TMI Blog2016 (11) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... unts admittedly is again for the very same sole purpose of infrastructural facility. In the circumstances, we find the income is necessarily, directly and inextricably linked with the eligible business of the assessee. Considering the character of the same, the facts and circumstances of the specific and peculiar nature of assessee’s business, the nexus is direct. The income can be said to be inseparably linked with the sole business purpose of the assessee which is the infrastructural facility. The acceptance of this fact by way of precedent is not only evident from the fact that the income was included in eligible business by two different Assessing Officers in two separate assessment orders but is also evident from the order of the Co-ordinate Bench in the base year itself. Interest income is not derived from eligible business - Held that:- interest income is to be treated as business income of the assessee. The miscellaneous income qua sale of scrap etc. again being directly and inextricably linked with the development of infrastructural facility it is to be treated as business income. Same is the position for money forfeited in the peculiar facts of the present case. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. Accordingly, we direct that subject to verification on facts that no amount is payable as per assessee’s books at the end of the year the relief in principle has to be allowed. We note that the arguments that per se section 194A and 194I itself are not applicable is left open as the issue becomes academic at this stage. Appeal partly in favour of assessee for statistical purposes. - I.T.A .No.-414/Del/2015 - - - Dated:- 6-9-2016 - SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Anil Chopra, CA and Sh. Vinod Garg, CA For The Revenue : Sulekha Verma, CIT DR ORDER PER DIVA SINGH, JM The present appeal has been filed by the assessee assailing the correctness of the order dated 12.01.2015 of CIT(A)-1, Noida pertaining to 2011 12 assessment year on the following grounds:- 1. That the Learned Assessing Officer [Ld. AO] has erred on facts and in law in assessing the appellant on a total income of ₹ 18,55,39,36.310/- against the total income of Rs. Nil as returned and the Learned CIT (Appeals) [Ld. CIT(A)] has erred in sustaining the same. 2. That the assessment order involved is unlawful a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re facility. The Ld. CIT(A) has erred in upholding the view of the Ld. AO. DISALLWOANCE OF DEDUCTION U/S 80IA 9. That the Ld. AO has erred on facts and in law in riot allowing deduction u/s 80IA on the entire business income earned by the appellant, which has been assessed at ₹ 17,92,96,91,790/- as the same has been derived from the eligible infrastructure facility entitled to 100% deduction of income u/s 80IA. The Ld. CIT(A) has erred in upholding the view of the Ld. AO. 10. That the Ld. AO has erred in not allowing deduction as claimed u/s 80IA. The appellant is eligible for deduction of its entire income u/s 80IA in context of its alternate claims u/s 80IA(4)(i) explanation (a) being road including toll road or alternately under explanation (b) as a highway project where housing or other activities are an integral part of a highway project as read with section 80IA(6). The appellant's claims in this matter are without prejudice to each other. The Ld. CIT(A) has erred in upholding the view of the Ld. AO. 11.That a provision should be interpreted in such a mariner so that it subserves the purpose for which it is enacted and does not frustrate such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GENERAL 16.That the Grounds of Appeal, as herein are without prejudice to each other. 17.That the assessment as made and the order of the Ld.CIT(A) are against law and facts of the case involved. 18.That the appellant craves leave to add, amend, modify and/or forgo any of the grounds of appeal. 2. Ld. AR inviting attention to the grounds raised submitted that primarily the assessee s main prayer is addressed vide Ground Nos. 9 to 12 i.e. namely that the assessee s claim of deduction is covered under clause (a) of Explanation to section 80IA(4)(i). Only in the eventuality if the said prayer is held to be not allowable, then without prejudice to the main argument the assessee would be seeking adjudication on the alternate prayer that the deduction is allowable under Explanation (b) to section 80IA(4) and thus be governed by the provisions of section 80IA(6). In the eventuality it was submitted that the assessee fails in its main prayer and the allowability of the assessee s claim is being considered in the alternate ground then the assessee s petition for seeking admission of additional evidence would also need to be addressed. The said prayer it was subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the same it was submitted that the order of the ITAT dated 13.04.2015 in assessee s own case in ITA No. 3339/Del/2014 pertaining to 2009 10 assessment year fully addressed the issues in the present appeal. The issue it was submitted was fully covered in assessee s favour as considering the very same provisions for the very same activity in the initial year itself the ITAT has allowed assessee s claim thus following the precedent deduction is allowable to the assessee in terms of clause (a) of Explanation to section 80IA(4). Copy of the said order it was submitted is already available on record. 3.1. The above grounds it was submitted have been raised in the case of an assessee where the material facts continue to remain the same. Reading from the synopsis/written submissions it was argued that the assessee company which is incorporated under the Companies Act, 1956 was formed as a Special Purpose Vehicle (SPV) on 05/04/2007 for developing, operating and maintaining the toll road between Noida and Agra along with Service Road and associated structures with rights allotted to it to collect toll during the Concession period (which was fixed as 36 years) alongwith rights for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of the legislative promise which has been held out to the assessee in terms of clause (a) of Explanation to section 80IA(4) and even after facing the brunt of the order of the tax authorities u/s 263 the assessee finds its confidence shaken when despite the fact that this is not the initial year the tax authorities still want to depart from the accepted position. 3.1.3. Reverting to the facts of the case it was submitted that the State Government, in exercise of the power as vested under section 3 of the said Act, constituted, just prior to launching of the Project, an Implementing Authority, namely, Taj Expressway Industrial Development Authority (in Short TEA). The length of the expressway connecting Noida with Agra was about 160 Kms and it was to pass through a virgin area along the Yamuna River. The integrated land and toll road developmental activity it was submitted was visualized and contemplated would bring the benefits of growth and development by this infrastructural facility to this area along the Yamuna River. For the said purposes it was granted rights for land development of 25 million sq. mtrs of land on 90 years lease along the proposed 100 meters wide Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Elaborating the point made earlier that the issue has already been subjected to intense judicial scrutiny by way of litigation in a PIL thrust upon the assessee where again referring to admitted facts on record it was submitted a Public Interest Litigation was filed alleging that land has been transferred for inadequate consideration etc. of acquisition of land and despite the various kinds of allegations made against the assessee and the state etc. amongst others the Project was cleared by the Inquiry Commission Report and in the PIL also the issue was decided in assessee s favour and in favour of the State Government of U. P. The Apex Court it was submitted in the said case of Nand Kishore Gupta Ors V. State of UP Others held that the Expressway is a work of immense public importance and the creation of land parcels would give impetus to the industrial development of the State creating more jobs and helping the economy and thereby helping the general public. 