Tribunal Upholds 100% Depreciation on Hoardings, Confirms Deduction for Construction Projects

The Tribunal dismissed the revenue's appeals, upholding 100% depreciation on hoardings used for less than 180 days and confirming the assessee's entitlement to deduction under section 80IA for constructing Foot Over Bridges and Bus Shelters. The decision relied on stare decisis, previous Tribunal rulings, and relevant High Court decisions, with the Tribunal emphasizing that the issues had already been resolved in favor of the assessee and supported by the High Court's decision.

---

---

Issues Involved:
1. Depreciation of hoardings: whether to be allowed at 100% or 50%.
2. Deduction under section 80IA of the Income Tax Act for construction of Foot Over Bridges and Bus Shelters.

Issue-wise Detailed Analysis:

1. Depreciation of Hoardings:

The primary issue was whether the depreciation on hoardings should be allowed at 100% or 50%, given that they were used for less than 180 days. The Tribunal had previously ruled in favor of the assessee in similar cases for the assessment years 2004-05 and 2005-06, stating that the hoardings had a life of one to two months and less than a year. The Tribunal observed that the Assessing Officer (AO) did not provide evidence regarding the durability of the hoardings and relied on guesswork. The Tribunal upheld the CIT(A)'s decision, which was supported by the ITAT Jabalpur Bench decision, granting 100% depreciation on the hoardings used for less than 180 days due to their non-durability. The revenue's appeal was dismissed as the issue had already been decided in favor of the assessee, and the decision had not been overturned by the High Court.

2. Deduction under Section 80IA:

The second issue was whether the assessee was justified in claiming a deduction under section 80IA for constructing Foot Over Bridges and Bus Shelters. The AO disallowed the deduction, arguing that Bus Shelters and Foot Over Bridges were not integral parts of the road system and did not qualify as infrastructure facilities under section 80IA. The AO contended that Bus Shelters were independent of roads and could not be considered part of a highway project.

Upon appeal, the CIT(A) sided with the assessee, referencing a previous Tribunal decision for the assessment year 2005-06, which held that Bus Shelters were functionally necessary and inextricably connected with highway infrastructure. The Tribunal, in the current case, upheld this view, stating that the construction of Bus Shelters and Foot Over Bridges qualified for deduction under section 80IA as part of infrastructure development. The Tribunal also referenced the Hon'ble Calcutta High Court's decision in the case of Selvel Advertising Pvt. Ltd., which confirmed that such constructions were eligible for the deduction.

The Departmental Representative (DR) argued that the income from advertising on Bus Shelters and Foot Over Bridges could not be considered as income derived from infrastructure development. However, this argument was deemed a new issue not raised by the AO or the CIT(A) and thus could not be considered by the Tribunal at this stage. The Tribunal emphasized that the AO's disallowance was solely based on the non-qualification of Bus Shelters and Foot Over Bridges as infrastructure facilities, which had already been overruled by the CIT(A) and supported by the High Court's decision.

Conclusion:

The Tribunal dismissed the revenue's appeals on both issues. It upheld the CIT(A)'s decision to allow 100% depreciation on hoardings used for less than 180 days and confirmed the assessee's entitlement to deduction under section 80IA for the construction of Foot Over Bridges and Bus Shelters. The Tribunal's decision was based on the doctrine of stare decisis, previous Tribunal rulings, and relevant High Court decisions.

---