Appellate Tribunal Was Justified In Allowing Expenditure For Theperiod Prior To Assessment Year 2004-05? v. Following The Above, The First Substantial Question Of Law Is Answeredagainst The Revenue

OD-15 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITA/362/2009COMMISSIONER OF INCOME TAX, KOLKATA – IVVs.M/s. SELVEL MEDIA SERVICES PVT. LTD. BEFORE:The Hon'ble JUSTICE T. S. SIVAGNANAM ANDThe Hon’ble JUSTICE HIRANMAY BHATTACHARYYADate : 9[th] February 2023. Appearance:Mr. Soumen Bhattacharjee, Adv.…for the appellant.Mr. J.P. Khaitan, Sr. Adv.…for respondent The Court : We have heard Mr. Soumen Bhattacharjee, learnedstanding counsel appearing for the appellant and Mr. J.P. Khaitan, learnedsenior counsel for the respondent. This appeal filed by the revenue under Section 260A of the Income TaxAct, 1961 (the Act) is directed against the order dated 31.7.2009 passed bythe Income Tax Appellate Tribunal “B” Bench, Kolkata (the Tribunal) in ITANo. 1065/Kol/2008 for the assessment year 2005-06. The appeal was admitted on 14.01.2010 on the following substantialquestions of law for consideration :- A)Whether on the facts and circumstances of the case the learnedTribunal was justified in law in upholding the contention of theassessee that the deduction of the expenditure for development oftoilet blocks, bus shelters and foot over bridges are infrastructural facility as per explanation to Section 80 IA(4) of the Income-tax Act,1961 ? B)Whether on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in allowing expenditure for theperiod prior to Assessment year 2004-05? The first substantial question of law has to be decided against therevenue in the light of the decision of this Court in the case of assessee’ssister concern in Principal Commissioner of Income Tax, Kolkata 4, Kolkata Vs.Vantage Advertising Pvt. Ltd. in ITA No. 41 of 2017. In the said decision, thesaid question was answered against the revenue in the following terms : “The Commissioner of Income Tax [Appeals] and the Tribunal consideredthe fact and have returned the finding on merits. The Revenue’scontention is that the assessee is only an advertising firm putting bannerfor their own purpose and, therefore, the question of claiming of anydeduction under section 80IA of the Act would not arise. This appears tobe factually incorrect as is seen from the order passed by the CIT [A] aswell as the Tribunal where the Tribunal has clearly held that theassessee is engaged in infrastructure development which involvesconstruction of foot over bridge as well as the bus shelter and, therefore,the assessee is entitled to deduction under section 80IA of the Act. TheTribunal followed the decision of this Court in the case of Commissionerof Income Tax, Kolkata-IV, Kolkata vs. Selvel Advertising Pvt. Ltd., ITA 49of 2010 dated 22.4.2010 which was also a similar matter wherein anadvertising company engaged in infrastructure development has erectedautomatic traffic signal and pedestrian foot over bridge and the questionwas whether this would constitute infrastructure development ascontemplated in clause [a] of the Explanation to subsection [4] of section80IA of the Act. The Division Bench by the said judgement had upheldthe decision rendered by the Tribunal and dismissed the Revenue’s appeal. This decision has attained finality. Therefore, we are of the viewthat the decision of the Tribunal in so far as the claim of deduction madeby the assessee under section 80IA of the Act requires to be sustained.Accordingly, substantial questions of law nos.1 to 4 are answeredagainst the Revenue.” Following the above, the first substantial question of law is answeredagainst the revenue. With regard to the second substantial question of law, the issue is onceagain covered by the decision of this Court in Sutna Stone and Lime Co. Ltd.vs. Commissioner of Income Tax, 1991 (192) ITR 478 (Cal.). In fact, thedecision in Sutna Stone and Lime Co. Ltd. had been relied on and followed bythe learned Tribunal and the Tribunal has also pointed out that in theassessee’s own case for the assessment year 2004-05 in ITA No.1040/Kol/2008, this issue was decided in favour of the assessee. Following the above, the first substantial question of law is answeredagainst the revenue. With regard to the second substantial question of law, the issue is onceagain covered by the decision of this Court in Sutna Stone and Lime Co. Ltd.vs. Commissioner of Income Tax, 1991 (192) ITR 478 (Cal.). In fact, thedecision in Sutna Stone and Lime Co. Ltd. had been relied on and followed bythe learned Tribunal and the Tribunal has also pointed out that in theassessee’s own case for the assessment year 2004-05 in ITA No.1040/Kol/2008, this issue was decided in favour of the assessee. In the light of the above, the substantial question of law no.2 is alsoanswered against the revenue. In the result, the appeal is dismissed and the substantial questions oflaw are answered against the revenue. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)