3.1.8. The Inquiry commission it was submitted was appointed by the Governor of UP by a Notification No. 1889/77-4-2004-10N/2004, Lucknow dated June 22, 2004 to ascertain the facts and address the position of transpa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed by the ITAT. Relying upon the order dated 13.04.2015 in ITA No. 3339/Del/2014 it was submitted that the ITAT examined these issues in detail and by a detailed order came to the conclusion that the benefit granted by the legislature vide clause (a) of Explanation to section 801A(4) of the act cannot be denied to the assessee. Relying on the said order it was submitted that various decisions of the different Courts had been taken into consideration by the ITAT and the arguments on the principles of Statutory Interpretation which would apply have all been considered and discussed at length in the said order in order to arrive at a conclusion to quash the order u/s 263. 3.3. Accordingly on the basis of these facts available on record it was his submission that the issue is a fully covered issue as far as the assessee is concerned which is why attention right at the outset has been invited to Ground Nos. 9 to 12 as the assessee is confident that the assessee need not argue the grounds relatable to the alternate prayer addressing section 80IA(6) and consequently to seek admission of additional evidence which has been denied by the CIT(A). 3.4. It was his submission that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion to the proviso to subsection (2) of section 80IA it was submitted that 80IA(2) is subservient to 80IA(4) and is to be seen in the context of section 80IA(4). Referring to the said sub-section it was submitted that the Statute contemplated the situations realistically and made the deduction available to any enterprise carrying on the business of developing; or operating and maintaining; or developing, operating and maintaining any infrastructure facility. Relying on Iswar Singh Bindra 1968 AIR 1450 (SC) it was submitted that the word and had to be read as or . Referring to the written submissions placed on record it was submitted that the Hon ble Court held in the context of interpretation of statute that in certain cases the word and had to be read as or . The Hon ble Apex Court quoted from Stroud s Judicial Dictionary, 3rd ED to state that sometime and by force of contents, reads as or . They also quoted Maxwell on Interpretation of statue, 11th ED to hold that to carry out the intention of the legislature, it is occasionally found necessary to read or or and one for the other. This view of the Apex Court it was submitted has been once again reiterated by the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties an integral part of the highway project. In the facts of the present case it was his submission that right from the judgement of the Apex Court in the PIL launched against the assessee up to the ITAT it has been held at all forums that the assessee is engaged in an integrated toll project. Referring to the facts it was submitted that the overall development in the area is directly responsible due to the direct activities of the assessee and assessee alone and this is an admitted fact on record. Accordingly the Revenue cannot be allowed to defeat the provisions by misreading and misapplying the provisions to the facts of the assessee who acting on the promise held out by the Legislature to the assessee undertook this herculean activity to develop in the barren undeveloped land an Expressway competing with the highest standards in the world. The tax authorities it was submitted in these circumstances are not justified in attempting to withdraw the legislative benefit available to the assessee on its whims and misreading the provisions and discarding precedent available. It was his submission that without any exaggeration and with no desire to seek sympathy he would only like to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d show that the order of the ITAT came subsequently. 3.7.1. Referring to the impugned order it was his submission that after reproducing the facts as found by the Assessing Officer, the submissions of the assessee have been reproduced verbatim by the CIT(A) and thereafter from pages 60 onwards, the CIT(A) has come to the conclusion wherein after reproducing the specific section, he has referred to the fact that the assessee has admitted that toll road was inaugurated on 09.08.2012 an event occurring in 2013-14 AY. Accordingly without addressing the decisions relied upon and the arguments on the provisions of the Act advanced by the assessee it was submitted the CIT(A) he has proceeded to deny the relief claimed solely relying on this fact and misreading the words used by the Statute, it was submitted that the CIT(A) has concurred with the Assessing Officer to hold that the exemption claimed can be allowed only by invoking the provisions of section 80IA(6) without addressing the arguments advanced. 3.7.2. It was submitted that thereafter referring to the said fact, a discussion on how the AO has proceeded and without caring to address the facts, arguments and decisions relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is carrying on infrastructure development. In the facts of the case, Interest income on facts it was submitted has both been paid and received and is related only to the infrastructure development business and has a nexus with the business. The source of FDR it was submitted is the real estate development as part of the assessee's infrastructure facility and the same are part of overall financial assets used for financial facilities for the infrastructure facility. Hence, Interest income earned on the said FDR it was submitted is income derived from infrastructure facility business. Accordingly as there is clear nexus the interest paid has to be netted off from the interest earned as both have been used for the common business and common objective. For netting the assessee relies on CIT v. Eastern Tar P. Ltd.301 ITR 427 (JHAR); CIT v. Pawan Kumar Jain 298 ITR 443 (DEL); CIT v Nectar Life Sciences Ltd, 203 Taxmann 318 (DEL); CIT v. Shahi Export House 195 Taxman 163 (DEL); CIT Vs Lok Holdings 308 ITR 356 (BOM); and ACG Associated Capsules (P) Ltd. v. CIT 343 ITR 89 (SC). 3.8.2. The FDRs it was submitted were part of total current assets which were sourced from real estate b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n bank temporarily and interest is earned thereon. Similarly, the proceeds from Initial Public Offer (IPO) were kept in bank temporarily and interest is earned thereon. The same source of funds (FDRs) it was submitted is used for development of infrastructure facility. The assessee has also charged the FDRs to banks for obtaining finance for the infrastructure facilities. Making of FDRs for working capital management was in the course of the business. It was submitted that the capitalization in the two respective parts of Expressway and project under development is based on the related funds as per CA certificate at PB page 68. The assessee it was submitted has adjusted the said interest income against the interest expenses paid on Term loans/NCDs and others. The expressway infrastructure facility it was submitted was being developed in the year was capital work-in-progress and a qualifying asset prior to completion under AS-16. The said interest earned it was submitted was to be netted against interest paid and the balance interest paid on funds for such capital work-in-progress is capitalized as per AS-16. Thus, both as per AS-16 and correct treatment in tax, the said interest wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 million square meters of land along the expressway. This part of the Concession Agreement it was submitted was implemented by Yamuna Expressway Industrial Development Authority i.e. YEIDA by transferring to the assessee company specific parcels of land, within the agreed 25 million square meters limit, under a set of long-term lease deeds. The said lease deeds or transfer deeds transfer substantially all risk and reward incidental to ownership to the assessee who became in substance the owner. Such lease as per AS 19 and AS 17 it was submitted was a finance lease or capital lease and not operating lease. Reliance was placed on the judgement of the Apex Court in Sri Shanti Sharma Others v. Smt Ved Prabha Others (1987) 4 SCC 193 and 1987 AIR 2028 wherein it has been held that the ownership of land is recognized on leasehold basis. It was argued the alleged non-deduction of TDS on what is stated to be rent and interest is erroneous. The so-called rent is lease expense which is part of the capital cost of acquisition of leasehold land and capitalized as such. The so-called interest is only EDC enhancement over time to cover for inflation. 