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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
This appeal preferred by the assessee is against the revision order of the Ld. Pr. CIT(A)-4, Kolkata passed u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) dated 26.12.2016 for AY 2012-13.
At the outset itself, the Ld. DR brought to our notice that there is a delay of 57 days in filing assessee’s appeal. On being asked, the Ld. AR drew our attention to the condonation petition filed wherein we note that the assessee received the impugned order dated 26.12.2016 on 05.01.2017 and the assessee company immediately forwarded the order to Shri Naresh Roy, Advocate who has filed an affidavit wherein it has been stated that he had received the order on 05.01.2017 from assessee, but it got misplaced and, thereafter, he could lay his hand on the impugned order only on 24.10.2017 and, then immediately he forwarded the order to Shri Subash Agarwal, Advocate to prepare an appeal and the same was filed and thus there was a delay of 57 days. We note that the delay caused in preferring an appeal before the Tribunal is not because of the fault on the part of the assessee. The delay was caused because of the omission on the part of the Ld. AR for misplacing the Selvel Media Services Pvt. Ltd., AY 2012-13 impugned order. For the fault of the AR of the assessee, the assessee should not be penalized; therefore, we condone the delay and admit the appeal for adjudication.
The assessee has preferred this appeal against the order of Ld. Pr. CIT-4, Kolkata wherein he has interfered with the order passed by the AO which was completed u/s. 143(3) of the Act on 17.03.2015. The Ld. Pr. CIT issued a show cause notice u/s. 263 of the Act dated 27.08.2015 wherein the Ld. Pr. CIT observed the following faults: “”In the instant case assessment was completed u/s 143(3) of the I. T. Act, 1961 on 17.03.2015 by the DCIT, Circle-12(2), Kolkata determining assessed income as Nil. 2. On perusal of the assessment records, it is seen that the assessee company in his computation of income & audited accounts claimed deduction u/s 80IA of the I. T. Act, 1961 on infrastructure facility rendered in respect of bus shelter, toilet block and foot over-bridges installed within no. of cities under contract with the concerned municipal authorities. 3. On examination of the case, it is seen that the assessee during the relevant previous year 2011-12 was engaged in the business of "outdoor advertising" which means that the assessee was not engaged in the business which could be admitted as the assessee was engaged in infrastructure development. Moreover, the construction and maintenance of the bus shelter, toilet block, foot over-bridges should not be prima-facie treated as 'road' within the meaning of explanation to sub-clause (c) of Clause (i) of sub section(4) of the section 80IA of the Income Tax Act, 1961.
4. However, the assessee claimed depreciation of hoarding structure @ 100% but since the hoarding structure is treated as "plant & machinery" and the said structure was used for less than 180 days, therefore, the assessee is entitled to depreciation @ 7.5%(50% of 15%) instead of 100%. 5. In light of the above, I am satisfied that prima facie the order dated 31.03.2015 passed u/s 143(3) of the Income Tax Act, 1961 is erroneous and prejudicial to the interests of the revenues. You are, therefore, requested to appear personally or through your authorized Representative before me at my room No. 4, 6th Floor, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700 069 on 14.09.2015 at 11.30 AM along with your written submissions, if any, to show as to why the assessment made u/s 143(3) on 31.03.2015 should not be revised u/s. 263 of the Income Tax Act, 1961.”
The assessee had replied to the aforesaid show cause notice which is found placed at pages 71 to 78 of the paper book. After perusal of the same, the Ld. Pr. CIT was pleased to hold that the AO’s order dated 17.03.2015 passed u/s. 143(3) of the Act was erroneous so far as prejudicial to the interest of the revenue and he was pleased to set aside the order back to the AO with a direction to examine and verify the issues raised in the aforesaid show cause notice. Aggrieved, the assessee is before us.
