2015 (5) TMI 73 - ITAT DELHI

Revision u/s 263 - Deduction in respect of profits and gains from Industrial undertaking or enterprises engaged in infrastructure development etc - AO finalised the assessment proceedings with a final conclusion that on the facts of the case, the assessee is eligible for deduction u/s 80IA(4) - Held that:- The assessee company is in the business of developing, operating and maintaining infrastructure facility project since its incorporation w.e.f. 5.4.2007. We also observe that the development of the toll road with controlled access and exit points and right to collect toll from the users clearly put the Expressway within the ambit of road which is a toll road. We further hold that the development of the Expressway between Noida and Agra and development of Five land parcels adjacent to Expressway are inseparable and integral part of one project and the assessee is entitled and eligible for deduction u/s 80IA (4) of the Act on the income earned and derived from the business of development of Infrastructure facility for AY 2009-10 after commencement of its business w.e.f. 5.4.2007 at the option of the assessee which cannot be denied by wrongly putting the case of the assessee in clause (b) of Explanation to section 80IA(4)(i) of the Act.

The view taken by the AO while granting deduction u/s 80IA(4) of the Act, in respect to income from sale/ sub lease of land for development, is reasonable, plausible and the same cannot be held as unsustainable and not in accordance with law and therefore, the assessment order cannot be alleged as erroneous and prejudicial to the interest of the Revenue.

The revision of the assessment order on the issue of allowability of deduction u/s 80IA(4) of the Act in regard to the income of interest accrued to the assessee from the deposit of surplus funds in the fixed deposit banks accounts and allowability of depreciation is also not valid because these issues had not been raised or pointed out in the notice issued u/s 263 of the Act and thus, it is not open and permissible for the Ld. CIT to revise the assessment order on these grounds. Since assumption of jurisdiction u/s 263 of the Act was not valid on these two issues, the grounds raised by the assessee on merit become academic and infructuous.

Ld. CIT has not conclusively decided the issue with a conclusion in one way or the other and has left it midway, which covers this case in favour of the assessee by the recent judgment of Hon'ble Delhi High Court in the case of Globus Infocum Ltd. vs. CIT (2014 (9) TMI 18 - DELHI HIGH COURT ). Thus the impugned order u/s 263 of the Act was not valid and the same was void ab initio. - Decided in favour of the assessee.