3.9.1. Addressing the facts it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Reliance was placed on the decision of the Apex Court in the case of Podar Cement Pvt Ltd 226 ITR 625 (SC) for the proposition that income tax provisions do not operate by de jure ownership but de facto ownership. 3.9.4. Addressing the interest component it was submitted that under the terms of the Concession Agreement as well the Lease Agreement, the lessor (YEIDA) has undertaken to carry out some external developments. For the said development it was submitted YEIDA was entitled to charge the external development charges (EDC) from the lessee (i.e. the company). The external development was carried out by YEIDA in planned phases over a period of time. The charges for the same were also collected by them accordingly over a period of time in a phased manner. The per square meter rate at which EDC was payable by the lessee company was determined in the first instance with reference to a base year or zero year, which in this case was the year 2010. Since the actual external development as well as the payments in respect of the same become due in phases and were to be spread over a number of years, YEIDA provided for an additional payment, over and above the rate fixed with refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that it is an absolute premise of income-tax jurisprudence that tax cannot be recovered on the same income twice. It is on this premise that the Hon'ble Supreme Court in Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income-tax (2007) 293 ITR 226 (S.C.) and several High Courts in various other cases have uniformly ruled that once tax on any income has been paid by the payee the Department cannot collect tax on the same income from the payer u/s 201 of the Act. Reliance was placed CIT v. Ansal Landmark Township (P) Ltd. (2015) 61 Taxmann.com 45 (Del.) to rely on the law declared wherein the Hon ble Apex Court has held that Second proviso to sec. 40(a)(ia) was declaratory and curative in nature and it was to be given retrospective effect from 1.4.2005. It was submitted that the Ld. CIT (Appeals) has decided the Appeal in favour of Appellant in TDS matter regarding nondeduction of TDS on interest on account of deferment of payment of EDC in TDS Appeal for this year. It was submitted that except for minor amount of ₹ 10149/- the remaining has been capitalized thus no 40(a)(ia) disallowance is called for. 3.9.7. It was submitted that it has been consistently a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or 80IA(6). Addressing the relevant provision it was her submission that the arguments of the assessee are based on incorrect facts and incorrect appreciation of the decision of the ITAT. The tax authorities it was submitted have consistently examined the facts and rejected the primary claim holding that it is against the provisions. The assessee thereafter it was submitted before the CIT(A) put forth the alternative prayer and a speaking order has been passed by the CIT(A) after due consideration of all facts and law applicable thereon. Accordingly, the arguments made by the assessee on facts and law, it was submitted are entirely misconceived. It was submitted that when the provision of the Act are considered it would transpire that the claim has correctly been rejected. It was submitted that it is an admitted fact and not under dispute that the assessee was given parcels of land for development. The specific parcels of land it was emphasized were not small measly parcels but were huge parcels of land for the purposes of developing housing and road of specific requirements. Accordingly in the circumstances it was her submission it is sub-section (6) of section 80IA which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the toll road was inaugurated on 09.08.2012 that is in the assessment year 2013-14. Thus in view of the fact that in the year under consideration, the income declared from business did not contain any income from the infrastructure facility being the toll road and after considering the reply of the assessee read alongwith the relevant provisions of the Act, the claim made under subsection has been rejected. 4.2. Attention was invited to page 8 of the assessment order so as to bring out the fact that the assessee in the year under consideration has earned income from sale of plots, sale of built-up properties, lease rentals, transfer fees, FDR bank interest, profit on account, currency fluctuations and miscellaneous income. In the context of these facts it was her submission that where the assessee s income admittedly is from development of plots etc. it cannot be said to be earned from the infrastructure facility namely road including a toll road as is the requirement of the specific provision under which the assessee claims its case falls. 4.3. Referring to the without prejudice claim put forth by the assessee that it may be allowed to claim deduction under section 80IA(6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a copy of the assessment order for 2009-10 and 2010-11 assessment years. 5.3. Accordingly, it was his submission that the Certification is in order however if the Ld.CIT DR insists he was willing to Re-certify the same. Considering the submission, the Ld.CIT DR gave up the objection. 5.4. Considering the Paper Book and the Certification appended which issue was given up by the Ld.CIT DR herself, we find that the objection of the Ld. CIT DR that certificate in assesseee s Paper Book is not in order and is unwarranted and unjustified and on facts and the objection is without any basis. 6. Reverting back to her arguments, the Ld.CIT DR invited attention to the paper book page No. 20 and 21 which is the copy of the form 10CCB certified by an Chartered Accountant. Referring to column No. 14 of the same it was submitted that where the assessee is required to indicate the nature of the infrastructure facility the assessee has indicated it as Road including toll road and thus it was her argument that the AO in the present proceedings has been guided by assessee s own disclosure. This fact it was submitted has been taken note of by the CIT(A) also. Thus by its own conduct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee only after the claim before the CIT(A) u/s 80IA(4) was dismissed by the Assessing Officer and it was then that the assessee came up with a claim that the exemption should be considered under section 80IA(6). The arguments of the assessee that the compliances prescribed under section 80IA(6) being procedural in nature should be interpreted leniently and the claim for exemption should be considered under section 80IA(6) it was submitted have all been considered and found to be devoid of merit. Accordingly it was her submission that in the circumstances of the case since the assessee is still aggrieved then it could have applied to the board under section 119 (2)(c) of the Income Tax Act for relaxation of the provisions and sought for relief from the said forum as only the Board by an order can give such a relaxation subject to compliance of conditions mentioned therein and placing the same before the Parliament. Accordingly it was her submission that it is only the Parliament which could have relaxed the conditions as the requirements for waiving even for the Board are very stringent as has been noticed by the CIT(A). 6.3. Addressing the arguments advanced in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l facility and thereafter, 30% of profits and gains for the further period of five years. 4. The clause (a) of the Explanation to sub-section (4) covers infrastructural facility being a road including a toll road, a bridge or a rail system whereas clause (b) thereof refers to a highway project including housing or other activities being an integral part of the highway project . 