2020 (1) TMI 463 - AT - Income Tax

Deduction u/s 80IA(4) - claim denied on the ground that, assessee was not engaged in development of any infrastructure facility as laid down in section 80IA(4) without appreciating the correct facts of the case - whether activity of construction of road signages and foot over bridges did not amount to development of infrastructure facility as stipulated in section 80IA(4)? - HELD THAT - Issue in the present appeal is identical to the one already adjudicated by Co-ordinate Bench of the Tribunal in assessee s own case for assessment year 2010-11 2017 (10) TMI 1506 - ITAT PUNE . The assessee has not placed on record any material to show any distinguishing features in assessment year under appeal. Therefore, we find no reason to take a different view. Following the order of Co-ordinate Bench, we hold that the assessee is not eligible for claiming deduction u/s. 80IA(4) in respect of construction of foot-over bridges and installation of road signages as they do not fall within the ambit of infrastructure facility within the meaning of Section 80IA (4) of the Act. Accordingly, appeal of the assessee is dismissed being devoid of any merit. Disallowance u/s 43B - Current Liabilities‟ shown towards advertisement tax payable to M.P. State Government as not paid till the date of audit - It is assessee‟s contention that the assessee has not claimed any deduction with respect to advertisement tax and has not debited any amount of expenditure in the Profit and Loss Account - HELD THAT - We find that the Hon‟ble Delhi High Court in the case of CIT Vs. Noble and Hewitt (I) (P) Ltd. 2007 (9) TMI 238 - DELHI HIGH COURT has held that when the assessee did not debit the amount to Profit and Loss Account as an expenditure nor had the assessee claimed any deduction in respect of the amount, the question of disallowing u/s 43B of the Act does not arise. Before us, the Revenue has not placed any contrary binding decision in its support nor has placed any material on record to demonstrate as to why the decision of Hon‟ble Delhi High Court in the case of CIT Vs. Noble and Hewitt (I) (P) Ltd. (supra) would not be applicable to the present facts - no disallowance was warranted u/s 43B of the Act and we thus, direct the deletion of disallowance.

Summary

Issues Involved:
1. Denial of deduction under section 80IA(4) of the Income-tax Act, 1961.
2. Disallowance under section 43B of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Denial of Deduction under Section 80IA(4):

The assessee, a firm engaged in the development, maintenance, and operation of infrastructure facilities such as foot over bridges and road signages on a BOT basis, filed its return for AY 2012-13 claiming a deduction of ?1,44,25,090 under section 80IA(4). The Assessing Officer (AO) denied the deduction, asserting that the activities of installing and maintaining signages did not qualify as infrastructure facilities under section 80IA(4). This decision was upheld by the CIT(A), who referenced previous Tribunal decisions in the assessee’s case for AYs 2010-11 and 2011-12, and the case of M/s. Rajdeep Publicity Pvt. Ltd. vs. DCIT.

The Tribunal reiterated that the activities of constructing foot over bridges and installing road signages do not fall within the definition of infrastructure facilities as per section 80IA(4). The Tribunal cited its earlier decision and noted that the assessee had not provided any new evidence or distinguishing facts for the current assessment year. The Tribunal concluded that the assessee is not eligible for the deduction claimed under section 80IA(4).

2. Disallowance under Section 43B:

During the assessment proceedings, the AO observed that an amount of ?16,97,494 was shown as advertisement tax payable to the M.P. State Government but was not paid until the date of audit. The AO disallowed this amount under section 43B, reasoning that the tax was part of gross receipts and its non-payment before the return filing date attracted the provisions of section 43B.

The CIT(A) upheld the AO’s decision. However, the Tribunal, upon reviewing the submissions, noted that the assessee had not debited the advertisement tax in its Profit and Loss Account and had not claimed it as a deduction. The Tribunal referenced the Delhi High Court decision in CIT vs. Noble and Hewitt (I) (P) Ltd., which held that if an amount is not debited as an expenditure nor claimed as a deduction, section 43B disallowance does not apply. Consequently, the Tribunal directed the deletion of the disallowance under section 43B.

Conclusion:

The appeal was partly allowed. The Tribunal dismissed the grounds related to the deduction under section 80IA(4) but allowed the grounds related to the disallowance under section 43B, directing the deletion of the disallowance. The order was pronounced on January 7, 2020.