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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 ..... venue by: Shri Rajesh Damor ORDER Vikas Awasthy, JM : The appeal has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-IT/TP, Pune dated 28-08-2013 for the assessment year 2010-11. 2. In appeal, the Revenue has assailed the findings of Commissioner of Income Tax (Appeals) in deleting the addition of ₹ 61,77,832/- by allowing the claim of deduction u/s. 80IA(4) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) of the assessee. The only issue raised in the appeal is; Whether erection of foot over bridges and installation of road signage can be construed as infrastructure facility within the meaning of Explanation to section 80IA(4) of the Act? 3. The brief facts of the case are : The assessee is engaged in the business of developing, 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 scru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unicipal Corporation. Under this, the firm has constructed footover bridges and road signages in the IMC area. In the explanation to section 80IA (4), a bridge and a road is included in the definition of infrastructure facility. The foot-over bridges constructed by the firm are covered under the expression bridge. The road signages constructed by the firm are covered under the expression road. As such, the facility constructed by the firm is an infrastructure facility as defined in Section 80IA(4) and therefore, it is eligible for deduction u/s 80IA. (ii) In the assessment u/s 143(3) the Ld. AO disallowed the deduction u/s 80IA on the basis of an incorrect interpretation of the term infrastructure facility. The Ld AO in his assessment order stated that .... Making of road and then afterwards providing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said section 800 was appended to the tender document as Appendix I. (iii) From the above, it is very much clear that road signages form a mandatory part and parcel of a road. How can the expression road signages be treated as something not forming part of or not related to the expression road . A road is a facility for plying of vehicles, their smooth traffic, etc. This facility cannot become worthy of use without the road signages. Can a situation be imagined that road signages are constructed without there being a road. It is impossible. If there is a road there have to be signages and if there are signages there has to be a road. The signages are forming an integral and inseparable part of the road. Therefore, the signages are covered under the expression road. (iv) For a project to be treated / 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efine; Add detail and fullness to; To make available and effective to fulfill a particular end or need; (Source : American Heritage Dictionary) In the both the above sets of definitions, one thing is crystal clear that there is an improvement to something which is in existence. The appellant has developed an infrastructure facility viz. Footover Bridges and Road Signages i.e. a Road. By the development of these facilities, the capability of a Road is increased, it becomes more advanced and is brought to an effective state. The Road is more strengthened and improved and comes to a state where it can fulfill the particular need or end. A Road cannot become worthy of use or a facility it is intended to be without the road signages which are a mandatory and integral part of it. The term develop has been put into the section with a deliberate 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 provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It should also cover within its ambit a bridge which is meant for the use of pedestrians to cross over a road. A foot-over bridge is a bridge for all intents and purposes and should be treated as infrastructure facility. The CBDT have now accepted the wider connotation of the term bridge. It is evident from the Notification no. 10 dt. 24.01.2005 issued by CBDT vide which foot-over bridges have been notified as infrastructure facility. Copy of the notification is at page nos 117 to 118 in the paper book already submitted. (viii) In our case, the project is a composite one which includes the foot-over bridges and road signages. The purpose behind constructing this facility is the same and so, it cannot be broken into two parts saying one part is infrastructure and the other is not. The incentive granted by the legislature is to a overall facility and not to a part of the facility. Therefore, 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 superst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of that. As in the case of port, the conditions are also satisfied in our case. The road signages are part of the road and are an infrastructure facility. The total facility is constructed on BOT basis and is to be handed over to IMC at the end of the concession period. Therefore, on the same analogy, road signages are also an infrastructure facility and eligible for deduction u/s 80IA. (x) It is well settled principle of law that a liberal interpretation should be adopted in case of incentive provisions. The spirit of the law rather than the letter of the law should be followed and too strict an interpretation would result in seeing the skin and missing the soul of the section. When a wider scope is attached to the terms bridge and port, a similar approach needs to be adopted in case of road signages also. 3. (i) In the case of our group company Rajdeep Publicity Pvt Ltd., the facts 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that tender document of PMC trades the project of road traffic signals and foot over bridge as helpful to develop infrastructural facilities is of no relevance in this regard. This issue has got to be decided with reference to provision of law as contained in Income Tax Act as rightly held by the CIT(A). As regards submission of assessee that Section 80IA(4) uses the term 'development of infrastructural facility and not construction. The term development has wider connotation than construction. From the language of relevant subsection 80IA, it could be seen there cannot be any development of infrastructural facility without constructing the infrastructure as defined in Explanation to Sub-section (4) of Section 80IA. 3. As regards the submission of assessee that Circular No. 10/2005 dt. 16.12.2005 state that for the purpose of Section 10(23G) and Section 80 IA, structure includes 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 agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility cannot be said that an infrastructural facility in the nature of road as defined in Explanation to Section 80IA(4). 5. In view of the above, we hold that the assessee did not develop any infrastructural facility in the nature of road as defined in Explanation to sub-section (4) to 80 IA of Income Tax and therefore, the action of the A.O denying the deduction to assessee under 80 IA need no interference from our side. We uphold the same. Similar issue arose in A.Y. 2004-05 and 2005-06. Facts being similar and following the same reasonings, the rejection of claim u/s. 80IA(4) need no interference from our side. 6. As a result, all the appeals of the assessee are dismissed. 8. In the instant case, the assessee has constructed three foot over bridges and has installed road signage for the Indore Municipal Corporation. The major part of income during the year was received on account of execution of work of road signage. Thus, the facts in the present case are identical to the one adjudicated by the Co-ordinate Bench in the group concern of the assessee. Respectfully following the same, we hold that the activities carried on by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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