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2015 (6) TMI 593 - ITAT KOLKATA

2015 (6) TMI 593 - ITAT KOLKATA - [2015] 39 ITR (Trib) 240 (ITAT [Kolk]) - Depreciation of hoardings - allowed @ 100% or 50% as it was used for less than 180 days - Held that:- Issue involved is duly covered by the decision of the Tribunal in assessee's case for A.yrs.2004-05 and 2005-06 wherein held that AO has not brought any evidence regarding the durability of the hoardings. The AO's observations appears to be a guess work in respect of quality of structure of the boards. The assessee has as .....

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y the ld. DR need not be adjudicated by us. Hence on the issue as to whether foot over bridges and bus shelters qualify for deduction of section 80IA of the Act we hold that the ld. CIT(A) is correct in holding the assessee's entitlement for deduction u/s 80IA of the Act. - Decided in favour of assessee. - ITA Nos. 1388 to 1392/Kol/2012 - Dated:- 10-3-2015 - Mahavir Singh, JM And Shamim Yahya, AM,JJ. For the Appellant : Shri P Mukherjee, JCIT For the Respondent : Shri J P Khaitan, Sr. Adv. ORDER .....

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nd carefully perused the records. The ld. Counsel of the assessee submitted that the issue involved is duly covered by the decision of the Tribunal in assessee's case for A.yrs.2004-05 and 2005-06 in ITA Nos.1054 & 1055/Kol/2008 vide order dated 30.06.2009. The ld. Counsel submitted that the ld. CIT(A) has granted relief to the assessee on the basis of the said Tribunal's order in assessee's own case. Hence the ld. Counsel of the assesee submitted that there is no need to interfe .....

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er life then claimed by the assessee and giving benefit of enduring nature. The assessee's claim is that these hoardings are having life of one to two months and less than a year. These hoardings are put in use for less than 180 days. The AO has not brought any evidence regarding the durability of the hoardings. The AO's observations appears to be a guess work in respect of quality of structure of the boards. The assessee has asked for 100% depreciation on the structure used for less tha .....

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assessee has given the complete data-wise details of purchase of cylinders which is detailed in the page 1 in the assessment order itself. The Assessing Officer has also not doubted the user of all the 'cylinders for the purpose of business during the year under consideration. On the other hand, he disallowed the depreciation with the observation "50 per cent of the total amount of depreciation for using the plant and machinery for less than 180 days". Thus, the Assessing Officer h .....

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discussed above, we hold that the assessee is entitled to 100 per cent depreciation on gas cylinders purchased and used during the year under consideration amounting to ₹ 15,32,092/- Ground Nos.1,2 & 3 of the assessee's appeal are allowed." The CIT(A) granted relief by allowing 100% not as treating the expenditure as revenue in nature as claimed by the revenue in its appeal ground. The ratio decided by Hon'ble ITAT, Jabalpur Bench appears to be applicable in the assessee& .....

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of the ld. CIT(A). The revenue's appeal on this account stands dismissed. 4. Another issue raised by the revenue in this appeal is that the ld. CIT(A) was not justified in allowing the assessee deduction u/s 80IA of the Act for construction of Foot Over Bridges as well as Bus Shelters. 5. In this case AO has disallowed assessee's claim of deduction u/s 80IA of the Act on Bus Shelters and Foot Over Bridges. AO has made disallowances by observing as under :- "The assessee has claimed .....

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quot;Bus Shelter" however, the vice versa is not true i.e. the "Bus Shelters" cannot run without the "road". Though "Bus Shelters" is an item of public utility but the same cannot form part of the "Road". In fact these days there are host of facilities which are provided on road sides such as toilet blocks, small eateries, drinking water facilities etc. which are items of public utility and are spin off from the road project but they cannot form part .....

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egral to it is also being developed then that activity will be included in the 'highway project'. Hence the assessee is not developing any highway project. In view of the above discussion the deduction claimed u/s 80IA for Bus Shelters is not allowable to the assessee." Upon assessee's appeal the ld. CIT(A) accepted the assessee's submissions that the issue is squarely by the decision of the Tribunal for A.Yr. 2005-06 in ITA No.1055/Kol/2008 dated 30.06.2009. Against the abo .....

