TMI Blog2013 (4) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... JM:- This appeal is filed by the assessee challenging the impugned order of the Ld.CIT(A)-II, Pune dated 27-07-2010 for the A.Y. 2006-07. 2. The assessee has taken the following ground: On the facts and circumstances prevailing in the case and as per provisions of the Act it be held that, the appellant project known as BOT project at Hanumangad is eligible in terms of provisions of sec. 80IA of the Act to the extent of claim of ₹ 2,07,51,140/-. It further be held that the claim is allowable to the appellant in full. It further be held that rejection of the claim by the AO and that confirm by the 1st appellate authority is contrary to provisions of law and facts prevailing in the case. The claim be allowed in full. The appellant be granted just and proper relief as per provisions of law and facts prevailing in the case. 3. The issue in controversy is eligibility of the deduction u/s.80IA (4) of the Act in respect of the project i.e. Hanumangarh Suratgarh Road, Rajasthan which has been completed by the assessee. As noted by the Assessing Officer, for A.Y. 2006-07 the assessee filed the return of income in which deduction u/s.80IA(4) to the extent of ₹ 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his latest submission has nowhere challenged the decision of the assessing officer to test the claim of deduction u/s.80IA(4) on the condition of development of New Infrastructure Facility . Instead the assessee has gone into dictionary meaning of 'development1, 'infrastructure facility' and 'improvement'. The evidences submitted by the assessee in fact prove that the work undertaken by the assessee was the work of mere improvement of existing infrastructure facility. Kind attention is invited to the document / report having the title B.O.T. project on page no.2 of this document / report under the heading 'Necessity' at para 8 the purpose for the project has been mentioned as follows: At present the road has got crust thickness of 25 cm only while the present day traffic is 15-26 nos. commercial vehicles per day which requires minimum crust thickness of 37 cms. Thus, the work was to increase the thickness of existing roads having length of 26 kms and width of 7 mtrs from 25 cms to 37 cms. At page no. 4 of the documents / report at para 10 under the heading Proposal the exact information of the work done is mentioned as follows: The propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of record that the agreement for Hanumangarh - Suratgarh Road of the Rajasthan Government was for strengthening and improving of the road and increasing its thickness. The Addl. CIT s report dtd.17.3.2010 has clearly brought this fact on record, citing from the relevant paras of these documents / agreement regarding BOT project under which the work was awarded to the appellant. For the sake of clarity, para 4 of the Addl.CVT s report is again being reproduced below : Kind attention is invited to the document I report having the title B.O.T. project on page no.2 of this document / report under the heading 'Necessity' at para 8 the purpose for the project has been mentioned as follows : At present the road has got crust thickness of 25 cm only while the present day traffic is 15-26 nos. commercial vehicles per day which requires minimum crust thickness of 37 cms. Thus, the work was to increase the thickness of existing roads having length of 26 kms and width of 7 mtrs from 25 cms to 37 cms. At page no.4 of the documents / report at para 10 under the heading Proposal the exact information of the work done is mentioned as follows : The proposal - 75 mm thick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it was for addition of extra lanes as a part of the highway project. To my mind, merely increasing the thickness of an existing road would not qualify as a new infrastructure project. Accordingly, and also considering the Circular No.4 of CBDT, the appellant's project does not fit within the parameters of a new infrastructure facility. 4.8. In view of the above discussion, and considering the remand report of the Assessing Officer and the Addl.CIT read with the CBDT circulars referred to above, the appellant's case does not qualify for deduction u/s.80IA(4). Therefore, the disallowance of the claim u/s.80IA(4) made by the Assessing Officer is upheld. Ground No. 2 is therefore, dismissed. Now the assessee is in appeal before us. 6. The learned counsel for the assessee at the outset submits that the road constructed by the assessee is close to India - Pakistan Border and there is heavy traffic due to Oil Depots Oil Tanker passing though said road and also Heavy Military Traffic being a border road. The existing road was not having the strength so as to coup up the traffic. He submits that it was not merely a repairing of road but re-doing of the entire road work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arying and hence needed widening of formation. He submits that hard bolders of 1m width on either side were newly introduced and that resulted into widening of the road. He submits that the road project undertaken by the assessee is 26 km which is State-highway and for the execution of the said work the assessee was given right to toll collection for 65 months. The learned counsel heavily relied on the CBDT Circular No. 4/2010 dated 18-05- 2010. He also placed reliance on the following precedents/decisions: 1. CIT Vs. Tata Hydro Electric Power Supply Co. 122 ITR 288 (Bom) 2. Shristi Infrasturcture Development Corporation Ltd. Vs. ITO 33 SOT 407 (Del) He finally pleaded for allowing the claim of the assessee. 7. Per contra the Ld. DR relied on the orders of the authorities below and pleads for confirming the order of the Ld.CIT(A). 8. We have heard the rival submissions of the parties and perused the record. The assessee company is in the business of Developing and Execution of infrastructure contracts. It is necessary to examine the terms of the contract with the Govt. of Rajasthan. The assessee has filed the Paper Book and a copy of agreement/contract with the Govt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee that it is not merely a repair and maintenance work but doing entire restructuring of existing road. The learned counsel has placed is reliance on the CBDT Circular No. 4/2010 dated 10-05-2010 which is as reproduced here as under:- F. No.l'78/14/2010-ITA.I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 18th May, 2010. Circular No. 4 /2010 Subject:- Widening of existing road ,- definition of a new infrastructure facility - clarification regarding. References have been received by the Board as to whether widening of existing roads constitutes creation of new infrastructure facility for the purpose of Section 80IA (4)(i) of the Income Tax Act, 1961. Section 80IA (4)(i) provides for a deduction to an undertaking engaged in developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility subject to satisfaction of the conditions laid down in the Section. The Explanation to subsection 80IA(4)(i) states that for the purpose of this clause, infrastructure facility, means inter alia:- (a) a road including toll road, a bridge o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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