Infrastructure deduction under section 80IA(4) denied where road signages were treated as ancillary, not eligible infrastructure work.

Deduction under section 80IA(4) was examined in relation to income from erection of road signages and foot-over bridges claimed as infrastructure work. The Tribunal noted that the provision applies only to profits derived from developing, operating or maintaining an eligible infrastructure facility such as a road or bridge, and held that ancillary works like road signages do not by themselves qualify. It also stated that composite receipts cannot be fully treated as eligible unless the assessee segregates and proves that the profits arise exclusively from qualifying infrastructure activity. On that basis, the deduction claim was rejected and the disallowance was upheld.

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Issues: Whether the assessee was entitled to deduction under section 80IA(4) of the Income-tax Act, 1961 in respect of income from erection of road signages and foot-over bridges as part of alleged infrastructure development.

Analysis: Deduction under section 80IA(4) is available only where profits are derived from developing, operating or maintaining an eligible infrastructure facility, such as a road or bridge. Road signages, though useful for traffic management and safety, are ancillary works and do not themselves create, develop, expand or structurally improve a road or bridge. A composite work order does not automatically make the entire profit eligible for deduction; the assessee must segregate and prove that the profits claimed arise from qualifying infrastructure activity alone. The assessee failed to establish that the entire claim pertained exclusively to eligible works, and the earlier adverse decision in its own case remained operative as there was no stay of the Tribunal order.

Conclusion: The assessee was not entitled to deduction under section 80IA(4), and the disallowance was upheld in favour of the Revenue.

Final Conclusion: The common issue was decided against the assessee, and all three appeals failed.

Ratio Decidendi: Ancillary works such as road signages do not constitute an eligible infrastructure facility under section 80IA(4), and deduction cannot be claimed on composite receipts unless the assessee proves that the profits are derived from qualifying infrastructure activity alone.

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