5. Sub-section (6) states that notwithstanding anything contained in subsection (4), where housing and other activities are an integral part of the highway project and the profits of which are computed on such basis and manner as may be prescribed, such profit shall not be liable to tax where the profit has been transferred to a special reserve account and the same is actually utilized for the highway project...before the expiry of three years... . 6. The basis and manner in which the profits of housing and other activities are to be computed for the purposes of sub-section (6) are specified in Rule 18BBE which mandates maintenance of separate accounts for the activities of housing and other activities and submission of a certificate specifying the amount credited to the reserve acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enial of claim for deduction by the Assessing Officer in the proceedings under Section 143(3) for A.Y.2011-12 was based on valid grounds and has been upheld as such by the CIT (Appeals) in the appellate order for A.Y.2011-12 dated 12.01.2015. 13. The plea of the assessee that it has complied with the provisions of Section 80-IA(6) in spirit is fallacious in as much as firstly, the substantive provisions of the statute, which grants a vested right either to the revenue or to the assessee, cannot be ignored and secondly that the circumstances under which the provisions of Chapter VI-A can be relaxed has been provided for in the statute itself in Section 119(2)(c) of the Act. The assessee's action of creating special reserve post facto after the conclusion of assessment proceedings and furnishing a certificate of Form 10CCC dated 15.11.2014 is irrelevant for determining the eligibility of the deduction. 7.2. The written submission of the Revenue filed by the Ld.CIT DR also contains the following written submissions under the name and signature of Pr. CIT, Noida addressing the issues raised by the assessee in the grounds moved. These are extracted hereunder for ready-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essway Project, which, interalia, includes construction of six lane, 160km long Super Expressway with service roads and associated facilities connecting Noida and Agra, passing through a virgin area along the Yamuna river . 1(d)It is seen from the objects of the agreement that the facility is an Expressway rather than at toll road. Highway as per definition, is a public road specially an important road that joins cities or towns together. Intertwining the objects of agreement and the definition of Highway the facility refers to highway and not just toll road as contended by the assessee. Hence it does not fall in clause (a) of explanation to Section 80IA(4)(i). Correlating it with case law cited, (MCD Vs. Mohd.Yasin (142 ITR 737).), Highway and Expressway are members of the same genus. 1(e) as per agreement between TEA (Taj Expressway Authority) and the assessee group, an expressway was to be constructed between two prominent cities and toll would be charged on that expressway. At that very time and even now, this expressway is a prominent landmark in infrastructure. Merely having mention of toll plazas in agreement can't change the genus of highway/expressway as di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructural facility..... . 3(a) The language is clear from sub-section (2) of Section 80IA of the Act. The conjoint letter 'develops and begins' signifies actual commencement of the infrastructural facility. The date of incorporation of the assessee concern cannot by any stretch of logic mean that commencement of infrastructural facility has taken place. Though the Act says it is at option of the assessee but the same has to be in right nomenclature i.e the facility should have begun to run and in this extant case, thrown open to the public. The assessee has begun to operate the infrastructure facility w.e.f. 09.08.2012 when the Expressway was inaugurated by the Hon'ble Chief Minister of UP and hence prior to this date, it had only earned profits from sale or sub lease of land and therefore, the assessee would be ineligible for deduction/exemption u/s 80IA of the Act for AY 2011-12 . 3(b) As per sub-clause (c) of clause (i) of sub-section (4) of section 80IA of the Act, the deduction would be admissible to the enterprise which has start ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the story is that during this assessment year and also to few successive assessment years till AY 2012-13, there was huge boom in real estate in National Capital Region of Delhi, including Noida and Greater Noida where the assessee concern has been given vast land parcel as part of incentives for building Expressway. If one analyzes the trend of profits from sale of the land from AY 2008-09 to the present day, the figures show that the huge profits were achieved from AY 2009-10 to AY 2012-13 as there was spurt in real estate. The assessee concern was the biggest real estate player in this area and thus, was the biggest benefactor. In an attempt to conceal this windfall profit, the designing of the tax planning was such that by giving it colour of deduction u/s 80IA large chunk of profits meant for taxation be concealed and deliberately avoided. 4. The claim of deduction by the assessee is irrelevant and inconsistent with its professed principal of interpretation ignoring the merits and facts of the case .If the allied activities eligible for deduction is included in clause (a) of Explanation to Section 80IA(4), then what is the intent of clause (b) in the Income tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -iterated that the parties concerned were aware that a toll road was being contemplated and the fact that the toll fees collected will be very low and thus to make up for this deficit and to ensure that a constant flow of funds remains available to the assessee to carry out this mammoth infrastructural integrated project for the benefit of the state the assessee was allowed to develop these parcels of land so as to ensure that there is a constant flow of funds to meet the heavy financial requirements for the infrastructural facility. It was submitted that the fact that the assessee has constructed the Agra Expressway which is probably one of the best in the world, it was submitted is a fact on record and it was his argument the assessee is confident that considering the relevant provisions, facts and circumstances, the past history of the issue evident from the orders of the Assessing Officers in 2009- 10 2010-11 AYs and the order of the ITAT quashing the Revisionary order passed by CIT, Noida u/s 263 the issue is fully covered in his favour by Explanation (a) of Section 80IA(4) and thus unless he is directed to specifically address the without prejudice ground raised addressing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order would show that the Assessing Officer has discussed, considered and dismissed the said issue. Thus, the submissions of the Ld.CIT DR that the assessee is not sure under which section the deduction is to be claimed it was submitted is without merit. It was his submission that the record would show that all along the assessee has been sure that the deduction was to be claimed under sub-section (4) of section 80IA however when the AO objects to allowability of the same, he creates a situation where the assessee has been forced to examine the options from all angles. It was his argument that it is very easy to sit on the chair and find faults with the person actually working on the ground. In the facts of the present case it was his submission that the assessee acting upon the legislative intent evident from the Statute has constructed a toll road and there is no dispute on the date when it was inaugurated and the date from which the toll collection started. However on a reading of the specific section which specifically uses the word develops the Legislature was well aware that it is an ongoing activity as the Statute has not used the word developed . The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e argument that sufficient opportunity was available to the assessee it was submitted is of no relevance as the filing of fresh evidence has been necessitated as the main prayer was dismissed by the AO holding that in the earlier years the assessee has relied on sub-section (4) of section 80IA thus the claim now u/s 80IA(6) cannot be accepted. The AO also rejecting the prayer relied on the fact that in terms of sub-section (6) the assessee was required to maintain a Reserve in a specific manner and to utilize it in a specific manner which also formed the basis of dismissing the alternate prayer. In the circumstances, it was submitted the assessee was required to file additional evidence before the CIT(A) who failed to exercise his authority fairly and appropriately. The fact that the evidences sought to be filed were not available at the time the assessment proceedings is self-evident as the need for making the prayer admittedly arose only during the assessment proceedings for the first time when the assessee was faced with the scenario that the deduction under section 80IA(4) was not being allowed. It was submitted it is then, that, the necessity to file the fresh evidence arose. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ITAT. We note that the Ld. AR was at pains to canvass that the issues on facts including the specific provision invoked; the statutory principles invoked to interpret the same have all been taken into consideration by the ITAT and we note that after addressing the main issue the Ld. AR expressed his reluctance to address the alternate claim u/s 80IA(6) advanced by way of without prejudice arguments. The reluctance to argue the without prejudice claim despite the raising of the ground which then appeared surprising can be better appreciated now after going through the gamut of arguments advanced by the parties which we find is a virtual repetition of the arguments advanced before the Co-ordinate Bench. We find on a detailed consideration of the issues addressed by the Co-ordinate Bench in the aforesaid order that the reluctance to address the alternate claim on facts was thus not misplaced as the Coordinate Bench, it is seen has fully considered the issues considering more or less similar arguments of the parties before the Bench. Thus on facts the preliminary belief expressed by the Ld.AR that the assessee deserves to succeed on its main plea we find was not misplaced. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar form the aforesaid order as the issues addressed in the present proceedings refer to the very same provisions. 10.1. The relevant provision reads as under:- Deduction in respect of profits and gains from' industrial undertakings or enterprises engaged in infrastructure development, etc. 80IA [(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of profits and gains derived from such business for ten consecutive assessment years.] (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fiteeen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 5. That, inter alia, the appellant is entitled to deduction u/s 80IA(4) on the facts and law involved as a developer of the infrastructure facility, even if it has not commenced operating and maintaining but is developing the same, in view of direct decisions in its favour including inter alia reported in ACIT v. Bharat Udyog Ltd. 118 ITO 336 which follows the decision of the Hon'ble Apex Court in K. P. Verghese v. ITO 131 ITR 597 (SC) and as held in TRG Industries (P) Ltd. v. OCIT (2013) 35 Taxmann.com 253 (Amritsar - Tribunal). 7. That the Ld. CIT has erred in stating that the Ld. AO has not applied his mind to other claims for example deduction in respect of interest on FDs and whether depreciation was admissible even while the project was not complete. These claims have been processed and correctly allowed after due consideration. There is no final finding by the Ld. CIT that these claims are incorrect. The assessee was duly entitled to these claims which are correctly allowed and as such too setting aside the assessment to be made de novo is unlawful and the order of the Ld. CIT deserves to be quashed. 8. That the order of the Ld. CIT is based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns advanced by the Ld. CIT DR in the present proceedings under the name and signature of Principal Chief Commissioner of Income Tax, Noida which has been extracted in the earlier part of this order, it is seen are verbatim to what has been argued before the Co-ordinate Bench and has been reproduced by the Co-ordinate Bench at pages 40 to 43 of the said order. We further find that the Co-ordinate Bench in order to decide whether the Revisionary power exercised by the Ld. Commissioner qua the assessment order under challenge dated 30.12.2011 in 2009-10 AY was erroneous and prejudicial to the interests of the Revenue necessarily had an occasion to consider the very same provision; the very same facts and events; the facts borne out from the very same Agreements and the very same arguments by the parties. It is seen that considering these facts, arguments and provisions of law the Co-ordinate Bench noted in para 18 at pages 53 and 54 of their orders that the following prime issues emerged for their consideration for adjudication: Para 18 .. .. (i) Whether in view of concession agreement and allied documents, the assessee claim falls u/s 80IA(4)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 07.02.2003 between TEA and the assessee and proceeded to analyse the same in para 21. We further note that the arguments advanced in the present proceedings by the parties are identical to what has been advanced before the Co-ordinate Bench. The arguments on behalf of the assessee recorded in paras 22 to 23 read alongwith the departmental stand as addressed in para 24 by the Co-ordinate Bench shows that the very same arguments have been repeated before us. It is seen from the aforesaid order of the Co-ordinate Bench that the arguments advanced on behalf of the assessee are a virtual repetition of what has been argued before us. It is seen that the Co-ordinate Bench has considered these arguments and on a reading of para 25 to 29 addressing the legal position on the specific provisions as settled by the various Courts in Para Nos. 30 and 31 of their order and taking note of the objections of the Ld. CIT DR addressed in para 32 have proceeded to consider the ratio of the various decisions cited and record their agreement with the view canvassed by the assessee to hold in para 34 that a provision in a taxing statute granting incentives for promoting growth and developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the other issues canvassed in the present proceedings. A further reading of Paras 64 to 69 would bring out that the submissions before the Co-ordinate Bench have been repeated by the Revenue in the present proceedings also. Similarly the reply of the assessee thereon addressed in para 70 by the Co-ordinate Bench it is seen is re-iterated in the present proceedings before us. We note that before the Co-ordinate Bench the representation for the assessee and the Revenue was made by the very same Ld.AR and the CIT DR hence the candid belief of the Ld.AR that the issues are considered and decided. To revert back to the order of the Coordinate Bench, we find that in Paras 71 to 85 considering the position of law on the facts as marshalled it was concluded by the Co-ordinate Bench that the issues as formulated as Issue No.(i),(ii) and(iii) were to be decided in favour of the assessee. 