2021 (12) TMI 370 - HC - Income Tax

Deduction u/s 80IA - Revenue s contention is that the assessee is only an advertising firm putting banner for their own purpose and, therefore, the question of claiming of any deduction under section 80IA of the Act would not arise - HELD THAT - Tribunal has clearly held that the assessee is engaged in infrastructure development which involves construction of foot over bridge as well as the bus shelter and, therefore, the assessee is entitled to deduction under section 80IA - Tribunal followed the decision of this Court in the case of Commissioner of Income Tax, Kolkata-IV, Kolkata vs. Selvel Advertising Pvt. Ltd 2010 (4) TMI 1074 - CALCUTTA HIGH COURT which was also a similar matter wherein an advertising company engaged in infrastructure development has erected automatic traffic signal and pedestrian foot over bridge and the question was whether this would constitute infrastructure development as contemplated in clause a of the Explanation to subsection 4 of section 80IA of the Act. The Division Bench by the said judgement had upheld the decision rendered by the Tribunal and dismissed the Revenue s appeal. This decision has attained finality. Therefore, we are of the view that the decision of the Tribunal in so far as the claim of deduction made by the assessee under section 80IA of the Act requires to be sustained. Accordingly, substantial questions of law nos.1 to 4 are answered against the Revenue. Depreciation on asset put to use less than 180 Days - Whether Tribunal erred in allowing 100% depreciation in hoardings which have been put to use for less than 180 days in place of 50% as per section 32 1 ? - HELD THAT - As in assessee s own case for the assessment year 2005-06, the decision was rendered in favour of the assessee and though the Revenue has filed appeal before this Court in 2009 (12) TMI 1044 - CALCUTTA HIGH COURT but this was not one of the substantial questions of law, which has been admitted for consideration. Thus it goes without saying that the decision in respect of the substantial question of law no.5 has been accepted by the Revenue. Accordingly, the said question is also decided against the Revenue. Depreciation on hoardings - allowing depreciation @ 100% on hoardings treated as temporary structures as against the treatment given by the Assessing Officer as plant and machinery allowing depreciation at 15%? - HELD THAT - The question is covered by the decision of the assessee s own case in Principal Commissioner of Income Tax, Kolkata-IV vs. Vantage Advertising Pvt. Ltd., 2019 (7) TMI 1888 - CALCUTTA HIGH COURT following the same substantial questions of law was decided against the Revenue. In the result, the appeal fails and dismissed and the substantial questions of law are answered against the Revenue.

Summary

Issues:
1. Condonation of delay in filing an appeal by the Revenue.
2. Interpretation of provisions under section 80IA of the Income Tax Act.
3. Allowability of deduction under section 80IA.
4. Depreciation on hoardings and temporary structures.
5. Applicability of past judgments on similar issues.

Issue 1: Condonation of Delay

The High Court considered an application by the Revenue for condonation of a 470-day delay in filing an appeal. Despite an unsatisfactory explanation, the Court, mindful of deciding an appeal under section 260A of the Income Tax Act, heard arguments from both sides. The Court noted that for three out of four assessment years, the tax effect was below the threshold limit, rendering the Revenue unable to pursue the appeal. Consequently, the Court exercised discretion and condoned the delay in filing the appeal.

Issue 2: Interpretation of Section 80IA

The appeal under section 260A of the Income Tax Act was against a composite order for four assessment years. The Revenue raised substantial questions of law regarding the interpretation of section 80IA. The Tribunal had to decide whether certain structures like bus shelters and foot over bridges fell within the definition of infrastructure facility under section 80IA. The Court analyzed the Tribunal's decision and past judgments to determine the applicability of the provisions to the case at hand.

Issue 3: Allowability of Deduction under Section 80IA

The Court examined whether the assessee was entitled to a deduction under section 80IA for the assessment year 2009-10. The Revenue contended that the assessee, an advertising firm, was not eligible for the deduction. However, the Court found that the Tribunal had correctly determined that the assessee was engaged in infrastructure development, making them eligible for the deduction under section 80IA. The Court relied on past decisions and upheld the Tribunal's findings on the matter.

Issue 4: Depreciation on Hoardings and Temporary Structures

Another question raised was the allowance of 100% depreciation on hoardings used for less than 180 days, contrary to the prescribed 50% under the Income Tax Act. The Court considered the treatment of hoardings as temporary structures and the depreciation rates applied by the Assessing Officer. The Court referenced past judgments to decide on the correct treatment and depreciation rates for hoardings, ultimately ruling against the Revenue on this issue.

Issue 5: Applicability of Past Judgments

The Court referred to past judgments in similar cases to decide on issues related to deduction under section 80IA and depreciation rates for hoardings. The Court found that decisions in the assessee's favor in previous cases were applicable in the present matter as well. By considering past judgments, the Court provided a consistent interpretation of the law and resolved the issues raised in the appeal.

In conclusion, the High Court's judgment addressed various legal issues, including the condonation of delay, interpretation of section 80IA, allowability of deductions, depreciation rates, and the applicability of past judgments. The Court carefully analyzed the facts, arguments, and relevant legal provisions to deliver a comprehensive decision on each issue raised in the appeal.