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2021 (1) TMI 1154 - AT - Income TaxClaim u/s 80IA in respect of parking lot developed on CIDCO land at truck terminal - assessee submitted before the AO that it has developed parking lot with access road at truck terminal, Kalamboli, Navi Mumbai on BOT basis and is responsible for repair, maintenance and operation of the said parking lot - HELD THAT:- In this case the assessee was awarded a project by CIDCO to construct a parking lot called truck terminal having facilities on BOT basis. Under the terms of award, the assessee was responsible for repair, maintenance and operation of the said terminal. The assessee used to collect fee from the truck owners from the trucks and also pay yearly fee to CIDCO. According to the AO the assessee is not eligible for deduction under section 80IA of the Act on the ground that the truck terminal is not an infrastructure facility which was affirmed by Ld. CIT(A) in the appellate order. According to the revenue authorities the truck parking terminal is an independent contract with CIDCO which has nothing to do highways. Whether the truck terminal is an integral part of highways or not? - We note that Finance Act, 2001 has modified the definition of infrastructure facility which means a highway project including housing or other activities being an integral part of the highway project. It is clear from the amended definition that any infrastructure which is part of the high way falls within the definition of infrastructure - examining the terms and conditions of award of contract to the assessee to construct, build or operate the said terminal on BOT basis, we find that this is an integral part of highway though the highway was existing already and it was only a stand alone project awarded to the assessee later on - As noticed that the said terminal was having various facilities as stated hereinabove. The case of the assessee finds support from the decision of Dy. Commissioner of Income Tax Vs. Vintage Advertising Pvt. Ltd.[2015 (6) TMI 593 - ITAT KOLKATA] wherein it has been held that assessee is entitled for deduction under section 80IA of the Act on bus shelter and foot over bridge - we direct the AO to allow the deduction under section 80IA. Disallowance on account of labour charges equal to 1% of the total purchases - disallowance on adhoc basis made by the AO on the ground that these expenses were incurred in cash - CIT(A) partly allowed the appeal of the assessee by directing the AO to add 1% of the purchases - HELD THAT:- There is an apparent mistake in the order of Ld. CIT(A) the labour charges debited to the profit & loss account - We observe that the AO as well as the Ld. CIT(A) has made the disallowance on adhoc basis. We are of the view that ends of justice would be met if a reasonable disallowance is made on this account. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to disallow a sum of ₹ 1,00,000/-. Addition u/s 14A read with rule 8D - HELD THAT:- We find merit in the contentions of the AR the disallowance under rule 8D2(iii) was wrongly made at 1.5% of the average investment instead of .5%. Therefore, the same is required to be rectified. Accordingly, we set aside the order of Ld. CIT(A) on this issue and direct the AO to make a disallowance at .5% of average investment. Needless to say that disallowance computed under rule 8D(ii) is correct. Accordingly, we direct the AO to delete the disallowance to the extent of ₹ 10,750/-. Ground is partly allowed.
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