE ASSESSEE THE P ARKING LOT DEVELOPED, OPERATED AND MAINTAINED BY THE ASSESSEE IS NOT ON THE HIGHWA Y AND HENCE IS NOT A PART OF ANY HIGHWAY PROJECT. THE HIGHWAY NEAR THE PARKIN G LOT IS PANVEL TALOJA ROAD AND IS A VERY OLD STATE HIGHWAY AND THE SAME IS NOT DEVELO PED BY THE ASSESSEE. FURTHER MORE PARKING LOT IS NOT EVEN ON PANVEL TALOJA HIGHW AY. THEREFORE THE PARKING LOT ON WHICH DEDUCTION U/S. 80IA IS CLAIMED OBVIOUSLY I S NOT AN INFRASTRUCTURE FACILITY ELIGIBLE FOR DEDUCTION U/S. 80IA OF I. T. ACT, 1961 . LOOKING AT THE PROVISIONS OF SECTION 80IA OF I. T. ACT, 1961, AND THE INTENTION S BEHIND THE INTRODUCTION OF THE SECTION, I AM OF THE CLEAR VIEW, THAT THE CLAIM OF THE ASSESSEE U/S. 80IA IS NOT IN ACCORDANCE WITH THE PROVISIONS OF I. T. ACT, 1961. THEREFORE THE CLAIM OF DEDUCTION U/S. 80IA OF RS.68,22,830/- IS DISALLOWED. SINCE TH E ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME, PENALTY PROCEEDIN GS U/S. 271(1) (C) OF THE ACT ARE INITIATED SEPARATELY. 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DIS MISSED THE APPEAL OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 5 9. I HAVE CAREFULLY GONE THROUGH THE FACTS OF THE CASE, FINDINGS OF THE AO IN THE ASSESSMENT ORDER, SUBMISSIONS OF THE LD. AR AND MAT ERIAL PLACED ON RECORD. FROM THE FACTS OF THE CASE IT IS NOTICED THAT IN THE RET URN OF INCOME THE APPELLANT HAD CLAIMED THE DEDUCTION OF RS 8,73,817/- U/S 80IB OF THE ACT IN A YR 2011-12 AND RS.68,22,830/- U/S 801AB OF THE ACT IN AYR 2012-13. IN THE ABSENCE OF AUDIT REPORT WITH THE RETURN OF INCOME, THE AO COULD NOT ASCERTA IN THE EXACT NATURE OF INCOME AGAINST WHICH THE SAID DEDUCTIONS HAVE BEEN CLAIMED . ACCORDINGLY THE AO RESORTED TO CALL FOR AUDIT REPORTS ALONG WITH THE OTHER DETA ILS FOR JUSTIFYING THE GENUINENESS OF ABOVE CLAIMS. IN COMPLIANCE THE AR OF THE APPELLANT ATTENDED THE PROCEEDINGS AND RECLASSIFIED THE CLAIM OF ABOVE DEDUCTIONS U/S 80IA OF THE ACT INSTEAD OF 80IB/80IAB OF THE ACT CLAIMED IN THE ORIGINAL RETURNS OF INCOM E. AS REGARD NON FILING OF AUDIT REPORTS ALONG WITH IT RETURNS I S CONDUCTED IT IS STATED THAT MERELY NOT FILLING THE AUDIT REPORT ALONG WITH IT RETURNS WILL NOT DISENTI TLE THE APPELLANT FOR CLAIMING ABOVE DEDUCTION. AS PER A.O. THE DEDUCTION U/S 80IA OF THE ACT IS ADMISSIBLE ONLY IF THE ACCOUNT OF THE APPELLANT HAVE BEEN AUDITED BY T HE CA AND THE AUDIT REPORT DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT IS FURNISHED ALONG WITH RETURN OF INCOME. IN VIEW OF THESE FACTS THE AO CONCLUDED THAT THERE IS NO CONSISTENCY IN THE STAND OF THE APPELLANT AND NON FILING OF AUDIT REPORT ALONG WITH THE RETURN OF INCOME ALSO AFFIRMS THAT THE APPELLANT IS NOT SURE ABOUT CORREC TNESS OF ITS CLAIM WHICH HE HAD MADE U/S. 80IB/80IAB OF THE ACT AS ABOVE. THE AO FU RTHER OBSERVED THAT THE AUDITOR IN THE AUDIT REPORT REFERRED THE TRUCK PARK ING TERMINAL AS AN INDUSTRIAL PARK/SEZ, WHICH WAS CORRECTED AND CLAIMED AS TRUCK PARKING TERMINAL DURING THE ASSESSMENT PROCEEDINGS. 9.1 FROM THE FACTS OF THE CASE IT IS NOTICED THAT THE APPELLANT HAD ENTERED INTO AN AGREEMENT WITH CIDCO FOR REPAIRS, MAINTENANCE AN D OPERATION OF PARKING LOT I.E. TRUCK PARKING TERMINAL IN 6.40 HECTARE PIECE OF LAN D, AT KALAMBOLI STEEL MARKET, WHICH IS LOCATED DIVA PANVEL RAILWAY LINE ON ITS EA STERN SIDE AND NH 4 BYPASS (MUMBAI-PUNE OLD EXPRESS WAY) ON ITS SOUTHERN SIDE. ACCORDINGLY IT HAD REPAIRED THE TRUCK PARKING TERMINAL AND AS PER AGREEMENT, ST ARTED COLLECTING THE PARKING CHARGES FROM THE TRUCKERS. IT HAS ALSO CREATED OTHE R AMENITIES SUCH AS DHABA, SMALL SHOPS, REST ROOMS, CANTEENS, RESTAURANT, REPAIR SHO PS ETC., IN THE SAID LAND FOR PROVIDING FACILITIES TO THE TRUCK DRIVERS AND ALSO MERCHANDIZING THE GOODS AND SERVICES ON COMMERCIAL BASIS FOR PROFITS. AS PER AG REEMENT, THE CERTAIN PART OF THE FEES COLLECTED AGAINST PARKING WAS ALSO PAID TO THE CIDCO, WITH AN ANNUAL INCREMENT OF 10%. THE APPELLANT HAD CLAIMED THE ABOVE DEDUCTI ONS WITH THE PLEA THAT THE TRUCK PARKING TERMINAL IS AN INTEGRAL PART OF HIGHW AY PROJECTS, HENCE ELIGIBLE FOR SAID DEDUCTION, AS PER PROVISIONS OF SEC 80IA(4) OF ACT. 9.2 THE AO, HOWEVER, OBSERVED THAT THE TRUCK PARKIN G TERMINAL IS AN INDEPENDENT CONTRACT BETWEEN APPELLANT AND CIDCO FOR REPAIR, MA INTENANCE AND OPERATING IT, FOR CERTAIN PERIOD ON CONTRACT BASIS AND HAS NOTHING TO DO WITH THE HIGHWAYS, WHICH HAVE BEEN BUILT EITHER BY THE GOVERNMENT OR OTHER P LAYERS INDEPENDENTLY, HENCE