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TMI Blog2018 (2) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs have to be regarded as plant and machinery on which allowable depreciation as per Rules was only 15% - CIT(A) directed the AO to allow the claim of the assessee for depreciation at 100% on hoardings - Held that:- Tribunal has already taken a view in favour of the assessee in the past assessment referred to in the earlier part of this order. It cannot be argued by the ld. DR at this stage that in none of these decisions the question whether the hoardings were temporary or permanent structure was considered by the Tribunal. Going by the principle of consistency we are of the view that it would be just and proper not to take a view different from the view which has already been taken in assessee’s own case in the past. Disallowance of the claim of deduction u/s.80IA - Whether Foot Over-bridges as well as Bus Shelters are not "Road" the revenue from which is eligible for deduction u/s. 80IA - Held that:- We find that identical issue has been considered and decided in assessee’s own case [2015 (6) TMI 593 - ITAT KOLKATA ] wherein confirmed the assessee’s entitlement for deduction u/s 80IA for foot over bridges and bus shelters TDS u/s 194I OR 194C - addition u/s 40(a)(ia)- pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that no new facts or findings were brought on record by the AO to disallow the claim for deduction of the aforesaid expenditure. Since the disallowance for A.Y.2009-10 was deleted by CIT(A), the disallowance for A.Y.2010-11 was also deleted by the CIT(A). 5. Aggrieved by the order of CIT(A) the revenue has raised ground no.1 before the Tribunal. 6. We have heard the rival submissions. At the time of hearing it was brought to our notice that as against the order of CIT(A) for A.Y.2009-10 dated 12.06.2012 (CIT(A)-XII, Kolkata) the revenue preferred an appeal before the Hon ble ITAT but the addition on account of disallowance of purchase from M/s. B.M.Sales Corporation was not challenged by the revenue. Thus the order of CIT(A) for A.Y. 2009-10 has become final. Since the impugned disallowance is based only on the findings in the order of assessment for A.Y.2009-10 and since the said disallowance has now been deleted we are of the view that CIT(A) was fully justified in deleting similar addition made in A.Y.2010-11. We find no ground to interfere with the order of CIT(A). Accordingly, ground No.1 raised by the revenue is dismissed. 7. Ground No.2 raised by the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid conclusion support the conclusion of CIT(A). 1. Advance Construction Co.Pvt. Ltd, Mumbai vs ACIT (2008-TIOL-281-ITATMUM): 2. ACIT vs Eicher Ltd. (2006) (101 TTJ 369) (Del-ITAT): Birla Group Holdings vs DCIT (2007) 13 SOT 642 (ITAT Mumbai). 3. Wimco Seedling Ltd. Vs DCIT (2007) 109 TTJ 462 (Del) (TM) We find no grounds to interfere with the order of the CIT(A). Accordingly, Ground No.2 raised by the revenue is dismissed. 12. Ground No.3 raised by the revenue reads as follows :- 3. In the facts and circumstances of the case the Ld.CIT(A) has erred in holding the advertisement hoardings as temporary structure and allowing depreciation @ 100% without appreciating that the hoardings are in fact permanent structures meant for longer duration and needs to be treated as Plant Machinery which attracts 15% depreciation only; thereby deleting disallowance of ₹ 1, 86,71,881/- 13. The assessee had claimed depreciation at 100% on hoardings structure. The Assessee is a company. It is engaged in the business of out-door advertisement. The assessee claimed depreciation at 100% on hoarding structures. Under part-A in Appendix-I to the Income Tax Rules, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to him the hoardings in question cannot be regarded as purely temporary erection. 17. We have given a very careful consideration to the rival submissions. We are of the view that the Tribunal has already taken a view in favour of the assessee in the past assessment referred to in the earlier part of this order. It cannot be argued by the ld. DR at this stage that in none of these decisions the question whether the hoardings were temporary or permanent structure was considered by the Tribunal. Going by the principle of consistency we are of the view that it would be just and proper not to take a view different from the view which has already been taken in assessee s own case in the past. Even in the order of assessment the facts to substantiate a stand taken by the revenue have not been brought out. 18. Keeping in mind the precedents on the issue we are of the view that the order of CIT(A) does not call for any interference. Accordingly ground no.3 raised by the revenue is dismissed. 19. Ground No.4 raised by the revenue reads as follows :- 4. In the facts and circumstances of the case the Ld.CIT(A) has erred in deleting the disallowance of the claim of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cility or starts providing telecommunication service or develops an industrial park or develops a special economic zone referred to in clause ( iii ) of sub-section (4) or generates power or commences transmission or distribution of power or undertakes substantial renovation and modernisation of the existing transmission or distribution lines : Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause ( a ) or clause ( b ) or clause ( c ) of the Explanation to clause ( i ) of sub-section (4), the provisions of this sub-section shall have effect as if for the words fifteen years , the words twenty years had been substituted. (4) This section applies to- ( i ) any enterprise carrying on the business of ( i ) developing or ( ii ) operating and maintaining or ( iii ) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely :- ( a ) it is owned by a company registered in India or by a consortium of such companies 1[or by an authority or a board or a corporation or any other body established or constituted under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and extension to agreement dated 20 November 2004) Foot over bridge 3. Corporation of Madurai 06 October 2008 for a period of 6 Years Road Median 4. Mysore City Corporation 31 March 2004 for a period of 3 years commencing from 01 August 2004 Street Lighting 5. Mysore City Corporation 18 June 2007 for a period of 3 years (extension letter to agreement dated 31 March 2004) Street Lighting 6. Mysore City Corporation 25 July 2007 for a period of 5 years commencing from 01 December 2007 Street Lighting 7. Corporation of Madurai 29 January 2009 for a period of 15 years Street Lighting 23. It was not disputed by the AO that on identical facts the Hon ble ITAT, Kolkata Bench in the case of Vantage Advertising Pvt. Ltd in ITA Nos. 1054 1055/Kol/2008 order dated 30.06.2009 (Assessee s own case) and in another cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was given license to collect advertisement