TaxTMI 
TaxTMI 
2017 (10) TMI 779
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....s 80IA(4) of the I.T Act even though the assessee was not carrying out the business of development, operation and maintenance of the infrastructure facilities and had transferred the operation and maintenance of the facilities in violation of the agreement with the Government/Statutory body? (2) Whether on the facts and circumstances of the case, the I.T.A.T erred in directing the A.O. to allow deduction u/s 80IA(4) of the I.T. Act even though the assessee transferred rights of operation and maintenance of infrastructure facility to M/s Rameshwarma Toll Pvt. Ltd (RTPL) with effect from 18/11/2001 on lump sum payment of Rs. 328 lakhs p.a., and therefore the deduction u/s 80IA(4) would be available to such transferee enterprise (RTPL....
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....ld, operate and transfer basis at its own cost by the State of Rajasthan. The assessee had to raise its own funds and would be entitled to recover the investment along with profit through toll collection for a period of five years as authorised by the Rajasthan Government under the agreement. One of the clauses of the agreement provided that the assessee will not assign the property or transfer the benefit of the lease to any third party nor shall create any mortgage in favour of any financial institution or individual. (ii) After completion of the construction work, the assessee assigned the task of maintenance and toll collection of the road for a period of one year to one RTIL under an agreement dated 10.11.201. In lieu thereof,....
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....eduction under sub-section (4). The agency - RTIL which was maintaining and operating the infrastructure facility could alone claim the deduction failing which there would be double deduction. 4. Sub-section (1) of Section 80IA provides that where the gross total income of an assessee includes any profit and gain derived by an undertaking or an enterprise from any business referred to in sub-section (4) called as the eligible business, subject to the provisions of this section there shall, in accordance with and subject to the provisions of this section, be 100% deduction of the profits and gains derived from such business for consecutive ten assessment years while computing the total income of the assessee. Sub-section (4) of Section 80....
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.... facility is transferred to another enterprise for the purpose of operating and maintaining such facility in accordance with the agreement of the Central or State Government or the local or statutory authority, the section would apply to the transferee enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would be entitled to the deduction, had the transfer not taken place. 6. The proviso to sub-section (4) thus makes an enabling provision providing a deeming fiction whereby upon transfer of any infrastructure facility for the purpose of operating and maintaining, the tra....