Selvel Media Services Pvt. Ltd., AY 2012-13 5. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the Ld. Pr. CIT has found fault with the AO in granting deduction u/s. 80IA of the Act. According to Ld. Pr. CIT, the assessee was engaged in the business of ‘outdoor advertisement’ which activity according to Ld. Pr. CIT, would not entitle the assessee to claim deduction u/s. 80IA of the Act. And he took note of the fact that since the assessee was engaged in construction and maintenance of bus shelter, toilet block, foot over- bridge etc which according to Ld. Pr. CIT cannot said to be construction of ‘road’ within the meaning of explanation to sub-clause (c) of clause (i) of sub-section 4 of section 80IA of the Act. The Ld. AR pointed out that this precise issue was raised by the AO in the course of regular assessment proceeding and the assessee had met all the issues raised by the AO and the same were placed on record before the AO and drew our attention to page 79 of the paper book which we note is the letter of the assessee to the AO [ Dy. Commissioner of Income-tax, Circle-12, Kolkata] wherein the assessee replied to the query of AO in detail and justified the claims for seeking deduction of a sum of Rs.1,91,10,791/- u/s. 80IA of the Act (which we note continues from page 79 to 82 of the paper book). And it was brought to the notice of the AO that the Ld. CIT(A) had decided this issue in favour of the assessee for AY 2008-09 and 2010-11 and in the case of the assessee’s sister concern namely, M/s Selvel Advertising Pvt. Ltd. and also that the Tribunal’s decision on this issue in assessee’s own case for AY 2005-06 onwards which was held in favour of assessee. We note that since the issue has been enquired into by the AO and after taking note of the submissions, documents and decision given by the Ld. CIT(A) and the Tribunal in assessee’s own case on the very issue regarding justification for claiming deduction u/s. 80IA of the Act, according to us, the AO has taken a view which is a plausible view and which action of the AO cannot be termed as erroneous so far as prejudicial to the interest of the revenue. It was brought to our notice by the Ld. AR that the Tribunal’s decision in assessee’s own case on the issue from AYs 2005-06 to 2011-12 is in favour of the assessee and the similar issue raised in the case of assessee’s sister concern M/s. Selvel Advertising Pvt. Ltd. wherein the Tribunal for AY 2004-05 has held as under: “It is clear from this that there was application of mind on the part of AO before he accepted the claim of the assessee Company u/s. 80IA of the Act. In respect of automatic traffic signals and pedestrian fee bridge this view of the AO is inconformity with the ratio as laid down by this Tribunal in the cases of Vantage Advertising Pvt. Ltd. & 1055/Ko1/2008 and Selvel Media Services Pvt. Ltd. in ITA No. 1065/Kol/2008, wherein bus shelters and foot
Selvel Media Services Pvt. Ltd., AY 2012-13 bridges were considered to be part of infrastructural facilities for claiming deduction u/s. 80IA of the Act. Thus, in our considered opinion, the AO has taken a possible view on the facts available on record. The law is well settled that if A.O has taken a possible view and the Ld. CIT has a different opinion on the same facts provisions of section 263 cannot be invoked and the order passed by the AO cannot be held to be erroneous and prejudicial to the interest of revenue. Since the Ld. CIT has done the same, the order passed by him is not sustainable in law and hence, is hereby quashed.”
