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2018 (11) TMI 1794 - ITAT BENGALURUEligibility of deduction u/s 80IA - strengthening of existing road - disallowance relating to existing four lanes 28 km to 67kms - HELD THAT:- Assessee is operating and maintaining the already existing road for which the assessee is entitled to annuity along with the annuity for developing, maintaining and operating the other part of the road. With regard to the argument of the assessee that the service lane was developed by the assessee pursuant to the agreement we have considered opinion definition of service road and main lane as mentioned in Schedule D to agreement, are different and laying down of the service lane cannot be entitled the assessee to claim the benefit of laying down of the new infrastructure. we do not find that the benefit of maintenance and creation of service road can be given to the assessee. The nature of activity which was undertaken by the assessee as we had understood from scope of work (supra) was only of maintaining and operating of the existing four lanes 28 km to 67kms. If we allow this kind of activity to fall with the ambit of Section 80IA, it will not be in consonance with the aims and objects for which this section has been introduced. There is a distinction between the widening of the existing road by constructing additional lanes as part of the highways project vis-a-vis, improving, maintaining, refurbishing the existing road. Circular No.4 of 2010 of the CBDT only provides the scope of section 80IA to include within its ambit the widening of the existing road, but the road which exists or the infrastructure which is existing cannot form part of the development of the infrastructure because the infrastructure which is already developed is incapable of being developed again. Hence the assessee is not entitled to any relief pertain to disallowance relating to existing four lanes 28 km to 67kms. CIT (A) has granted adhoc benefit of 25% to the assessee - We’re not able to comprehend the basis of arriving at the figure of 50% or 25% . There is no rational for the lower authorities to estimate the revenue in respect to the infrastructure already in place, specially under the circumstances when the records are available with the NHAI, which had granted the entity and contract of the assessee. In the result the working done by both the lower authorities were without any basis and was done on adhoc basis in our view both the authorities should have called the record from the NHAI and thereafter decided the matter. We deem it appropriate to remand the matter to the CIT (A) with the following direction. With the direction to call records from National Highways Authority of India pertaining to fixing of annuity and find out : a) What was the basis of fixing annuity with respect to strengthening of existing 4 lane and b) What was the basis for fixing the annuity for the second category namely laying down 4 lanes after widening the existing 2 lanes to 4 lanes as per the agreement. Based on the above exercise and reply if any received from the assessee , the Commissioner is to decide the deduction which the assessee is entitled in respect of widening of Road for the project 67 kms to 121 kms . However in respect of the annuity actually relatable to the first category namely maintenance and operation of existing four lane of 28 to 67 kms the assessee would not be entitled for any deduction Needless to say that the above said exercise shall be done by the CIT (A) after giving the notice and after examining the objection of the assessee. In the result ground no 3-4 of assessee are allowed for statistical purposes.
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