10.6. In the face of this clear cut finding of the Co-ordinate Bench available on record as far as the present proceedings are concerned we find that no case has been made out by the Ld. CIT DR on the basis of repeating the arguments already considered by the Co-ordinate Bench wherein no distinguishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in which the undertaking or enterprise develops or begins to operate any infrastructure facility. It has been further submitted that Sec. 80 IA applies as provided in. Clause (i) of sub - sec, 4 of Sec. 80 IA to any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the conditions. A reading of the following reasoning of the AO shows that the factum of income from sale of plots etc. as before the CIT, Noida was a fact taken note of. The AO notes that the issue of deduction u/s. 80 IA has been carefully examined w.r.t. material on record and various explanations and documents filed by the assessee. In this case, during the year, the assessee has earned income from sale of plots, sale of built up properties, lease rentals, transfer fees, FDR bank interest, profit on account currency fluctuations and misc. Income. The assessee has claimed the complete income from all these sources as exempted u/s. 80 IA (4) (i) r/w. Expln. (a). The said claim was rejected by the AO holding that the claim of assessee that his income is exempted u/s. 80 IA (4) (i) r/w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L and Taj Expressway Industrial Development Authority at pages 12 to 90 of the Paper Book however, no argument was advanced on behalf of the Revenue referring to the said Agreement so as to canvass that the facts as appreciated by the ITAT in 2009-10 AY in its order dated 13.04.2015 are incorrect. Infact the said Agreement was not referred to at all in the course of the arguments. Reference to this specific fact is made so as to address the factual position that it is not the case of the Revenue that appreciation of facts in the order by the Co-ordinate Bench is disputed by the Revenue and infact facts as appreciated by the ITAT are not disputed by the Revenue at all. The observation is significant as the claim of the assessee has been that the aforesaid order of the ITAT in the initial year has considered the facts which continue to remain identical and concluded the issue in favour of the assessee thus judicial precedent available deserves to be followed. Thus in this background, we note that no change in fact or circumstances despite filing a copy of the Assignment Agreement has been pleaded by the Revenue. Reverting to the facts as considered qua Ground Nos. 5, 7, 8 and 9 raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Co-ordinate Bench it is seen in para 22 (also relied upon by the Ld.CIT DR) took cognizance of this specific act of State which was questioned by a litigant before the Apex Court in PIL in Civil Appeal No.7468 of 2010 in the case of Nandkishore Gupta vs State of UP and concluded that on a reading of paras 30 and 34 of the said judgement the work of development of the Expressway and development of the land are integral and inseparable part of the project/scheme. The aforesaid paras extracted in para 22 by the Coordinate Bench from the decision of the Apex Court are extracted hereunder for ready-reference:- 22. The Expressway is a work of immense public importance. The State gains advantages from the construction of an Expressway and so does the general public. Creation of a corridor for fast moving traffic resulting into curtailing the traveling time, as also the transport of the goods, would be some factors which speak in favour of the Project being for the public purpose. Much was stated about the 25 million square meters of land being acquired for the five parcels of land. In fact, in our opinion, as has rightly been commented upon by the High Court, the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is seen that thereafter in paras 28 onwards considering the arguments of the parties before the Bench on the principles applicable for interpretation of the specific provisions vis- -vis the facts of the case the Coordinate Bench finally concluded in para 34 that the Incentive provisions in a taxing statute have to be interpreted liberally. For ready-reference, the relevant extracts addressing the reasoning for the aforesaid conclusion is reproduced hereunder:- 28. On careful consideration of above rival submissions of both the sides, firstly we are in agreement with the contentions of the ld. AR that the allegation of non-compliance of the CBDT Circular No. 1/2006 (supra) has not been mentioned by the ld. CIT Noida in the notice issued to the assessee u/s 263 of the Act (supra). Secondly, the construction of language and words used by the legislature in subsection (2) of section 80IA of the Act and used by the CBDT in Circular No. 1/2006 (supra) are similar viz. develops and begins to operate . The heading given by the legislation to section 80IA of the Act reads as Deductions in respect of profits and gains from industrial undertaking or enterprise engaged in infrastr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and produce a rational construction. Speeches made by the members of the legislature on the floor of the House when the bill is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the mover of the Bill explaining the reason for its introduction can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is in accord with the recent trend in juristic thought not only in western countries but also in India, that the interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. 31. Ld. AR placing reliance on the decision of Hon ble Supreme Court in the case of Bajaj Tempo Ltd. vs CIT (1992) 196 ITR 188 (SC), the ld. AR submitted that if provision for checking abuse is found to have resulted into nullifying the very purpose of its enactment then the provisions of taxing statutes should be interpreted liberally so as to advance the objective of the provisions and not frustrate it. Ld. AR has further drawn our atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure facility. Section 80-IA of the Act essentially contemplated deduction in a situation where an enterprise carried on the business developing, maintaining and operating an infrastructure facility. A port was defined to be included within the purview of the expression infrastructure facility . The obligations which the assessee assumed under the terms of the contract were not merely for supply and installation of the cranes, but involved a continuous obligation right from the supply of the cranes to the installation, testing, commissioning, operation and maintenance of the cranes for a term of ten years after which the cranes were to vest in JNPT free of cost. An assessee did not have to develop the entire port in order to qualify for a deduction under section 80-IA. Parliament did not legislate a condition impossible of compliance. A port is defined to be an infrastructure facility and the circular of the Board clarified that a structure for loading, unloading, storage, etc., at a port would qualify for deduction under section 80-IA. The condition of a certificate from the Port Authority was fulfilled and JNPT certified that the facility provided by the assessee was an integ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is seen that the arguments as advanced before the CO-ordinate Bench have been re-iterated in the present proceedings also as these form the basis of the denial of assessee s claim before the AO:- 50. The ld. CIT DR further contended that since the assessee company has not commenced business operations during the year under consideration and the assessee has begun to operate infrastructure facility w.e.f. 9.8.2012, when the expressway was inaugurated, hence, prior to this date, the assessee had earned only profits which are attributable to sale of land which was transferred to it in the terms of concession agreement, therefore, the assessee would be eligible for deduction u/s 80IA only w.e.f. AY 2013- 14. .The following reply of the assessee as extracted in para 51 has been considered. 