THE TRUCK PARKING TERMINAL, AWARDED BY WAY OF CONTR ACT FOR REPAIR, MAINTENANCE AND OPERATION, CANNOT BE CLASSIFIED AS INTEGRAL PART OF THE HIGHWAY. THE AO FURTHER OBSERVED THAT THE CIDCO HAS AWARDED THE CONTRACT OF TRUCK PARKING TERMINAL TO THE APPELLANT FOR REPAIR, MAINTENANCE AND OPERATING IT FOR CERTAIN PERIOD, BY WAY OF CONTRACT, HENCE THE SAME CANNOT BE CLASSIFIED AS IN FRASTRUCTURE DEVELOPED BY THE APPELLANT, AS HAS BEEN DEFINED IN THE PROVISIONS OF EXPLANATION (B) TO SEC 80IA(4) OF ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 6 THE ACT, WHICH INTER-ALIA STATE THAT '(B) A HIGHWAY PROJECT INCLUDING HOUSING OR OTHER ACTIVITIES BEING AN INTEGRAL PART OF THE HIGH WAY PROJECT . THE AO FURTHER NOTICED THAT THE APPELLANT IS COLLECTING TRUCK PARK ING CHARGES FROM VARIOUS TRUCK OWNERS AND THE SAME IS SHARED WITH THE CIDCO, AS PE R THEIR AGREEMENT, WITH ANNUAL INCREMENT OF 10%, ON COMMERCIAL BASIS. 9.2 FROM THE ABOVE FACTS IT IS SEEN THAT THIS TRUCK PARKING TERMINAL WAS ALREADY EXISTING IN THE KALAMBOLI STEEL MARKET AND THE CONT RACT WAS AWARDED TO THE APPELLANT FOR RENOVATING/REPAIRING, MAINTAINING AND OPERATING IT FOR CERTAIN PERIOD, TO GENERATE INCOME FOR ITSELF AS WELL AS FOR CIDCO, ON COMMERCIAL BASIS. IT IS PERTINENT TO MENTION HERE THAT IN THE COUNTRY WHERE EVER THERE ARE BIG MARKET HUBS/SHOPPING CENTERS/MALLS, SUCH PARKING LOTS ARE MAINTAINED BY THE CONTRACTORS ON CONTRACT BASIS, BY WAY OF REPAIR, MAINTENANCE AN D OPERATION AND THE REVENUE IS SHARED BETWEEN THE CONTRACTORS AND THE LAND PARKING TERMINAL OWNERS. IN THIS CASE THE APPELLANT HAD DEVELOPED OTHER AMENITIES, SUCH A S REST ROOMS, RESTAURANTS, DRINKING WATER FACILITIES, REPAIR SHOPS, OTHER RETA IN SHOPS OF DAILY NEEDS ETC.. TO FACILITATE THE PEOPLE COMING THEREIN INCLUDING DRIV ERS, FOR COMMERCIALLY EXPLOITING THE FACILITIES. KEEPING IN VIEW THE FACTS AS DISCUS SED ABOVE, IN MY CONSIDERED OPINION, THE CONTRACT OF TRUCK PARKING TERMINAL, AW ARDED TO THE APPELLANT FOR REPAIR, MAINTENANCE AND OPERATING, FOR CERTAIN PERIOD, ON C OMMERCIAL BASIS, CANNOT BE CLASSIFIED AS INFRASTRUCTURE UNDER ANY PROVISION OF SEC 80IA(4) OF THE ACT, HENCE NOT ELIGIBLE FOR CLAIM OF DEDUCTION MADE U/S 80IA OF TH E ACT. AS REGARDS THE CASE LAWS RELIED BY THE APPELLANT ARE CONCERNED, IT IS SEEN T HAT THEY ARE DISTINGUISHABLE FROM THE FACTS OF THE CASE UNDER DISPUTE, HENCE NOT COMP ARABLE. ACCORDINGLY THE CLAIMS OF DEDUCTION OF RS 8,73,817/- AND RS. 68,22,830/-, FOR A YR 2011-12 AND 2012-13, RESPECTIVELY, DISALLOWED BY THE AO, ARE HEREBY SUST AINED AND ABOVE GROUNDS OF APPEAL, FOR BOTH THE YEARS, ARE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN THIS CASE THE ASSESSEE WAS AWARDED A PROJECT BY CIDCO TO CONSTRUC T A PARKING LOT CALLED TRUCK TERMINAL HAVING FACILITIES ON BOT BASIS. UNDER THE TERMS OF AWARD, THE ASSESSEE WAS RESPONSI BLE FOR REPAIR, MAINTENANCE AND OPERATION OF THE SAID TERMI NAL. THE ASSESSEE USED TO COLLECT FEE FROM THE TRUCK OWNERS FROM THE TRUCKS AND ALSO PAY YEARLY FEE TO CIDCO. ACCORDING TO THE AO THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SE CTION 80IA OF THE ACT ON THE GROUND THAT THE TRUCK TERMINAL IS NO T AN INFRASTRUCTURE FACILITY WHICH WAS AFFIRMED BY LD. C IT(A) IN THE APPELLATE ORDER. ACCORDING TO THE REVENUE AUTHORIT IES THE TRUCK PARKING TERMINAL IS AN INDEPENDENT CONTRACT WITH CI DCO WHICH ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 7 HAS NOTHING TO DO HIGHWAYS. SO THE ISSUE BEFORE US IS WHETHER THE TRUCK TERMINAL IS AN INTEGRAL PART OF HIGHWAYS OR NOT. WE NOTE THAT FINANCE ACT, 2001 HAS MODIFIED THE DEFINI TION OF INFRASTRUCTURE FACILITY WHICH MEANS A HIGHWAY PROJE CT INCLUDING HOUSING OR OTHER ACTIVITIES BEING AN INTEGRAL PART OF THE HIGHWAY PROJECT. IT IS CLEAR FROM THE AMENDED DEFINITION T HAT ANY INFRASTRUCTURE WHICH IS PART OF THE HIGH WAY FALLS WITHIN THE DEFINITION OF INFRASTRUCTURE. AFTER PERUSING THE FA CTS ON RECORD CAREFULLY AND ALSO EXAMINING THE TERMS AND CONDITIO NS OF AWARD OF CONTRACT TO THE ASSESSEE TO CONSTRUCT, BUILD OR OPERATE THE SAID TERMINAL ON BOT BASIS, WE FIND THAT THIS IS AN INTE GRAL PART OF HIGHWAY THOUGH THE HIGHWAY WAS EXISTING ALREADY AND IT WAS ONLY A STAND ALONE PROJECT AWARDED TO THE ASSESSEE LATER ON. WE HAVE ALSO NOTICED THAT THE SAID TERMINAL WAS HAVING VARIOUS FACILITIES AS STATED HEREINABOVE. THE CASE OF THE ASSESSEE FINDS SUPPORT FROM THE DECISION OF DY. COMMISSIONER OF IN COME TAX VS. VINTAGE ADVERTISING PVT. LTD. (2015) 60 TAXMANN.C OM 162 (KOLKATA- TRIBUNAL) WHEREIN IT HAS BEEN HELD THAT A SSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IA OF THE AC T ON BUS SHELTER AND FOOT OVER BRIDGE. THE OPERATIVE PART I S REPRODUCED AS UNDER: 9. WE HAVE HEARD BOTH COUNSEL AND CAREFULLY PERUSE D THE RECORDS. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE IS NOT AT ALL ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE ACT ON BUS SHE LTERS AND FOOT OVERBRIDGES. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AS IN THIS CASE IT IS NOT THE CASE THAT THE ASSESSEE HAS GAINED ANY PROFIT OR GAI N FROM THE SAID BUSINESS UPON WHICH DEDUCTION UNDER SECTION 80-IA OF THE ACT IS B EING CLAIMED. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IT IS NO T THE CASE THAT ANY TOLL/FEE IS BEING CHARGED FOR THE USE OF FOOT OVERBRIDGES OR BU S SHELTER FOR WHICH DEDUCTION UNDER SECTION 80-IA OF THE ACT IS BEING CLAIMED. TH E LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS EARNI NG INCOME BY WAY OF ADVERTISING ON THE FOOT OVERBRIDGES AND BUS SHELTERS WHICH IS T HE SUBJECT MATTER OF THE ASSESSEE'S CLAIM OF DEDUCTION UNDER SECTION 80-IA O F THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE INCO ME ON ACCOUNT OF ADVERTISEMENT CANNOT SAID TO BE AN INCOME DERIVED B Y AN UNDERTAKING FROM THE ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 8 BUSINESS OF INFRASTRUCTURE DEVELOPMENT. HENCE HE SU BMITTED THAT THE ASSESSEE CANNOT BE ALLOWED DEDUCTION UNDER SECTION 80-IA OF THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE MADE ELABORATE SUBMISSI ONS WITH RESPECT TO MEANING OF PHRASE 'DERIVED FROM'. HE ALSO REFERRED TO SEVER AL CASE LAW INCLUDING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA V. CIT [2009] 317 ITR 218/183 TAXMAN 349 (SC) . REFERRING TO THE RATIO EMANATING FROM THE AFORESA ID APEX COURT'S DECISION THE LEARNED DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT THE PROFIT OF THE ASSESSEE FROM THE ADVERTISING BUSINESS WOULD CERTAINLY BE PROFITS AND GAINS OF THE BUSINESS IN TERMS OF SECTION 28 OF THE ACT, THE SAME WOULD NOT AMOUNT TO PROFITS OR GAINS DERIVED FROM THE INDUSTRIAL UNDERT AKING. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER REFERRED TO THE HON'BLE CALC UTTA HIGH COURT'S DECISION IN THE CASE OF MUKHERJEE ESTATE (P.) LTD. V. CIT [2000] 244 ITR 1/113 TAXMAN 313 FOR THE PROPOSITION THAT INCOME MAINLY PUBLICITY CHARGES BY PUTTING UP HOARDING/DISPLAYING ADVERTISEMENT FROM A BUILDING CANNOT BE TREATED AS INCOME FROM PROPERTY BUT INCOME FROM OTHER SOURCES. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ABOVE PROVES THAT THE ASSESSEE'S INCOME DOES NOT INCLUDE ANY PROFIT WHICH IS DERIVED FROM DEVELOPING OR (II) OPE RATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING FOOT OVERBRID GE AND BUS SHELTER. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. SKYLINE ADVERTISING (P.) LTD. [2014] 225 TAXMAN 220 (MAG.)/45 TAXMANN.COM 532 , HAS HELD THAT THE BENEFIT UNDER SECTION 80-IA OF THE ACT CAN BE EXTENDED ONLY TO THOSE ASSESSEES WHO HAV E DEVELOPED INFRASTRUCTURE FACILITY AS DEFINED UNDER SECTION 80-IA(4) OF THE A CT. THE HON'BLE HIGH COURT DISCUSSED THE FACT OF THE CASE THAT THE ASSESSEE HA S NOT DEVELOPED ROAD OR A TOLL ROAD, BRIDGE, HIGHWAY OR A RAIL SYSTEM. HOWEVER, IT HAD DEVELOPED THE EXISTING ROAD MEDIAN, ERECTED BUS SHELTERS AND LIGHT POLES FOR IT S ADVERTISEMENT BUSINESS, WHICH, IN ANY CASE CANNOT BE TREATED AS INFRASTRUCTURE DEV ELOPMENT. ACCORDINGLY, THE HON'BLE HIGH COURT DECIDED THE QUESTION OF LAW IN F AVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE THE LEAR NED DEPARTMENTAL REPRESENTATIVE PRAYED THAT THE ASSESSEE CANNOT BE ALLOWED ANY DEDU CTION UNDER SECTION 80-IA OF THE ACT. 9. WE HAVE HEARD BOTH COUNSEL AND CAREFULLY PERUSED T HE RECORDS. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE IS NOT AT ALL ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE ACT ON BUS SHE LTERS AND FOOT OVERBRIDGES. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AS IN THIS CASE IT IS NOT THE CASE THAT THE ASSESSEE HAS GAINED ANY PROFIT OR GAI N FROM THE SAID BUSINESS UPON WHICH DEDUCTION UNDER SECTION 80-IA OF THE ACT IS B EING CLAIMED. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IT IS NO T THE CASE THAT ANY TOLL/FEE IS BEING CHARGED FOR THE USE OF FOOT OVERBRIDGES OR BU S SHELTER FOR WHICH DEDUCTION UNDER SECTION 80-IA OF THE ACT IS BEING CLAIMED. TH E LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS EARNI NG INCOME BY WAY OF ADVERTISING ON THE FOOT OVERBRIDGES AND BUS SHELTERS WHICH IS T HE SUBJECT MATTER OF THE ASSESSEE'S CLAIM OF DEDUCTION UNDER SECTION 80-IA O F THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE INCO ME ON ACCOUNT OF ADVERTISEMENT CANNOT SAID TO BE AN INCOME DERIVED B Y AN UNDERTAKING FROM THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT. HENCE HE SU BMITTED THAT THE ASSESSEE CANNOT BE ALLOWED DEDUCTION UNDER SECTION 80-IA OF THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE MADE ELABORATE SUBMISSI ONS WITH RESPECT TO MEANING OF PHRASE 'DERIVED FROM'. HE ALSO REFERRED TO SEVER AL CASE LAW INCLUDING THE ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 9 DECISION OF THE HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA V. CIT [2009] 317 ITR 218/183 TAXMAN 349 (SC) . REFERRING TO THE RATIO EMANATING FROM THE AFORESA ID APEX COURT'S DECISION THE LEARNED DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT THE PROFIT OF THE ASSESSEE FROM THE ADVERTISING BUSINESS WOULD CERTAINLY BE PROFITS AND GAINS OF THE BUSINESS IN TERMS OF SECTION 28 OF THE ACT, THE SAME WOULD NOT AMOUNT TO PROFITS OR GAINS DERIVED FROM THE INDUSTRIAL UNDERT AKING. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER REFERRED TO THE HON'BLE CALC UTTA HIGH COURT'S DECISION IN THE CASE OF MUKHERJEE ESTATE (P.) LTD. V. CIT [2000] 244 ITR 1/113 TAXMAN 313 FOR THE PROPOSITION THAT INCOME MAINLY PUBLICITY CHARGES BY PUTTING UP HOARDING/DISPLAYING ADVERTISEMENT FROM A BUILDING CANNOT BE TREATED AS INCOME FROM PROPERTY BUT INCOME FROM OTHER SOURCES. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ABOVE PROVES THAT THE ASSESSEE'S INCOME DOES NOT INCLUDE ANY PROFIT WHICH IS DERIVED FROM DEVELOPING OR (II) OPE RATING AND MAINTAINING OR (III) DEVELOPING, OPERATING AND MAINTAINING FOOT OVERBRID GE AND BUS SHELTER. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. SKYLINE ADVERTISING (P.) LTD. [2014] 225 TAXMAN 220 (MAG.)/45 TAXMANN.COM 532 , HAS HELD THAT THE BENEFIT UNDER SECTION 80-IA OF THE ACT CAN BE EXTENDED ONLY TO THOSE ASSESSEES WHO HAV E DEVELOPED INFRASTRUCTURE FACILITY AS DEFINED UNDER SECTION 80-IA(4) OF THE A CT. THE HON'BLE HIGH COURT DISCUSSED THE FACT OF THE CASE THAT THE ASSESSEE HA S NOT DEVELOPED ROAD OR A TOLL ROAD, BRIDGE, HIGHWAY OR A RAIL SYSTEM. HOWEVER, IT HAD DEVELOPED THE EXISTING ROAD MEDIAN, ERECTED BUS SHELTERS AND LIGHT POLES FOR IT S ADVERTISEMENT BUSINESS, WHICH, IN ANY CASE CANNOT BE TREATED AS INFRASTRUCTURE DEV ELOPMENT. ACCORDINGLY, THE HON'BLE HIGH COURT DECIDED THE QUESTION OF LAW IN F AVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE THE LEAR NED DEPARTMENTAL REPRESENTATIVE PRAYED THAT THE ASSESSEE CANNOT BE ALLOWED ANY DEDU CTION UNDER SECTION 80-IA OF THE ACT. 10. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE T RIBUNAL'S DECISION AS MENTIONED ABOVE. IN THE SAID ORDER THE TRIBUNAL HAD HELD AS U NDER : 'AFTER HEARING BOTH SIDES, WE FIND THAT THE ASSESSE E HAS CLAIMED DEDUCTION UNDER SECTION 80-IA ON BUS SHELTERS TREATING THE SAME AS INTEGRAL PART OF HIGHWAY AND DEVELOPMENT INFRASTRUCTURE. FOR THE PURPOSE OF HIGH WAY SYSTEM THE BUILDING OF THE BUS SHELTERS ARE FUNCTIONAL NECESSITY AND THESE ARE INEXTRICABLY CONNECTED WITH THE INFRASTRUCTURE REQUIRED FOR HIGHWAY. WITHOUT BUS SH ELTERS THE SMOOTH MOVEMENT OF THE VEHICLES AND THE OPERATION OF THE VEHICLES THRO UGH THE HIGHWAY SHALL NOT BE OF DESIRED LEVEL. THUS THE BUS SHELTERS ARE FUNCTIONAL LY NECESSARY PART AND PARCEL OF THE HIGHWAY INFRASTRUCTURE. BY HOLDING SO WE FIND THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE. WE UPHOLD THE SAME AND DISMISS THIS GROUND OF APPEA L TAKEN BY THE DEPARTMENT.' 11. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ABOV ESAID ORDER OF THE TRIBUNAL HAD BEEN APPEALED AGAINST BY THE DEPARTMENT IN THE HON' BLE HIGH COURT AND THE HON'BLE CALCUTTA HIGH COURT HAS NOT YET REVERSED TH E DECISION OF THE INCOME-TAX APPELLATE TRIBUNAL. HENCE HE SUBMITTED THAT THE TRI BUNAL'S ORDERS SHOULD BE SUSTAINED. LEARNED COUNSEL FURTHER SUBMITTED THAT T HE ISSUE INVOLVED IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBU NAL IN THE CASE OF DY. CIT V. SELVEL ADVERTISING (P.) LTD. [2015] 58 TAXMANN.COM 196 (KO L.) WHEREIN THE IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IN THAT CASE IT WAS ALSO POINTED OUT THAT ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 10 THE HON'BLE CALCUTTA HIGH COURT HAD PASSED AN ORDER CONFIRMING THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL IN QUASHING A REVISIO N ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX UNDER SECTION 263 OF THE ACT WHEREBY ALLOWANCE OF SECTION 80-IA OF THE ACT ON BUS SHELTERS AND FOOT O VERBRIDGES WAS DISALLOWED. 12. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT SECTION 80-IA OF THE ACT PROVIDES FOR DEDUCTION ON ACCOUNT OF PROFITS AND GA INS DERIVED BY AN INDUSTRIAL UNDERTAKING FROM ANY BUSINESS REFERRED TO THEREIN. LEARNED COUNSEL FURTHER SUBMITTED THAT THE HON'BLE APEX COURT IN THE CASE O F LIBERTY INDIA (SUPRA ) DEALT WITH THE QUESTION WHETHER THE PROFIT FROM THE DUTY ENTITLEMENT PASS BOOK SCHEME (DEPB) AND THE DUTY DRAWBACK SCHEME COULD BE SAID T O BE PROFIT DERIVED FROM THE BUSINESS OF AN INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE INCOME-TAX ACT. HENCE HE SUBMITTED THAT THIS CA SE LAW DOES NOT SUPPORT THE CASE OF THE DEPARTMENT. HE FURTHER SUBMITTED THAT T HE VERY AGREEMENTS UNDER WHICH THE ASSESSEE HAS DEVELOPED, OPERATED AND MAIN TAINED THE INFRASTRUCTURE FACILITY AT ITS OWN COST PROVIDED FOR REVENUE GENER ATION BY THE ASSESSEE BY THE DISPLAY OF COMMERCIAL ADVERTISEMENT ON THE INFRASTR UCTURE FACILITY DEVELOPED BY IT. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE WAS ALSO NOT TO CHARGE ANY AMOUNT FROM THE PUBLIC USERS OF THE INFRASTRUCTURE FACILITY DEVELOPED BY IT. THAT THE ASSESSEE WAS HOWEVER PERMITTED TO USE THE INFRASTRU CTURE FACILITY DEVELOPED BY IT TO RAISE REVENUE BY DISPLAY OF COMMERCIAL ADVERTISEMEN TS ON IT. THAT THE PROVISION IN THE AGREEMENTS RELATING TO GENERATION OF REVENUE IN THE MANNER AFORESAID IS INEXTRICABLY AND DIRECTLY CONNECTED WITH THE DEVELO PMENT, OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY PROVIDED FOR IN THE AGREEMENTS. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE DID NOT MERELY DEVELOP THE INFRASTRUCTURE FACILITY BUT THE ASSESSEE ALSO OPERA TED AND MAINTAINED THE INFRASTRUCTURE FACILITY WHICH ACTIVITY ARE ALSO COV ERED BY SECTION 80-IA OF THE ACT. IN THIS REGARD LEARNED COUNSEL FURTHER REFERRED TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. CEMENT MFG. CO. L TD. [ITAT NO. 130 OF 2014, DATED 15-1-2015]. IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT HAS UPHELD THE INCOME-TAX APPELLATE TRIBUNAL'S DECISION HOLDING THAT THE ASSE SSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80-IC OF THE ACT BY TREATING THE TRAN SPORT AND INTEREST SUBSIDY AS PART OF THE BUSINESS PROFIT. ACCORDINGLY, LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE'S CLAIM OF DEDUCTION UNDER SECTION 80- IA OF THE ACT CANNOT BE DISALLOWED. 10. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE T RIBUNAL'S DECISION AS MENTIONED ABOVE. IN THE SAID ORDER THE TRIBUNAL HAD HELD AS U NDER : 'AFTER HEARING BOTH SIDES, WE FIND THAT THE ASSESSE E HAS CLAIMED DEDUCTION UNDER SECTION 80-IA ON BUS SHELTERS TREATING THE SA ME AS INTEGRAL PART OF HIGHWAY AND DEVELOPMENT INFRASTRUCTURE. FOR THE PUR POSE OF HIGHWAY SYSTEM THE BUILDING OF THE BUS SHELTERS ARE FUNCTIO NAL NECESSITY AND THESE ARE INEXTRICABLY CONNECTED WITH THE INFRASTRUCTURE REQUIRED FOR HIGHWAY. WITHOUT BUS SHELTERS THE SMOOTH MOVEMENT OF THE VEH ICLES AND THE OPERATION OF THE VEHICLES THROUGH THE HIGHWAY SHALL NOT BE OF DESIRED LEVEL. THUS THE BUS SHELTERS ARE FUNCTIONALLY NECESSARY PA RT AND PARCEL OF THE HIGHWAY INFRASTRUCTURE. BY HOLDING SO WE FIND THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS RIGHTLY AL LOWED THE APPEAL OF THE ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 11 ASSESSEE ON THIS ISSUE. WE UPHOLD THE SAME AND DISM ISS THIS GROUND OF APPEAL TAKEN BY THE DEPARTMENT.' 11. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ABOV ESAID ORDER OF THE TRIBUNAL HAD BEEN APPEALED AGAINST BY THE DEPARTMENT IN THE HON' BLE HIGH COURT AND THE HON'BLE CALCUTTA HIGH COURT HAS NOT YET REVERSED TH E DECISION OF THE INCOME-TAX APPELLATE TRIBUNAL. HENCE HE SUBMITTED THAT THE TRI BUNAL'S ORDERS SHOULD BE SUSTAINED. LEARNED COUNSEL FURTHER SUBMITTED THAT T HE ISSUE INVOLVED IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBU NAL IN THE CASE OF DY. CIT V. SELVEL ADVERTISING (P.) LTD. [2015] 58 TAXMANN.COM 196 (KO L.) WHEREIN THE IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IN THAT CASE IT WAS ALSO POINTED OUT THAT THE HON'BLE CALCUTTA HIGH COURT HAD PASSED AN ORDER CONFIRMING THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL IN QUASHING A REVISIO N ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX UNDER SECTION 263 OF THE ACT WHEREBY ALLOWANCE OF SECTION 80-IA OF THE ACT ON BUS SHELTERS AND FOOT O VERBRIDGES WAS DISALLOWED. 12. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT SECTION 80-IA OF THE ACT PROVIDES FOR DEDUCTION ON ACCOUNT OF PROFITS AND GA INS DERIVED BY AN INDUSTRIAL UNDERTAKING FROM ANY BUSINESS REFERRED TO THEREIN. LEARNED COUNSEL FURTHER SUBMITTED THAT THE HON'BLE APEX COURT IN THE CASE O F LIBERTY INDIA (SUPRA ) DEALT WITH THE QUESTION WHETHER THE PROFIT FROM THE DUTY ENTITLEMENT PASS BOOK SCHEME (DEPB) AND THE DUTY DRAWBACK SCHEME COULD BE SAID T O BE PROFIT DERIVED FROM THE BUSINESS OF AN INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE INCOME-TAX ACT. HENCE HE SUBMITTED THAT THIS CA SE LAW DOES NOT SUPPORT THE CASE OF THE DEPARTMENT. HE FURTHER SUBMITTED THAT T HE VERY AGREEMENTS UNDER WHICH THE ASSESSEE HAS DEVELOPED, OPERATED AND MAIN TAINED THE INFRASTRUCTURE FACILITY AT ITS OWN COST PROVIDED FOR REVENUE GENER ATION BY THE ASSESSEE BY THE DISPLAY OF COMMERCIAL ADVERTISEMENT ON THE INFRASTR UCTURE FACILITY DEVELOPED BY IT. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE WAS ALSO NOT TO CHARGE ANY AMOUNT FROM THE PUBLIC USERS OF THE INFRASTRUCTURE FACILITY DEVELOPED BY IT. THAT THE ASSESSEE WAS HOWEVER PERMITTED TO USE THE INFRASTRU CTURE FACILITY DEVELOPED BY IT TO RAISE REVENUE BY DISPLAY OF COMMERCIAL ADVERTISEMEN TS ON IT. THAT THE PROVISION IN THE AGREEMENTS RELATING TO GENERATION OF REVENUE IN THE MANNER AFORESAID IS INEXTRICABLY AND DIRECTLY CONNECTED WITH THE DEVELO PMENT, OPERATION AND MAINTENANCE OF THE INFRASTRUCTURE FACILITY PROVIDED FOR IN THE AGREEMENTS. LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE DID NOT MERELY DEVELOP THE INFRASTRUCTURE FACILITY BUT THE ASSESSEE ALSO OPERA TED AND MAINTAINED THE INFRASTRUCTURE FACILITY WHICH ACTIVITY ARE ALSO COV ERED BY SECTION 80-IA OF THE ACT. IN THIS REGARD LEARNED COUNSEL FURTHER REFERRED TO THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. CEMENT MFG. CO. L TD. [ITAT NO. 130 OF 2014, DATED 15-1-2015]. IN THIS CASE THE HON'BLE CALCUTTA HIGH COURT HAS UPHELD THE INCOME-TAX APPELLATE TRIBUNAL'S DECISION HOLDING THAT THE ASSE SSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80-IC OF THE ACT BY TREATING THE TRAN SPORT AND INTEREST SUBSIDY AS PART OF THE BUSINESS PROFIT. ACCORDINGLY, LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE'S CLAIM OF DEDUCTION UNDER SECTION 80- IA OF THE ACT CANNOT BE DISALLOWED. 13. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AN D PERUSED THE RECORDS. WE FIND THAT THE ISSUE ON MERITS AS TO WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 12 SECTION 80-IA OF THE ACT FOR CONSTRUCTION OF FOOT O VER-BRIDGE AS WELL AS BUS SHELTER IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL AND THE HON'BLE CALCUTTA HIGH COURT AS REFERRED TO IN THE SUBMISSIO NS OF LEARNED COUNSEL FOR THE ASSESSEE. THE TRIBUNAL IN THE ASSESSEE'S OWN CASE A S WELL AS IN THE CASE OF SELVEL ADVERTISING (P.) LTD. (SUPRA ) HAS HELD THAT BUS S HELTERS AND FOOT OVERBRIDGES SHOULD BE CONSIDERED AS PART OF THE INFRASTRUCTURE FACILIT Y FOR CLAIMING DEDUCTION UNDER SECTION 80-IA OF THE ACT. THIS ISSUE WAS ALSO SUPPO RTED BY THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SELVEL A DVERTISING (P.) LTD. (SUPRA ) WHEREIN THE HON'BLE HIGH COURT HAS UPHELD THE INCOM E-TAX APPELLATE TRIBUNAL'S DECISION QUASHING THE REVISION ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX UNDER SECTION 263 OF THE ACT WHEREIN BUS SHELTERS AND FOOT OVERBRIDGES WERE NOT TO BE CONSIDERED AS PART OF THE INFRASTRUC TURE FACILITY FOR CLAIMING DEDUCTION UNDER SECTION 80-IA OF THE ACT. 14. AS REGARDS THE ISSUE RAISED BY THE LEARNED DEPARTM ENTAL REPRESENTATIVE THAT THE INCOME WHICH IS THE SUBJECT MATTER OF CLAIM OF DEDU CTION UNDER SECTION 80-IA OF THE ACT WAS NOT DERIVED FROM THE BUSINESS OF ADVERTISIN G OF BUS SHELTERS AND FOOT OVERBRIDGES, WE FIND THAT THIS IS ALTOGETHER A NEW ISSUE WHICH IS NOT EVEN THE CASE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE ONLY ON THE GROUND THAT CONSTRUCTION OF BUS SHELTER AND FOO T OVERBRIDGE CANNOT BE TREATED AS DEVELOPMENT OF INFRASTRUCTURE FACILITY. HENCE TH EY DO NOT