TaxTMI 
TaxTMI 
2011 (7) TMI 516
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....directed to be allowed. 3. Without prejudice to above, the learned CIT(A) erred in observing that appellant has failed to provide the details of machines purchased for using sanitary work, which is factually incorrect, the details are part of schedule of balance sheet and the bill-wise details were filed before the Assessing Officer and the copies were shown to the CIT(A) in the course of hearing hence the observation are not correct and no cognizance can be taken and deduction of Rs. 23,00,728 under section 80-IA, may be directed to be allowed." 3. Facts necessary for the disposal of the appeal are stated in brief. Assessee-company was primarily engaged in the business of manufacture, repairs and servicing of body of motor chasis and engineering products. During the previous year relevant to the year under consideration, the Company appears to have entered into an agreement (renewal) with the Municipal Corporation for removal and transportation of solid waste generated on sea beaches at Mumbai. As per the agreement, the assessee was to render service of clearing the waste from Shivaji Park and Mahim beaches. Admittedly, tender speaks of cleaning of the waste g....
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....ved from the utilisation of solid waste management system. 6. Admittedly, the expression "solid waste management system" has not been defined either under the Income-tax Act or any of the known enactments under Indian Law. Therefore, guidance has to be derived from the common parlance or commercial parlance meaning of the expression "solid waste management system" in the backdrop of global concern for a clean environment - solid waste management is an essential part in the process of maintaining clean environment. 7. The Assessing Officer observed that the work undertaken by the assessee is not related with the solid waste management but it was limited to cleaning of beaches. In his opinion, the actual work of cleaning of beaches cannot be equated with the solid waste management as envisaged under section 80-IA of the Act. Therefore, claim of deduction under section 80-IA was rejected by the Assessing Officer. 8. Aggrieved, it was contended before the learned CIT(A) that to carry out the work of cleaning, segregation, transportation and dumping of waste at the specified place, assessee-company bought machinery and equipment, arranged man-power, and created facilities for mainten....
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....nes purchased for being used in the sanitation work. Regarding the assessee's claim that it has purchased the machinery by taking finance from Bank, learned CIT(A) stated that the assessee was also involved in other business and profits and loss account does not show any expenditure on account of maintenance of machinery apart from the fact that the interest paid on the loan taken is nominal. He thus concluded that the claim of purchase of machinery for the purpose of cleaning of beaches is not supported by any evidence. 10. Further aggrieved, assessee is in appeal before us. Learned Counsel, appearing on behalf of the assessee, reiterated the submissions made before the Assessing Officer as well as the CIT(A). Assessee-company filed two paper books. Adverting our attention to the relevant pages, learned Counsel submitted that the nature of work carried out by the assessee would fall within the broader spectrum of "solid waste management". Explaining further, it was contended that the assessee-company entered into a contract with the Municipal Corporation of Greater Mumbai whereby the company was assigned the job of cleaning solid wastes from Shivaji Park to Mahim beaches. As per ....
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....t of the Environmental Audit of MSW Management as well as World Bank, it may be appropriate to extract the definition of "solid waste management" provided in the National Solid Waste Management Act of Jamaica : "Solid waste management" includes - (a) the systematic control of the generation, collection, separation, storage, reuse, recycling, transportation, transfer, treatment, and disposal of solid waste; and (b) the characterisation and measurement of solid waste;" 12. Page 137 of the paper book also provides a similar meaning to the expression "solid waste management". In their opinion 'solid waste management' means :- "Management of solid waste is associated with the control of generation, storage, collection, transfer and transport, processing, and disposal of solid wastes in a manner that is in accord with the best principles of public health, economics, engineering, conservation, aesthetics, and other environmental considerations." 13. Pages 139 to 143 appears to be the suggestions made by the World Bank in its development studies. At page 142, under the caption "solid waste management system", they have defined solid waste as a "non-liquid mate....
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....tial attribute so as to consider the same as 'a management activity'. Power to impose certain prohibitions on the public - vis-à-vis littering of waste - and educating the public about the need for segregation, use of bio-degradable items for maintaining clean environment is also an essential activity of management, whereas, cleaning of the beaches as per the specifications of the municipal authorities and, upon segregation, placing it at an appropriate place to enable the municipal authorities to transport the same to the place of disposal, may fall in the category of handling of waste, simpliciter. 16. Rule 4(2) facilitates municipal authority or an operator to set up waste processing and disposal facility, in order to comply with the implementation procedure laid down in Schedule-I. In turn, Schedule-I refers to setting up/monitoring the performance of a waste processing and disposal facilities, identification/improvement of existing landfill sites or new sites for future use. This shows that the private participation is limited to waste processing and disposal and it does not extend to organising awareness programmes or implementing the prohibition of littering of waste....
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...., are available on record and in fact the Assessing Officer had never disputed the use of machinery. Since there was a factual mistake committed by the learned CIT(A), on application dated 4-3-2010 was filed under section 154 of the Act (pages 129 and 130 of the paper book). In short, the plea of the learned Counsel is that the activity carried on by the assessee-company was approved by the Municipal Engineers and hence the Income-tax Department cannot assume the role of a Municipal Engineer to hold that it was not a solid waste management activity. The cleaning work involves a comprehensive process of collection, segregation, transportation and dumping of waste in a systematic manner. In the absence of a definition of 'solid waste management', under Income-tax Act, the meaning assigned to the word 'solid waste management' under the MSW (Management and Handling) Rules, 2000 should be adopted and, as per the said rules, collection, transportation and disposal of solid waste are the main components of solid waste management (SWM) and once these essential services are provided, an assessee is entitled to claim deduction under section 80-IA of the Act. If there is any dispute with rega....
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....the purpose for which it was made. In the case of S.P. Gupta v. Union of India [1981] Suppl. SCC 87 Court observed that a section enacted half a century ago should be understood in the present day context; a meaning of an expression cannot remain static since interpretation of a provision must keep pace with the changing concepts and values. Since laws are intended to serve a social purpose, it cannot be interpreted without taking into account the social, economic and political setting in which it is intended to operate. 26. Bearing the aforementioned principles in mind, we embark upon the arduous task of giving a proper meaning to the expression "Solid Waste Management system". We have carefully gone through the report of Environmental Audit of Municipal Solid Waste Management, World Bank International Development Studies, position paper of Solid Waste Management Sector of India and Rules framed under the guidance of Ministry of Environment and Forests etc. 27. In our considered opinion, the intention of the Legislature is to give a fillip to any enterprise or an undertaking which is engaged in the field of operating infrastructure facilities such as solid waste management syste....