51. Ld. AR also placed a rejoinder to the above submissions of the ld. CIT DR that the concession agreement was executed for development of expressway and development of road. Ld. AR has further drawn our attention towards assessee s paper book page 180 to 184 and submitted that it was clarified before the AO that in consideration of the assessee, in agreeing to develop, design, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlain dictionary, First Indian Edition 2001 at page 635) - A public road especially an important road that joins cities or towns together (Ref. Cambridge Dictionary, low price edition 1996 at page 669) (B) Expressway - a major road for fast moving traffic, especially with three lane per carriageway and limited access and exit points (Ref. Chamberlain dictionary, first Indian edition 2001 at page 462 892.) - A wide road built for fast moving traffic travelling long distances with a limited number of points at which drivers can enter and leave it. (Ref. Cambridge dictionary, low price edition 1996 at page 485) (C) Toll - a charge payable to use of a bridge or road (Ref. Concise Oxford Dictionary, at page 1507) (D) Toll gate - a barrier across a road where a charge must be paid to proceed further (Ref. Concise Oxford Dictionary, Edition at page 1507). - A gate at the start of a road or a bridge at which you pay anamount of money in order to use the road or bridge. (Cambridge Dictionary, low price edition 1996 at page 1533) (E) Toll Plaza - a row of toll booths on a toll road (Ref. Concise Oxford Dictionary edition at page 1507) (F) It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred from the stipulation and terms and conditions of the contract and as per intention of the parties to the contract, any other meaning or intention can not be given to the contract and the agreement (supra) between the assessee company and TEA is intended to develop, operate and maintain a toll road , therefore, the AO took a reasonable and plausible view in allowing exemption u/s 80IA(4) of the Act. 56. The relevant operative part of decision of Hon ble Supreme Court in the case of Ishikawaijima Harima Heavy Industries Ltd. (supra) reads thus:- In constructing a contract, the terms and conditions thereof are to be read as a whole. A contract must be construed keeping in view the intention of the parties. No doubt, the applicability of the tax laws would depend upon the nature of the contract, but the same should not be construed keeping in view the taxing provisions. 57. On the basis of foregoing discussion, we are of the considered opinion that the business activities of the assessee company fall within the ambit of clause (a) of Explanation to section 80IA(4)(i) of the Act. We decline to agree with the ld. CIT-DR that the assessee is engaged in the dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... develop, design, engineer, frame, procure and construct toll road as result of which it was canvassed that the income from sale/development of land was indeed income derived from Business of development of toll road and would be eligible for deduction. We find that similar arguments have been advanced before us also. Considering the arguments advanced on behalf of the Revenue in paras 64 to 69 it is noted the Co-ordinate Bench finally in paras 71 to 81 came to the conclusion that development is a continuous process which starts from the date of commencement of business and beginning of the developmental activities and ends only when development work concludes. Thereafter operation and maintenance starts. The Co-ordinate Bench considering the facts, the language used and the legislative intent held that the assessee s claim was allowable. 10.16. We first reproduced para 60 to 63 to bring out the facts and arguments accepted by the Co-ordinate Bench:- 60. Ld. AR further contended that the assessee company entered into any concession agreement with TEA for development of an Expressway between Noida and Agra and assessee was given a right to collect toll/fees from the users ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for commercial, industrial, amusement, residential and institutional development. Further, the land was to be offered on acquisition cost on lease for 90 years by the TEA and the development of the said land and works thereon was a means for compensation and consideration to the infrastructure developer i.e. the assessee in view of the same. It was an obligation on the assessee towards the objective of the infrastructure development and as source of funds for meeting the investment involved in the project. Ld. AR vehemently contended that in view of above facts, the revenue/profits generated from subleasing of plots/land earned by the assessee are definitely an income derived from the Business of development of road and would be eligible for deduction. Ld. AR pointed out that the development of land was an integral and inseparable part of the business of road development due to its inextricable proximity with financial viability of the project and the word Business is wide enough to cover within its scope the profits from all activities that are integral part of road development. To support assessee s claim, ld. AR also pointed out that since sub-lease of plots is made pursuan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same is also eligible for deduction u/s 80IA of the Act. Ld. AR also contended that if a view is taken that as per clause (c) of section 80IA(4)(i) the deduction is available only after the enterprise starts operating and maintaining the infrastructure facility, the enterprise only developing such infrastructure facility would never be eligible for any deduction under this section, because such an enterprise would never operate or maintaining the infrastructure facility. Ld. AR repeated his earlier arguments and submitted that it is a settled legal preposition that a provisions should be interpreted in such a manner so that it subserves the purpose for which it is enacted and does not frustrate the same. 10.18. Considering the arguments, the Co-ordinate Bench concluded that the assessee is in the business of development of infrastructure facility of road including toll road and the assessee s activities fell within the ambit of clause (a) of Explanation to sub-section 80IA(4)(i) of section 80IA rejecting the conclusions drawn by the CIT, Noida as the activity of sub-lease or sale of land for development which was received by the assessee was found to be a major part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture facility or transferor enterprise to another enterprise i.e. transferee enterprise shall apply to the transferee enterprise as if it were the enterprise to which this clause (c) applies and the deduction form profits and gains would be available to such transferee enterprise for the remaining or unexpired period. The above noted meaning of aforesaid provisions is apparent from the language used therein. 74. Now if we consider the object of legislation, then as we have noted earlier that as per the heading given to the provision of section 80IA of the Act, the object of legislation is to provide deduction to the enterprises which are engaged in infrastructure development etc. It means that the infrastructure development is the main object of this provision to encourage entrepreneurs to put their resources and endeavours towards infrastructure development. In sub-section (2) the words develops and begins to operate any infrastructure facility have been used. We also note that explaining the first and second condition or eligibility of deduction is prescribed in clauses (a) and (b) to sub-section (4)(i) of the Act. 75. Noticeably, sub-section (4)(i) mandates that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We may further observe that the elaborate meaning of collective and cumulative reading of sub section (2) and (4)(i) mandates three preconditions in clause (i) of sub-section (4) viz. (a), (b) and (c) and it is required for the enterprise which claim deduction that all three conditions should be fulfilled simultaneously. If the intention of legislation was the deduction would be allowed only to the enterprise who develops and begins to operate and maintain infrastructure facility then it was not required to segregate or mandate the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining as stipulated in sub section (4)(i) and condition (a) and (b) thereto. This interpretation also finds support from proviso to subclause (c) i.e. third condition wherein the transferee of infrastructure facility is also held to be eligible in the same manner in which the transferor which developed such infrastructure facility, is eligible for the remaining or unexpired period of deduction. In this situation, we may safely infer or draw a conclusion that the intention of the legislation is to grant deduction not only to an enterprise which develops, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to wait till completion of the entire project during whole development period, which may have spread over several years, for want of this impractical condition. In this situation, the eligible enterprise would become eligible only in the last year of development wherein development work ends and infrastructure facility begins to operate, this certainly can not be an intention of the beneficial taxation legislation. 