QUALIFY FOR DEDUCTION UNDER SECTION 80-IA OF THE ACT. THIS ASPECT OF THE ASSESSING OFFICER'S DISALLOWANCE HAS BEEN DULY OVERRULED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AS WELL AS THE INCOME-TAX APPELLATE TRIBUNAL. THE SAME ALSO DRAWS SUPPORT FROM THE HON'BLE CALCUTTA HIGH COURT DECISION IN THE CASE OF SELVEL ADVERTISING (P.) LTD. ( SUPRA ). IN THESE CASES IT HAS BEEN HELD THAT DEVELOPMENT OF FOOT OVERBRIDGES AND BUS SHELTERS DO QUALIFY FOR DEDUCTION UNDER SECTION 80- IA OF THE ACT ON ACCOUNT OF INFRASTRUCTURE DEVELOPMENT. WHEN THE ASSESSING OFFI CER HAS NOT RAISED ANY ISSUE AS TO WHETHER THE INCOME OF THE ASSESSEE CAN BE CONSID ERED TO BE INCOME DERIVED FROM THE INDUSTRIAL UNDERTAKING AND THE SAME WAS AL SO NOT THE SUBJECT-MATTER OF CONSIDERATION BEFORE THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS) NOR ANY SUCH GROUND HAS BEEN RAISED BEFORE THE INCOME-TAX A PPELLATE TRIBUNAL, IN OUR CONSIDERED OPINION THE LEARNED DEPARTMENTAL REPRESE NTATIVE CANNOT NOW ENLARGE THE SCOPE OF THE REVENUE'S APPEAL BEFORE US. 15. IN THIS REGARD WE ALSO DRAW SUPPORT FROM THE HON'B LE MADHYA PRADESH HIGH COURT EXPOSITION IN THE CASE OF KAMAL KISHORE & CO. V. CIT [1998] 232 ITR 668 FOR THE FOLLOWING PROPOSITION (HEADNOTE) : 'SECTION 253 OF THE INCOME-TAX ACT, 1961, PERMITS A PPEALS TO THE APPELLATE TRIBUNAL. UNDER SUB-SECTION (2) OF THIS SECTION, TH E COMMISSIONER MAY, IF HE OBJECTS TO ANY ORDER, DIRECT THE ASSESSING OFFICER TO APPEAL TO THE APPELLATE TRIBUNAL AGAINST THE ORDER. IT IS THUS CLEAR THAT T HERE HAS TO BE AN APPEAL AND THERE HAS TO BE A SPECIFIC OBJECTION. UNDER ORDER 4 1, RULE 2, OF THE CODE OF CIVIL PROCEDURE ALSO IT IS CLEAR THAT THE APPELLANT SHALL NOT EXCEPT BY LEAVE OF THE COURT, URGE OR BE HEARD IN SUPPORT OF ANY GROUN D OF OBJECTION NOT SET FORTH IN THE MEMORANDUM OF APPEAL.' 16. ON THE BASIS OF THE ABOVE RATIO THE HON'BLE HIGH C OURT HAD HELD THAT ADMITTEDLY THE GROUND OF STATUS WAS NOT TAKEN BY THE DEPARTMEN T IN TERMS OF SECTION 253(2) OF THE ACT. NO LEAVE WAS OBTAINED TO URGE THE GROUND I N REGARD TO THE STATUS AS ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 13 REGARDS THE LIABILITY TO TAX. THE TRIBUNAL ERRED IN LAW IN SETTING ASIDE THE FINDINGS GIVEN BY THE APPELLATE ASSISTANT COMMISSIONER THAT THE ASSESSEE WAS A SEPARATE ENTITY AND THE ASSESSMENT MADE IN THE CASE OF THE A SSESSEE SHOULD BE TREATED AS SUBSTANTIVE. 17. THUS FROM THE ABOVE WE HOLD THAT THE ISSUE WHICH W AS NOT THE BASIS OF DISALLOWANCE BY THE ASSESSING OFFICER AND THE SAME WAS NOT THE SUBJECT-MATTER OF CONSIDERATION BY THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) AND THE SAME WAS ALSO NOT THE SUBJECT-MATTER OF THE GROUND OF AP PEAL TAKEN BEFORE THE INCOME- TAX APPELLATE TRIBUNAL THE ISSUE NOW BEING RAISED B Y THE LEARNED DEPARTMENTAL REPRESENTATIVE NEED NOT BE ADJUDICATED BY US. HENCE ON THE ISSUE AS TO WHETHER FOOT OVERBRIDGES AND BUS SHELTERS QUALIFY FOR DEDUC TION OF SECTION 80-IA OF THE ACT WE HOLD THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CORRECT IN HOLDING THE ASSESSEE'S ENTITLEMENT FOR DEDUCTION UN DER SECTION 80-IA OF THE ACT. ACCORDINGLY, THIS GROUND OF APPEAL RAISED BY THE RE VENUE STANDS DISMISSED. 8. SINCE THE FACTS OF THE ASSESSEES CASE ARE SIMIL AR TO THE ONE AS DECIDED BY CO-ORDINATE BENCH OF THE TRIBUNAL, WE ARE THEREFORE RESPECTFULLY FOLLOWING THE SAME, SET ASID E THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO ALLOW THE DEDUCTION UNDER SECTION 80IA OF THE ACT. 9. THE ISSUE RAISED IN GROUND NO.2 IS AGAINST THE P ART CONFIRMATION OF DISALLOWANCE ON ACCOUNT OF LABOUR C HARGES EQUAL TO 1% OF THE TOTAL PURCHASES WHICH COMES TO RS.4,16 ,430/- BY LD. CIT(A) AS AGAINST THE DISALLOWANCE ON ADHOC BAS IS OF RS.7,25,120/- MADE BY THE AO ON THE GROUND THAT THE SE EXPENSES WERE INCURRED IN CASH WHEREAS THE ISSUE RA ISED IN GROUND NO.3, A WITHOUT PREJUDICE GROUND THAT THE LD . CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE TO 1% OF THE PURCHASES FOR ASSESSMENT YEAR 2011-12 OF RS.4,16,43,098/- INSTEAD OF 1% OF THE PURCHASES FOR ASSESSMENT YEAR 2012-13 I.E. RS.3,03,80,063/-. 10. THE FACTS IN BRIEF ARE THAT THE AO NOTICED FROM THE PROFIT & LOSS ACCOUNT THAT ASSESSEE HAS CLAIMED THE LABOUR C HARGES UNDER THE HEAD DIRECT EXPENSES OF RS.3,03,80,063/-. THE AO ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 14 NOTICED ON THE BASIS OF BILLS AND VOUCHERS FURNISH ED BY THE ASSESSEE THAT THERE WERE NO PROPER BILLS ISSUED BY THIRD PARTY AND IN SOME CASES THE EXPENSES WERE INCURRED IN CAS H. THE AO CALCULATED THE AMOUNT OF SUCH CASH EXPENSES AT RS.7 ,25,120/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 11. