THE ITO, WARD-2 (1) (4), RAJKOT-GUJARAT vs. PATEL HIGHWAY MANAGEMENT PVT. LTD., RAJKOT-GUJARAT

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ITA 203/RJT/2016Status: DisposedITAT Rajkot28 February 2020AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the deduction under Section 80IA(4) is not limited to new infrastructure facilities but also covers the operation and maintenance of existing ones. Therefore, the assessee had rightly claimed the deduction.

What were the facts?

The Revenue appealed against the deletion of an addition related to the disallowance of a deduction claim under Section 80IA(4). The assessee argued that their case was covered by their own previous year's assessment, which was upheld by the Tribunal.

What were the issues?

Whether the deduction under Section 80IA(4) is applicable only to new infrastructure facilities or also to the operation and maintenance of existing ones.

Which sections of the Income-tax Act were involved?

Section 80IA(4)

AI-generated summary — verify with the full judgment below

PER BENCH: The instant appeal filed by the Revenue is directed against the order dated 22.03.2016 passed by the Commissioner of Income Tax (Appeals)-2, Rajkot arising out of the order dated 25.02.2015 passed by the ITO, Ward – 2(1)(4), Rajkot under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) for the Assessment Year (A.Y.) 2012-13.

2.

The matter relates to deletion of addition on disallowance of claim of deduction 80IA(4) to the tune of Rs. 22,76,77,485/-.

3.

At the time of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the case of the assessee is squarely covered

1.

ITO vs. Patel Highway Management Pvt. Ltd. AY 2012-13 - 2 - by assessee’s own case for the A.Y. 2011-12 where similar disallowance to the tune of Rs. 7.74 crores has been deleted. In fact, the Ld. CIT(A) allowed the appeal preferred by the assessee relying upon the order dated 26.02.2016 passed by the Ld. CIT(A) for A.Y. 2011-12. It was further submitted that the Hon’ble Tribunal by and under its order dated 02.08.2017 upheld such order passed by the Ld. CIT(A) in deleting such addition in the appeal preferred by the Revenue in a copy whereof has also been annexed to the Paper Book on record before us.

However, the Ld. DR has not been able to controvert such contentions made by the Ld. AR.

4.

Heard the parties, perused the records including the order passed by the Ld. Hon’ble Tribunal; the relevant portion whereof is as follows:-

“18. Now coming to the second issue, as to, whether deduction u/s.80IA(4) of the Act is limited only to new infrastructure facilities, we find it pertinent to peruse the following relevant portion of section 80IA(4)(i) of the Act:- (i) Any enterprise carrying on the business 37[of (i) developing or (ii) operating and maintaining or (Hi) developing, operating and maintaining] any infrastructure facility which fulfills all the following conditions, namely :- (a) it is owned by a company registered in India or by a consortium of such companies [or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act;] (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i)developing or (ii)operating and maintaining or (ii) developing, operating and maintaining a new infrastructure facility;]

(c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: 19. The above provision contemplates that the “eligible business” for claiming the impugned deduction u/s.80IA(4) of the Act consists of developing, operating and maintaining infrastructure facilities. The word “maintaining” appearing in the provision, itself connotes that it is for maintaining of existing infrastructure facilities ITO vs. Patel Highway Management Pvt. Ltd. AY 2012-13 - 3 - (which in this case is for maintenance of roads) and is therefore covered under the provisions of section 80IA(4) of the Act).

20.

We are therefore of the view that, it is not mandatory to construct any new infrastructure facilities in order to claim deduction u/s.80IA(4) of the Act, even the work of operating and maintaining of existing infrastructure facilities are also covered under the category of “business” referred in section 80IA(4) of the Act.

21.

We therefore n the given facts and circumstances of the case are of the view that assessee has rightly claimed the deduction u/s.80IA(4) of the Act of Rs. 7,73,77,928/-. We therefore find no infirmity in the findings of “Ld.CIT(A)” Ground no.1 of the Revenue is dismissed.” In the absence of any changed facts and circumstances of the case respectfully relying upon the said judgment passed by the Co-ordinate Bench we find no infirmity in the order passed by the Ld. CIT(A) in deleting the addition to the tune of Rs. 22,76,77,485/- being the claim of deduction u/s. 80IA(4) of the Act so as to warrant interference. Hence, the order is passed in the affirmative i.e. in favour of the assessee and against the Revenue.

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