80. We further decline to accept the contention of ld. CIT, Noida and ld. CIT DR that since the assessee has not maintained separate books of accounts and has not created a reserve as required in Rule 18BBC and has not field required utilization certificate in Form 10CCC, therefore, the assessee is not entitled for deduction u/s 80IA(4)(i) of the Act as the sale of land or other activities being integral part of its highway project because since by earlier part of this order, we have held that the assessee is in the business of development of infrastructure facility of road including toll road and the assessee activities fall within the ambit of clause (a) of Explanation to sub-section (4)(i) of section 80IA of the Act and allegations and conclusion of ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the AO allowed the claim of the assessee without application of mind and thus, we respectfully hold that the benefit of the ratio of these orders/ judgments are not available for the Revenue in the present appeal as the facts and circumstances of the present case are clearly distinguishable from the facts of these cases and instant case is not a case wherein the AO passed assessment order without any enquiry, without application of mind and the AO failed to make proper enquiry. (emphasis provided) 10.22. We note that the assessment order in the base year has also been examined by the Co-ordinate Bench in the light of the ratio of the Hon ble Delhi High Court in CIT vs DLF Ltd. (2013) 350 ITR 555 (Delhi) to see whether the assessment order passed by the AO could be considered to be unsustainable in law. Considering the ratio of the said judgement, the Co-ordinate Bench found that the requisite shortcoming was not evident in the assessment order. 10.23. The Co-ordinate Bench in para 119 it is seen even proceeded to consider the issue of allowability of deduction on the income earned by the assessee from interest on fixed deposits of surplus funds with banks and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced which have been considered and not accepted by the Co-ordinate Bench in a speaking order cannot be of much help. In the absence of any infirmity justifying deviation from the view taken in the base year, we find no justification for deviating therefrom on same set of facts and law. Finding ourselves in agreement with the conclusions arrived at by the Co-ordinate Bench in the base year, we find that the assessee succeeds in its main prayer. Accordingly the without prejudice claim u/s 80IA(6) becomes academic and requires no adjudication at this stage. 10.25. We find that the issues of other income and depreciation can be said to have also been considered to some degree by the Co-ordinate Bench. Similarly the facts relatable to the claim u/s 40(a)(ia) have also been noted in passing by the Co-ordinate Bench. Since facts relatable to this are not in dispute the issue is claimed to be allowable in the light of the proposition of law canvassed on admitted facts. These aspects, we shall elaborate hereinafter. 10.26. Addressing the remaining issues in the present appeal, it is seen that vide Ground number and 7 the assessee before the Co-ordinate Bench addressed the denial of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that the AO took a reasonable and plausible view which cannot be held as unsustainable by any stretch of imagination. The Ld. AR finally submitted that the Ld. CIT did not conclusively hold that the order of the AO is not sustainable and the Ld. CIT is not empowered to set aside the assessment order, without any conclusion, for fresh adjudication without any legal cause or basis, hence, impugned order is not valid and justified. (emphasis provided) 10.28. It is seen that considering the facts and the power invoked by CIT, Noida the Co-ordinate Bench proceeded to consider the issues in the following manner:- 99. In the light of above stages emerged from the language used in section 263 of the Act and the proposition ratio of the decisions relied by both the parties, we proceed to examine the validity of assumption of jurisdiction. 10.29. As extracted earlier the Co-ordinate Bench observed that prima-facie there must be material on record to show that the order was not sustainable. The following paras 101 and 103 extracted hereunder will bring out the position:- 101. We may further note that by the earlier part of this order, we have held that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the order of the Assessing Officer which was found to be missing. In the said background, addressing the claim of the assessee addressed vide Ground No.5 to 8 clubbed under the heading Other income we find that apart from the argument that identical claims have been allowed by two different Assessing Officers in 2009- 10 and 2010-11 AYs in the scrutiny assessment order passed u/s 143(3) with due enquiry wherein the correctness of the base year has been upheld by the ITAT in the aforesaid order, it has also been argued on behalf of the assessee that in the set aside proceedings the AO himself had allowed the said claim which factual assertion has not been assailed by the Revenue. Reliance by the assessee it has been placed even before us on decision of the Hon ble Bombay High Court in the case of Lok Holding 308 ITR 356 (Bombay) so as to submit that the bank interest earned is business income for an assessee engaged in construction business. The Bombay High Court in the said decision it was submitted had considered the decision of Hon ble Apex Court in the case of Tuticorin Alkali (supra). 10.31. We further find that the income from sale/lease of plots has been in very c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of developing infrastructural facility. In the peculiar facts of the present case, we find on facts and considering the precedent available nothing has been brought on record to justify deviating from the view taken. The decisions relied upon operate on facts their own. Thus, we hold that interest income is to be treated as business income of the assessee. The miscellaneous income qua sale of scrap etc. again being directly and inextricably linked with the development of infrastructural facility it is to be treated as business income. Same is the position for money forfeited in the peculiar facts of the present case. However, on these last two sources of income since supporting evidences are not available the issue is restored for verification on facts. The claims principally we find are directly linked to the only business activity of the assessee in terms of the Agreement and findings thereon and principally it deserves to be allowed. Similarly gains from foreign exchange fluctuations arising directly out of the sole business activity of the assessee which is the infrastructural facility development we hold is inextricably linked and having a direct first degree nexus with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral facility and owned by the assessee has to be allowed. We restore the issue for verification on facts. 10.34. Coming to the next issue addressed in the present proceedings i.e the disallowance made and sustained u/s 40(a)(ia), we find considering the arguments and facts and the reasoning adopted by the AO that TDS was not deducted for payment of interest u/s 194A and for payment of lease rent in term of section 194I. The assessee has disputed that there was no need to deduct on the basis of facts and Agreements so as to argue that there is no interest payment as it is actually EDC i.e. External Development Charges which are to be made in a phased manner so as to cover for inflation over time; and rent is also actually a lease expense and not rent as understood and is part of capital acquisition of lease hold land and capitalized. The Ld.AR has also raised the argument that in terms of the decision of the Jurisdictional High Court in the case of CIT vs Vector Shipping Services [2013] 38 taxmann.com 77 (All.) there is no amount of the so-called rent or interest payable in the year under consideration and the said decision it has been submitted has not been upset till da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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