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2013 (6) TMI 351 - AT - Income TaxDeduction u/s 80IA denied - whether deduction u/s 80IA is admissible to those assessee who develop, operate and maintain any infrastructure facility? - assessee company was allotted a contract for execution of the work by the Airport Authority of India to undertake the work of extension of runway with shoulders, turning paid, stop way, construction of isolation bay, box culvert, perimeter road and allied works - Held that:- Section 80IA(4) does not require that there should be a direct agreement between the transferee enterprises and the specified authority. As decided in Ayush Ajay Construction Ltd. vs. ITO (2000 (7) TMI 225 - ITAT INDORE) assessee company having obtained a contract for construction of a bridge from the original tenderer through its promoter by a valid assignment and executed the construction work stepping into the shoes of said tenderer with the approval of the State Governmentis entitled to deduction u/s 80-IA. Also in Chetak Enterprises [2005 (1) TMI 338 - ITAT JODHPUR] that the erstwhile firm which had obtained the contract for construction of road and completed the work having been converted into a company under Part IX of the Companies Act whereby the latter acquired all the assets, rights and liabilities of the erstwhile firm, assessee-company fulfilled all the conditions laid down in s. 80-IA(4)(i) and is entitled to claim. Thus in the present case the annual report of the assessee company that does not speak that the assessee is a developer. Moreover, the AO has not brought on record any material to suggest that the assessee is not a developer. The deduction is available to the infrastructure facilities and the assessee has to develop infrastructure and not to operate the same. The assessee having fulfilled all the conditions as laid down in section 80-IA therefore, is eligible for deduction. In favour of assessee. Quota written off - revenue v/s capital - Held that:- Said quota is a license quota which is a tradable commodity and which has to be utilized within a period of three years and third year was ending in 2004 falling in the impugned year, since the assessee’s export business is of ready made garments and the balance lying in the Quota account has been written off, the assessee had purchased Quota which was for a limited period of three years and without purchasing this quota, it was not possible for the assessee to do business and make trading. Even if, the findings of the authorities below are agreed the assessee had obtained enduring benefit for three years, the same cannot be a conclusive test to be applied blindly and mechanically. Since the assessee had incurred expenditure, which advantage consists facilitation of trading operations of the assessee for enabling the assessee to make the export it is to be treated as revenue expenditure as relying on Empire Jute Co. Ltd. vs. CIT [1980 (5) TMI 1 - SUPREME Court].In favour of assessee. Disallowance being the amounts written off - Held that:- The assessee is obliged to give advance to labours and suppliers of the material during the course of business, which is sometime left over and is not recoverable and these advances have been left over and had been written off during the year. Even as per section 36(1)(vii), such expenses, when written off by the assessee unilaterally in the post amendment in the Act, has to be allowed, as expenditure and otherwise also this is business expenditure to be allowed under section 36(1)(vii). No disallowance on this account can be made. In favour of assessee.
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