Section 80IA deduction for installation of traffic signal and pedestrian foot bridge allowed as infrastructure facility being integral part of road including a bridge
ABCAUS Case Law Citation:
ABCAUS 2543 (2018) 09 ITAT
This appellant company had preferred an appeal against the revision order of the Pr. CIT passed u/s 263 of the Income-tax Act, 1961 ( Act)
The Pr. CIT had interfered with the order passed by the AO which was completed u/s 143(3) of the Act. As per the show cause notice (SCN) issued u/s 263 the Pr. CIT inter alia observed that the assessee company had claimed deduction u/s 80IA of the Act on infrastructure facility rendered in respect of bus shelter, toilet block and foot over-bridges installed within no. of cities under contract with the concerned municipal authorities. He further observed that the assessee during the relevant previous year was engaged in the business of “outdoor advertising” which could not be admitted as infrastructure development. Moreover, the construction and maintenance of the bus shelter, toilet block, foot over-bridges could not be prima-facie treated as ‘road’ within the meaning of explanation to sub-clause (c) of Clause (i) of sub section(4) of the section 80IA of the Income Tax Act, 1961.
After perusal of the reply of the assessee, the Pr. CIT held that the AO’s order passed u/s 143(3) of the Act was erroneous so far as prejudicial to the interest of the revenue and accordingly he set aside the order back to the AO with a direction to examine and verify the issues raised in the show cause notice.
Aggrieved, the assessee was before the Tribunal.
Section 80IA deduction – traffic signal pedestrian footbridge installation
The Tribunal noted that during the assessment proceedings, the assessee had replied to the query of AO in detail and justified the claims for seeking deduction u/s. 80IA of the Act and it was brought to the notice of the AO that the CIT(A) had decided this issue in favour of the assessee for an earlier AY which was upheld by the Tribunal.
The Tribunal opined that since the issue had been enquired into by the AO and also in view of the Tribunal decision in assessee’s own case on the very issue, the AO had taken a plausible view which could not be termed as erroneous so far as prejudicial to the interest of the revenue.
The Tribunal also noted that the Tribunal’s decision in assessee’s own case had been challenged by the Department before the Hon’ble High Court wherein Hon’ble High Court upheld the decision holding that the Tribunal was right in holding that the automatic traffic signal and pedestrian foot bridge would constitute infrastructure facility as contemplated in clause (a) of the explanation to sub section (4) of Section 80-IA of the Income Tax Act, 1961.
The Tribunal found that the issue was no longer res integra and the view taken by the AO was as per the Tribunal as well as the Hon’ble High Court’s order, therefore, the action of the AO could not be held to be erroneous so far as prejudicial to the interest of revenue.
Accordingly, the Tribunal held that Pr. CIT lacked revisional jurisdiction to interfere on the issue and therefore erred in doing so.