revenue by display of advertisement panels. The advertisement revenue collected by the Assessee retained the character of income derived from the business of the assessee from developing and maintaining lnfrastructure facility and does not change as income from 'advertisement business . The immediate source of advertisement income is the infrastructure facility business and the effective source of the genealogy of the source of the advertisement income is the infrastructure facility business. There was a direct nexus between the advertisement revenue and infrastructure facility business of the assessee. According to the CIT(A) from the terms of the agreements between the Assessee and the various municipal authorities, it was clear that the advertisement revenue was part of and directly related to said infrastructural facility. The CIT(A) also referred to the decision of the Mumbai Bench of ITAT in the case of ITO vs. E. A. Infrastructure Operations Pvt. Ltd. (2011) 135 TTJ 239 (Mum ITAT) wherein on an identical claim such as the one made by the Assessee in the present case, the concept of 'derived from' was explained as h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has raised ground no.4 before the Tribunal. 27. The ld. DR submitted before us that the CIT(A) has not seen that the assessee was in the business of advertisement and not development of infrastructure facility. His further submission was that he has also not examined that the quantification of the amount of eligibility of deduction u/s 80IA of the Act. According to him a part of the advertisement cannot be considered as derived from development of infrastructure facility. According to him the CIT(A) has co-terminus power with that of the AO and he ought to have examined the quantum of deduction that should be allowed u/s 80IA of the Act. He prayed that the matter should be remanded to the CIT(A) on the above aspects. 28. The ld. Counsel for the assessee, on the other hand, pointed out that the only issue raised in ground no.4 by the revenue as to whether foot over bridges can be considered as development of road for the purpose of allowing deduction u/s 80IA of the Act. He pointed out that there is a reference to bus shelters in the grounds of appeal which is erroneous and had obviously referred to only road median and lighting carried out by the assessee for municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. Counsel for the assessee. For the sake of ready reference we may refer to the order of the Tribunal in assessee s own case in ITA Nos. 1388 to 1390/Kol/2012 for A.Y.2004-05, 2006-07 to 2009-10 dated 10.03.2015 wherein this aspect has been considered and the tribunal as follows :- 8. We have carefully considered the submissions and perused the records. We find that the issue on merits as to whether the assessee is entitled to deduction u/s 80IA of the Act for construction of foot over bridge as well as bus shelter is covered in favour of assessee by the decision of the Tribunal and the Hon ble Calcutta High Court as referred in the submissions of the ld. Counsel of the assessee. The Tribunal in assessee s own case as well as in the case of DCIT vs Selvel Advertising Pvt. Ltd. (supra) has held that bus shelters and foot over bridges should be considered as part of the infrastructure facility for claiming deduction u/s 80IA of the Act. This issue was also supported by the decision of the Hon ble Calcutta High Court in the case of Selvel Advertising Pvt. Ltd. wherein the Hon ble High Court has upheld ITAT s decision quashing the revision order passed by ld. CIT u/s 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53(2) of the Act. No leave was obtained to urge the ground in regard to the status as regards the liability to tax. The Tribunal erred in law in setting aside the findings given by the Appellate Assistant Commissioner that the assessee was a separate entity and the assessment made in the case of the assessee should be treated as substantive. 8.3. Thus from the above we hold that the issue which was not the basis of disallowance by the AO and the same was not the subject matter of consideration by the ld. CIT(A) and the same was also not the subject matter of the ground of appeal taken before ITAT the issue now being raised by the ld. DR need not be adjudicated by us. Hence on the issue as to whether foot over bridges and bus shelters qualify for deduction of section 80IA of the Act we hold that the ld. CIT(A) is correct in holding the assessee s entitlement for deduction u/s 80IA of the Act. Accordingly this ground of appeal raised by the revenue stands dismissed. 30. Respectfully following the decision of the Tribunal we hold that there is no merit in ground no.4 raised by the revenue. 31. With regard to the other contentions of the ld. DR before us we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %. 35. The AO referred to CBDT Circular No.715 dated 08.08.1995 wherein the scope of an advertising contract has been explained by CBDT as follows :- .. Question 1 : What would be the scope of an advertising contract for the purpose of section 194C of the Act? Answer: The term 'advertising' has not been defined in the Act. During the course of the consideration of the Finance Bill, 1995, the Finance Minister clarified on the Floor of the House that the amended provisions of tax deduction at source would apply when a client makes payment to an advertising agency and not when advertising agency makes payment to the media, which includes both print and electronic media. The deduction is required to be made at the rate of 1 per cent. It was further clarified that when an advertising agency makes payments to their models, artists, photographers, etc., the tax shall be deducted at the rate of 5 per cent as applicable to fees for professional and technical services under section 194J of the Act. .. 36. The AO thereafter came to the following conclusion for disallowing and adding a sum of ₹ 10,12,45,605/- to the total income of the assessee u/s 40(a)(ia) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in the said section to treat, inter alia, the assessee as defaulter where there is it shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in sub-section (1) of section 139 . It was argued that Section 40(a)(ia) of the Act refers only to the duty to deduct tax and pay to government account. It there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provision, the assessee can be declared to be an assessee in default u/s 201 of the Act and no disallowance can be made by invoking the provision of section 40(a)(ia) of the Act. 38. The Assessee also relied on the decision of the Hon ble Jurisdictional High Court, in its judgement vide CIT Vs. M/s S.K. TEKRIWAL 361 ITR 432 (Cal) wherein it has been held the same issue and decided the same in the favour of the assessee that if there is any sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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