Revenue appeal dismissed as infrastructure company gets Section 80IA(4) deduction on income enhanced through statutory disallowances

ITAT Ahmedabad dismissed the Revenue's appeal regarding deduction under Section 80IA(4) for an infrastructure company engaged in toll collection from constructed roads. The assessee had not originally claimed the deduction due to losses but became eligible after income enhancement from disallowances. The tribunal applied the consistency principle, noting the Department had allowed identical claims in earlier and subsequent years. Following precedents from Gujarat HC, Hyderabad ITAT, and Bombay HC, the tribunal held that income enhanced due to statutory disallowances qualifies for Section 80IA(4) deduction, upholding the CIT(A)'s decision.

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Issues Involved:
The issues involved in this case are the deduction u/s 80IA(4), condonation of delay in filing the appeal, and the eligibility of the assessee for claiming deduction under Section 80-IA(4) of the Act.

Condonation of Delay:
The appeal of the Department was time-barred by 164 days, and an application for condonation of delay was filed citing administrative work as the reason for the delay. The delay was condoned after considering the reasons provided.

On Merits:
The assessee, engaged in building infrastructure facilities and collecting toll, claimed project facility expenses as revenue expenses. The Assessing Officer disallowed these expenses as capital expenditure. The Ld. CIT(A) upheld the additions but allowed the deduction u/s 80IA(4) after verifying the eligibility criteria and considering relevant case laws.

Department's Appeal:
The Department appealed the Ld. CIT(A)'s decision, arguing that the assessee did not claim the deduction under Section 80-IA(4) due to losses in the impugned year. The Counsel for the assessee highlighted that the claim was allowed for prior and subsequent years, maintaining consistency.

Judgment:
The Tribunal found no infirmity in the Ld. CIT(A)'s order, as the Department had allowed the deduction in previous and subsequent years. Citing relevant case laws, the Tribunal upheld the eligibility of the assessee for claiming deduction under Section 80-IA(4) of the Act, dismissing the Department's appeal.

This summary provides a detailed overview of the judgment, addressing each issue involved in the case.

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