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TMI Blog2024 (5) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ned year. In the case of ITO vs. Keval Construction [ 2013 (7) TMI 291 - GUJARAT HIGH COURT] held that in case of disallowance / addition on account of non-deduction of TDS liability, this would increase the profits of the assessee from the business of developing housing projects and therefore, the ultimate profit would increase and the same would qualify for deduction under Section 80-IB of the Act. In the case of Virtusa (India) Pvt. Ltd [ 2013 (10) TMI 1395 - ITAT HYDERABAD] ITAT held that the amount of statutory disallowance under Section 40(a)(ia) of the Act has to be considered as business profit eligible for deduction under Section 10A of the Act. In the case of Commissioner of Income-tax vs. Gem Plus Jewellery India Ltd. [ 2010 (6) TMI 65 - BOMBAY HIGH COURT] the High Court held that where the Assessing Officer had enhanced income by disallowing employers as well as employees contribution towards Provident Fund / ESIC, exemption under Section 10A had to be granted on such enhanced income. Accordingly, when the claim of the assessee for grant of deduction under Section 80-IA(4) of the Act has not been disputed / disturbed by the Department in either the earlier or later / su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd delay in filing of the present appeal came within the knowledge of the concerned officer. It was submitted before us that the delay in filing of the present was due to bona fide reasons and hence same kindly be condoned. 4. In response, Ld. Counsel for the assessee also did not object to the delay in filing of the present appeal. 5. Accordingly, looking into the reasons cited for delay in filing the present appeal, in the interest of justice, the delay in filing of the present appeal is hereby being condoned. On Merits: 6. The brief facts of the case are that the assessee is engaged in business of building infrastructure facilities and earning income by way of collecting toll from vehicles running on roads constructed by the assessee. 7. During the course of assessment, the Assessing Officer observed that assessee has claimed certain project facility expenses to the tune of Rs. 5,90,92,431/- as revenue expenses. The Assessing Officer was of the view that the aforesaid project facility expenses claimed by the assessee as revenue expenses are not a revenue expenditure, but a capital expenditure. Therefore, the same cannot be allowed as revenue / business expenditure. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee made the following observations:- 2.11. Appellant company is engaged in infrastructure facility in the form of operate and maintain toll road which is covered u/s. 80IA(4)(i) of the Act. The appellant has been granted the work of operation and maintenance of toll vide letter of award NHAI/OMT/RFP/8/2009-10/554 dated 01/11/2010. Appellant has filed return of income on 29/11/20)4 within the prescribed time limit. In view of the above, appellant is eligible for deduction u/s. 80IA(4) of the Act. The CBDT vide Circular No. 37 of 2016 dated 02/11/2016 has settled the position that the disallowances made u/s, 32, 40(a)(ia), 40A(3), 43B etc. of the Act and other specific disallowances related to the business activity against which chapter VIA deduction has been claimed result in enhance of the profit of the eligible business and that deduction under chapter VIA is admissible on the profit so enhanced by disallowance. The appellant has not made the claim of section 80IA(4) as there was a loss from business after claiming project expenditure as revenue expenditure at the time of filing of return. 2.12. Honourable Supreme Court in the case of Mahalaxmi Sugar Mills [160 ITR 920] has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-IA(4) of the Act was allowed to the assessee after due verification. The Counsel for the assessee accordingly, submitted that firstly, the assessee has been allowed deduction under Section 80-IA(4) of the Act both for prior and subsequent assessment years and claim of deduction under Section 80-IA(4) of the Act had never been denied / disputed in the hands of the assessee, therefore, Ld. CIT(A) has not erred in facts and in law in allowing the claim of deduction in respect to deduction under Section 80-IA(4) of the Act in respect of enhancement made by the Assessing Officer in light of the Gujarat High Court decision in the case of ITO vs. Keval Construction 33 taxmann.com 277 (Gujarat) . Secondly, even in the case of associated concern of the assessee, the similar expenditure had been allowed as revenue expenditure and therefore, even otherwise, in the alternative, the assessee company should have been allowed the claim of such expenditure as revenue expenditure. 10. We have heard the rival contentions and perused the material on record. 11. Looking into the instant facts placed before us, we find no infirmity in the order of Ld. CIT(A), so as to call for any interference. From ..... X X X X Extracts X X X X X X X X Extracts X X X X
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