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TMI Blog2015 (10) TMI 2773X X X X Extracts X X X X X X X X Extracts X X X X ..... maintaining and operating infrastructure facility on BOT basis for Indore Municipal Corporation. The assessee had constructed foot over bridges and road signage for Indore Municipal Corporation. The assessee claimed deduction u/s. 80IA(4) in respect of the aforesaid work executed by the assessee. During the course of scrutiny assessment proceedings, the Assessing Officer held that the erection of foot over bridges and installation of road signage does not amount to creation of infrastructure facility within the meaning of section 80IA(4). The said activities are in the nature of erecting super structure. The Assessing Officer denied the benefit of deduction u/s. 80IA(4) to the assessee. Aggrieved by the assessment order dated 31-01-2013, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide impugned order accepted the contentions of the assessee and held, that the road signage are integral part of the road without which the road cannot be used effectively. As far as foot over bridges is concerned, the word used in section 80IA(4) is 'bridge'. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding for road signages cannot stand on the same footing. The later items fall in the category of facility and not basic infrastructure. The word infrastructure implies creation of fundamental facilities for communication, transport etc." (iii) We filed an appeal with the Ld. CIT(A)-IT/TP ,Pune and submitted before him that the words "making" and "providing" as used by the Ld. AO are not used in the statute i.e. in Section 80IA (4). The words used are developing, operating & maintaining any infrastructure facility. The word "developing" has a much wider connotation and it includes within its ambit all the mandatory components of an infrastructure facility. (iv) We further stated that Ld. AO has erred in making a distinction between "facility" and "basic infrastructure". No such distinction has either been made in the section nor is it intended. The term used in the statute is "infrastructure facility" which comprehensively covers infrastructure facility and all its components. (v) We also submitted that the Ld. AO has stated that the word infrastructure implies creation of fundamental facilities for communication, transport etc. We pleaded before the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified as infrastructure facility, it is not necessary that a new road has to be constructed. In fact, the notifications issued by CBDT in many cases describe the project as "improvement", "strengthening", "rehabilitation", etc. of particular road. From this description it is very much evident that no new road is constructed but only the work of improvement, etc. is carried out. It would be a fallacy to presume that the scope of the words improvement, etc. relate only to the surface of the road. In fact, making such a restrictive interpretation would also not be justifiable. The circular no. 4/2010 dt. 18.05.2010 regarding construction of additional lanes is not applicable in our case because it relates to surface of the road which is only one component. Our case pertains to another vital and mandatory component in the "development" of the overall infrastructure facility of "Road" i.e. road signages. A road contains of many components and surface is only one of them. The other components include road dividers, pavements, C.D. works, tunnels, protective works, embankments, etc. Among these, road signages is the most important and crucial component of the road. This is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate intention. The legislature always intended to give incentive to the development of an infrastructure facility. To construe the same as being restricted to some new construction only would not be the correct interpretation. In this connection, we would like to draw your attention to the provisions of section 80-IB which gives incentives to various businesses. Section 80-IB(7A) gives incentive to multiplex theatre and the words used are "building, owning and operating". Similarly sub section (7B) gives incentive to a convention centre and the words used are again "building, owning and operating". It would be pertinent to note that the word used is "building" and not "developing". Also, in sub-section (10) which provides incentive to specific housing projects the words used are "development and construction". The word used is and, which means construction of new housing project is necessary. In all these cases, the terms used are either "build" or "construct". Therefore, one may argue that a new construction is necessary for getting the incentive. However, in section 80-IA(4), unlike the above, the term used is "develop". This is clear indication that the legislative intent is so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, in our humble opinion our total project of foot-over bridges and road signages is an infrastructure facility and entitled to deduction u/s 80IA. Describing the road signages as superstructure and not infrastructure would be incorrect. In case of foot-over bridges, it is also a superstructure and has been notified as an infrastructure. What is important to note is that road signages form an integral part of the road and have to be mandatorily constructed so as to bring about the completeness of the road. The road signages are meant for the users of the road and therefore, they have to be constructed at such a height so that they can be easily viewed from a distance and also so that they do not hamper the movement of high vehicles. To achieve this objective, the height, width, material used, etc. have to be as per the technical specifications. To achieve this objective, they have to be necessarily constructed as a superstructure i.e. above the surface of the road. Can a situation be imagined where road signages are constructed on or below the surface of the road. Moreover, the road signages have to be constructed on very strong foundations due to their large span, heav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which are similar to this case, the Hon'ble ITAT, Pune had dismissed the appeals , copies of which are at page nos. 120 to 125 in the paper book already submitted earlier. The said company went in appeal before the Hon'ble Bombay High Court, Aurangabad Bench and the appeal has been admitted. The copy of the order is at page nos. 131 to 132 of the paper book. (ii) The said group company had under the then existing section 10(23G) of I.T. Act, 1961 had applied to the CBDT for approval of the project as an infrastructure facility. In this regard, the then Ld. CIT-I , Pune vide letter dt. 12.07.2002 and the then Ld. CCIT, Pune vide letter dt. 03.12.2002 had recommended the project for approval as an infrastructure facility. The copies of the letters are at page nos. 126 to 130 of the paper book. The said section 10(23G) was omitted by Finance Act, 2006 w.e.f 01.04.2007 and hence, the company had withdrew its application. In view of the above, we humbly submit before Your Honours that road signages being part of a road is an infrastructure facility and is eligible for deduction u/s. 80IA and it is our plea that the same may be allowed." 6. We have heard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structures at the Ports for storage, loading, unloading etc. and only stipulation put by this circular is that the concerned authority should issue certificate that the said structures form a part of the Port and that such structures are built on BOT or BOLT Scheme and there is an agreement that the same should be transferred to the said authority on the expiry of the time stipulated in the agreement. The C.B.D.T being the competent authority for the purpose of delegation of legislation as law making power of C.B.D.T is understood, the ambit of circular should not be enlarged to include the activity into which the assessee is engaged. There cannot be any implied enlargement of sub-section. The stand of the assessee that structures of foot over bridge and road signals are necessary to develop infrastructural facility which is road, lack merit for simple reasons that road on which signals have been put was existing before signals were put. In this background, it was rightly observed that road signals could not be said to be an integral and in-separable part of the road. They can make the use of road more convenient but it cannot be said that without the signals, the road canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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