TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1896
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....eal of the assessee. Aggrieved by the order of Ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds : "1. The order of the learned Commissioner of Income-tax (Appeals) is contrary to law and to the facts and circumstances of the case. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in allowing deduction u/s. 80IA(4) of the Act when the assessee was not engaged in development of new infrastructure project. 3. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in not appreciating the fact that merely increasing the thickness & widening of an existing road would not qualify as a new infrastructure project. 4. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in holding that the contract work undertaken by the assessee was of adding extra lane. 5. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in not appreciating the fact that the claim of the assessee for deduction u/s 80IA(4) does not fulfill conditio....
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.... was not derived from the business of the undertaking and was therefore not eligible for deduction. He accordingly denied the claim. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A), who decided the issue in favour of the assessee by holding as under : "3.3 During the appellate proceedings the Ld counsel of the appellant has submitted that two projects were executed by the appellant and the claim of deduction u/s 80IA(4) was rejected on the ground that the specification and the nature and character do not match to the situation referred to in circular No 4 of 2010. The Ld counsel has contended that the AO has given finding that it is merely a case of widening of the road which has not resulted in the additional lanes and merely relaying of existing roads has been low. The Ld counsel has submitted that with respect to the road proposed Ahmednagar - Taklikazi-Jamkhed- Kharade had many sugar cane traffic and for this purpose the road was required to be strengthened by providing 45 mm thick BBM apart from widening of the same to 10 mtrs and similarly carriageway is to be widened to 5.5 meters on certain sections of the road. The appellant has further added ....
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....(4). The ITAT held as under: 10. The CBDT has clarified the expression "new Infrastructure facility". In fact the said circular supports the claim of the assessee that the widening of existing road by constructing additional lane as a part of the highway project is a new infrastructure facility. So far as the Hanumangarh -Suratgarh Road is concerned the width is also increased as one additional lane is developed. In addition to increasing the thickness of the road, it is pertinent to note here that the project report which is the part of the agreement clearly suggest that the existing road was not capable of taking the increased load of the vehicles and hence, there was necessity for strengthening as well as widening the said road. It is not the case that merely some minor work like carpeting has been done to be done but the additional lane of 1 mtr. widening with 12 cum increased thickness has been done. 11.In the case of Tata Hydro Electric Power Supply Co. (supra) the old irrigation dam was strengthened by using modern technique. On the expenditure incurred for strengthening of the dam, the assessee claimed the development rebate with the plea that it was a new plant. As per....
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....le and held that the interest accrued of Rs.9,60,898/- was not derived from the undertaking and the contention of the assessee that FD was required to be made as per the terms and conditions of the loan for business of the project not tenable and thus the said amount was added to the total income. The AO has discussed the issue in para 3.1 of the order. 4.1 During the appellate proceedings the Ld counsel of the appellant has filed the document specifying the terms of loan which reveals that keeping an FD was an essential part for availing the loan and thus it has a direct nexus with the earning of income derived from FD which ought to have been treated as income from business of the project eligible for 80IA(4) deduction. The appellant referring to the terms and conditions of the loan from SBI, condition No 9B(c) required the appellant to maintain debt service reserve account during the currency loan account and to fulfill the condition the CD kept the FD from which the said interest account. The appellant in this regard has placed reliance on the following judicial decisions. 1. Jaiprakash Power Venture Ltd Vs DCIT ITA No 4249/Del/2011 2. Maxcare Laboratories Ltd Vs ACIT (200....
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....rightly allowed the claim of deduction. He thus supported the order of Ld. CIT(A). 6. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of deduction u/s 80IA(4) of the Act. 7. It is an undisputed fact that during the year, assessee had earned profits from 2 projects and the profits earned therefrom was claimed as deduction u/s 80IA(4) of the Act. We find that Ld. CIT(A) while deciding the issue has given a finding that the assessee had undertaken the strengthening of the roads as well as widening of the roads on certain sections of the road and had also built up gutters as per the terms of the contract and it was a case of improving and strengthening of the State Highway and not merely a case of relaying of existing roads. He has further given a finding that the entire project was carried out as per the detailed specification for road and bridge work issued by Ministry of Transport and Government of India and further in assessee's own case in A.Y. 2006-07, the Hon'ble Tribunal has held that improving and strengthening of road amounts to creating new infrastructure facility and is entitled to deduction u....