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PA RTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO A DD 1% OF THE PURCHASES, HOWEVER, INSTEAD OF TAKING THE FIGURE FO R ASSESSMENT YEAR 2012-13 THE LD CIT(A) WRONGLY TOOK THE FIGURE OF PURCHASES FOR ASSESSMENT YEAR 2011-12 AND THUS AN ADDITION OF RS.4,16,430/- WAS SUSTAINED. HENCE, THE ASSESSEE I S IN APPEAL. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE UNDISPUTED FACTS ARE THAT ASSESSEE HAS DEBITED A LABOUR CHARGE OF RS.3,0 3,80,063/- UNDER THE HEAD LABOUR CHARGES AND ADMITTEDLY ON R ANDOM BASIS THE AO FOUND THAT EXPENSES TO THE TUNE OF RS. 7,25,120/- INCURRED IN CASH FOR WHICH THE THIRD PARTY BILLS WE RE NOT AVAILABLE AND THE SAME WERE ADDED TO THE INCOME OF THE ASSESSEE. THE LD. CIT(A) REDUCED THE DISALLOWANCE TO RS.4,16,430/- BY APPLYING 1% ON RS.4,16,43,098/- BY WRONGLY TAKING THE LABOUR CHARGES AT RS.4,16,43,098/-. THU S THERE IS AN APPARENT MISTAKE IN THE ORDER OF LD. CIT(A) THE LA BOUR CHARGES DEBITED TO THE PROFIT & LOSS ACCOUNT ARE RS.3,03,8 0,063/-. THE LD. CIT(A) SHOULD HAVE DONE 1% OF RS.3,03,80,063/-. WE OBSERVE THAT THE AO AS WELL AS THE LD. CIT(A) HAS M ADE THE DISALLOWANCE ON ADHOC BASIS. WE ARE OF THE VIEW TH AT ENDS OF JUSTICE WOULD BE MET IF A REASONABLE DISALLOWANCE I S MADE ON THIS ACCOUNT. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 15 AND DIRECT THE AO TO DISALLOW A SUM OF RS.1,00,000/ -. GROUND NO. 2 IS PARTLY ALLOWED AND GROUND NO. 3 IS WITHOUT PREJUDICE TO GROUND 2 AND THEREFORE NEED NOT BE ADJUDICATED. 13. THE ISSUE RAISED IN GROUND NO.3 IS AGAINST THE CONFIRMATION OF ADDITION OF RS.34,541/- BY LD. CIT(A) AS MADE BY THE AO UNDER SECTION 14A READ WITH RULE 8D. 14. THE AO OBSERVED THAT ASSESSEE HAS EARNED TAX FR EE INCOME, HOWEVER, NO CORRESPONDING DISALLOWANCE WAS MADE. ACCORDINGLY, THE AO INVOKED RULE 8D AND CALCULATED THE DISALLOWANCE AT RS.34,541/- COMPRISING RS.18,460/- UNDER RULE 8D(II) AND RS.16,125/- UNDER RULE 8D(III) WHICH WAS CONFIRMED BY THE LD. CIT(A). 15. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND MERIT IN THE CONTENTIONS OF THE LD. A.R. THAT THE DISALLOWANCE UNDER RULE 8D2(III) WAS WRONGLY MADE A T 1.5% OF THE AVERAGE INVESTMENT INSTEAD OF .5%. THEREFORE, THE SAME IS REQUIRED TO BE RECTIFIED. ACCORDINGLY, WE SET ASID E THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO MAKE A DISALLOWANCE AT .5% OF AVERAGE INVESTMENT. NEEDLES S TO SAY THAT DISALLOWANCE COMPUTED UNDER RULE 8D(II) IS CORRECT. ACCORDINGLY, WE DIRECT THE AO TO DELETE THE DISALLOWANCE TO THE EXTENT OF RS.10,750/-. GROUND IS PARTLY ALLOWED. ITA NO.742/MUM/2018 AY 2011-12 16. THE ISSUE RAISED IN GROUND NO. 2 IS SIMILAR TO ONE AS DECIDED BY US IN ITA NO. 743/MUM/2018 AY 2012-13. THEREFORE OUR DECISION ON GROUND NO. 1 ITA NO. 743/MUM/2018 WOULD , ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 16 MUTATIS MUTANDIS , APPEAL TO GROUND NO. 2 OF THIS A PPEAL AS WELL. CONSEQUENTLY THE GROUND NO. 2 OF ASSESSEES APPEAL IS ALLOWED. 17. THE ISSUE RAISED IN GROUND NO. 3 AND 4 IS SIMIL AR TO ONE AS DECIDED BY US IN ITA NO. 743/MUM/2018 AY 2012-13. O UR FINDINGS IN ITA NO. 743/MUM/2018 WOULD, APPLY TO TH ESE GROUNDS AS WELL. ACCORDINGLY GROUND NO. 3 IS PARTLY ALLOWED WHEREAS GROUND NO. 4 IS NOT BE ADJUDICATED. THE AO IS DIRECTED TO DISALLOW AND ALL A SUM OF RS.1,25,000/-. 18. THE ISSUE RAISED IN GROUND NO. 4 IS SIMILAR TO ONE AS DECIDED BY US IN ITA NO. 743/MUM/2018 AY 2012-13 SU PRA WHEREIN WE HAVE PARTLY ALLOWED THE GROUND BY DIRECT ING THE AO TO MAKE ADDITION UNDER RULE 8D(2)(III) BY APPLYING 0.5% ON THE AVERAGE INVESTMENTS. OUR FINDINGS WOULD, MUTATIS MU TANDIS, APPLY TO GROUND NO. 4 OF THIS APPEAL. THE AO ID DIR ECTED TO MAKE ADDITION UNDER RULE 8D(2)(III) @0.5% OF THE AVERAGE INVESTMENTS. CONSEQUENTLY THE ASSESSEE GETS RELIEF OF RS.18,500/ -. THE GROUND IS PARTLY ALLOWED. GROUND NO. 1 IS NOT PRESSED AT THE TIME OF HEARING AND THEREFORE DISMISSED AS NOT PRESSED. 19. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2021. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 08.01.2021. * KISHORE, SR. P.S. ITA NOS.742 & 743/M/2018 M/S. THAKUR INFRAPROJECTS PVT. LTD. 17 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.