We note that the aforesaid order of the Tribunal has been challenged by the Department before the Hon’ble Calcutta High Court in ITAT No. 49 of 2010, GA No. 894 of 2010 wherein Hon’ble High Court after framing the following question has held as under: “The Revenue has preferred this appeal under Section 260A of Income Tax Act, 1961 against the order dated 30.9.2010 of the Income Tax Appellate Tribunal 'A' Bench, Kolkata for the assessment year 2004-05. The appellant proposed the following substantial questions of law;- i) "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in quashing the revision order under section 263 of the Income-tax Act, 1961, passed by the Commissioner of Income-tax, on the ground that the Assessing Officer had taken one of the possible views while, in fact, the question is one of law and not fact and incorrect appreciation of law by the Assessing Officer is amenable to correction through the instrumentality of revision order under section 263 of the Act?" ii) "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in holding that automatic traffic signal and pedestrian foot bridge would constitute infrastructure facility defined in clause (a) of Explanation below sub-section (4) of section 80- IA of the Income-tax Act, 1961” Since, we are inclined to take the view that the Tribunal was right in holding that the automatic traffic signal and pedestrian foot bridge would constitute infrastructure facility as contemplated in clause (a) of the explanation to sub section (4) of Section 80-IA of the Income Tax Act, 1961, it is not necessary to answer question no. 1. Section 80-IA provides that where the gross total income of an assessee includes any profit and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as "the eligible business"), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. The relevant portion of sub-section (4) reads as under;- "(4) This section applies to- (i) any enterprise carrying on the business [ of (i ) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining] any infrastructure facility which fulfills all the following conditions, namely:- (a) to (c) . …….
Selvel Media Services Pvt. Ltd., AY 2012-13
Explanation defines infrastructure facility as under.- "(a) road including toll road, a bridge or a rail system;" The Tribunal took the view that installation of automatic traffic signal and pedestrian footbridge would be an integral part of road including a bridge. We do not find any fault with the interpretation placed by the Tribunal on Clause (a) of explanation to sub-section (4) of Section 80- IA of the Income-tax Act, 1961. In view of the above, the proposed question no. 1 is academic and, therefore, we are not inclined to entertain this appeal in respect of question no.1. The appeal is, therefore, summarily dismissed. The stay application is disposed of.”
Therefore, the issue is no longer res integra and the view taken by the AO is as per the Tribunal as well as the Hon’ble High Court’s order, therefore, the action of the AO cannot be held to be erroneous so far as prejudicial to the interest of revenue and, therefore, we hold that Ld. Pr. CIT lacks revisional jurisdiction to interfere on this issue and therefore erred in doing so.
7. The next fault is in respect to depreciation of hoarding structure @ 100%. The Ld. Pr. CIT observed that the said structure was used for less than 180 days and, therefore, the assessee is entitled to depreciation @ 7.5% (50% of 15%) instead of 100%. It was brought to our notice by the Ld. AR that the question of depreciation was also decided by the Tribunal in favour of the assessee in assessee’s own case for AY 2005-06. It was brought to our notice that the Tribunal agreed with the claim of the sister concern M/s. Selvel Advertising Pvt. Ltd. which carried out the same business activity like that of the assessee and the Tribunal upheld the view that the hoardings are temporary asset for which 100% depreciation is justifiable and the Ld. AR drew our attention to the order passed in ITA No. 820/Kol/2008. It was also brought to our notice that there was no further appeal before the Hon’ble High Court challenging the Tribunal’s decision that the hoardings being temporary structure are eligible for 100% depreciation. Therefore, according to us, the view taken by the AO cannot be faulted with and, therefore, the Ld. Pr. CIT erred in holding the AO’s action of allowing the claim of 100% depreciation as erroneous so far as prejudicial to the interest of the revenue. Since we note that the hoardings being temporary structures are eligible for 100% depreciation as held by this Tribunal in assessee’s sister concern M/s. Selvel Advertising Pvt. Ltd. in therefore, the view taken by the AO
Selvel Media Services Pvt. Ltd., AY 2012-13 is a possible view and, therefore, the Ld. Pr. CIT erred in invoking his jurisdiction u/s. 263 of the Act.
In the light of the above, the AO’s order cannot be held to be erroneous so far as prejudicial to the interest of the revenue on both the issues discussed above. Therefore, Ld. Pr. CIT lacks jurisdiction to interfere with the order passed by the AO by invoking his jurisdiction u/s. 263 of the Act. Therefore, we quash the impugned order of the Ld. Pr. CIT. Appeal of assessee is allowed.