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e that any toll/fee is being charged for the use of foot over bridges or bus shelter for which deduction u/s 80IA of the Act is being claimed. The ld. DR submitted that the assessee is earning income by way of advertising on the foot over bridges and bus shelters which is the subject matter of assessee's claim of deduction u/s 80IA of the Act. The ld. DR submitted that the income on account of advertisement cannot said to be an income derived by an undertaking from the business of infrastruc .....

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sing business would certainly be profits and gains of the business in terms of section 28 of the Act, the same would not amount to profits or gains derived from the industrial undertaking. The ld. DR further referred to the Hon'ble Calcutta High Court's decision in the case of Mukherjee Estates (Pvt) vs CIT 244 ITR 1 (cal) for the proposition that income mainly publicity charges by putting up hoarding/displaying advertisement from a building cannot be treated as income from property but .....

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o those assessees who have developed infrastructure facility as defined u/s 80IA(4) of the Act. Hon'ble High Court discussed the fact of the case that the assessee has not developed road or a toll road, bridge, highway or a rail system. However, it had developed the existing road median, erected bus shelters and light poles for its advertisement business, which, in any case cannot be treated as infrastructure development. Accordingly, Hon'ble High Court decided the question of law in fav .....

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me as integral part of highway and development infrastructure. For the purpose of high way system the building of the bus shelters are functional necessity and these are inextricably connected with the infrastructure required for highway. Without bus shelters the smooth movement of the vehicles and the operation of the vehicles through the high way shall not be of desired level. Thus the bus shelters are functionally necessary part and parcel of the highway infrastructure. By holding so we find .....

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er submitted that the issue involved is covered in favour of the assessee by the decision of the Tribunal in the case of DCIT vs Selvel Advertising Pvt. Ltd. for A.Yrs. 2006-07 to 2008-09 vide ITA Nos.657 to 659/Kol/2011 vide order dated 01.01.2015 wherein the identical issue has been decided in favour of the assessee. In that case it was also pointed out that the Hon'ble Calcutta High Court had passed an order confirming the order of the ITAT in quashing a revision order passed by ld. CIT u .....

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itlement Pass Book Scheme (DEPB) and the Duty Drawback Scheme could be said to be profit derived from the business of an industrial undertaking eligible for deduction u/s 80IB of the IT Act. Hence he submitted that this case law does not support the case of the department. He further submitted that the very agreements under which the assessee has developed, operated and maintained the infrastructure facility at its own cost provided for revenue generation by the assessee by the display of commer .....

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y connected with the development, operation and maintenance of the infrastructure facility provided for in the agreements. The ld. Counsel further submitted that the assessee did not merely develop the infrastructure facility but the assessee also operated and maintained the infrastructure facility which activity are also covered by section 80IA of the Act. In this regard the ld. Counsel further referred to the decision of the Hon'ble Calcutta High Court in the case of CIT vs Cement Manufact .....

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. We find that the issue on merits as to whether the assessee is entitled to deduction u/s 80IA of the Act for construction of foot over bridge as well as bus shelter is covered in favour of assessee by the decision of the Tribunal and the Hon'ble Calcutta High Court as referred in the submissions of the ld. Counsel of the assessee. The Tribunal in assessee's own case as well as in the case of DCIT vs Selvel Advertising Pvt. Ltd. (supra) has held that bus shelters and foot over bridges s .....

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IA of the Act. 8.1. As regards the issue raised by the ld. DR that the income which is the subject matter of claim of deduction u/s 80IA of the Act was not derived from the business of advertising of bus shelters and foot over bridges, we find that this is altogether a new issue which is not even the case of AO. The AO has made the disallowance only on the ground that construction of bus shelter and foot over bridge cannot be treated as development of infrastructure facility. Hence they do not q .....

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the assessee can be considered to be income derived from the industrial undertaking and the same was also not the subject matter of consideration before the ld. CIT(A) nor any such ground has been raised before the ITAT, in our considered opinion the ld. DR can not now enlarge the scope of the Revenue's appeal before us. 8.2. In this regard we also draw support from the Hon'ble Madhya Pradesh High Court exposition in the case of Kamal Kishore and Co. vs CIT 232 ITR 668 for the following .....

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