Whether On The Facts And Circumstances Of The Case, Thelearned Tribunal Erred In Not Accepting The Principle Laiddown In The Case Of Cit-Iii Bangalore v. Vantage Advertising Pvt. Ltd

OD – 2 & 3 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION ORIGINAL SIDE IA NO:GA/1/2017 [OLD NO:GA/357/2017]INITAT/41/2017 PRINCIPAL COMMISSIONER OF INCOME TAX KOL-4, KOLKATAVSVANTAGE ADVERTISING PVT. LTD. IA NO:GA/2/2017 [OLD NO:GA/358/2017]INITAT/41/2017 PRINCIPAL COMMISSIONER OF INCOME TAX KOL-4, KOLKATAVSVANTAGE ADVERTISING PVT. LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMA N DTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate: November 18, 2021. Appearance :Mr. Sunity Chatterjee, Adv.Mr. M. Bandyopadhyay, Adv.… for the appellant.Mr. J. P. Khaitan, Sr. Adv.Mr. Pratyush Jhunjhunwalla, Adv. Ms. Swapna Das, Adv.Mr. Siddharth Das, Adv.…for respondent. Re: IA NO:GA/1/2017 [OLD NO:GA/357/2017] The Court : This application has been filed by the Revenuefor condonation of delay of 470 days in filing the appeal. Theexplanation offered by the Revenue is far from being satisfactory. Nevertheless being conscious of the fact that we have to decide anappeal under section 260A of the Income Tax Act, we have brieflyheard the learned counsel for the parties on merits and we find thatout of the four assessment years, which are subject matter of thisappeal, three of the assessment years the tax effect is below thethreshold limit and, therefore, the Revenue cannot prosecute theappeal and this leaves us with only the assessment year 2009-2010.The Tribunal has followed an earlier decision of this Court in respectof the said assessment year. Therefore, we exercise discretion andcondone the delay in filing the appeal. The application thus stands allowed. Re: IA NO:GA/2/2017 [OLD NO:GA/358/2017] In ITAT/41/2017 This appeal filed under section 260A of the Income Tax Act,1961 [The Act, in brevity] is directed against the composite orderdated 10.3.2015 passed by the Income Tax Appellate Tribunal “A”Bench Kolkata in ITA Nos. 1389 to 1392/Kol/2012 for the assessmentyears 2006-07, 2007-08, 2008-09, and 2009-10. The Revenue hasraised the following substantial questions of law for consideration : 1.Whether on the facts and in the circumstances of the case, the learned Tribunal erred in holding that Bus Shelter, footover bridge etc. come within the ambit of infrastructurefacility as defined in clause [a] of Explanation below sub-section [4] of section 80IA of the Income Tax Act ? 2.Whether on the facts and circumstances of the case, thelearned Tribunal erred in facts as well as in law in holdingthat the profits and gains from advertisement on hoardingwill fall within the ambit of expression “ derived frominfrastructure facility” as defined in section 80IA of theIncome Tax Act in particular the Explanation appended tosub-section [4] of section 80IA ?learned Tribunal erred in facts as well as in law in holdingthat the profits and gains from advertisement on hoardingwill fall within the ambit of expression “ derived frominfrastructure facility” as defined in section 80IA of theIncome Tax Act in particular the Explanation appended tosub-section [4] of section 80IA ? 3. Whether on the facts and circumstances of the case, thelearned Tribunal erred in not accepting the principle laiddown in the case of CIT-III Bangalore vs. Skyline AdvertisingPvt. Ltd. reported in 45 Taxmann 532[2014] Karnatakathough the issue is squarely covered by the said judgementof the Hon’ble High Court of Karnataka ?learned Tribunal erred in not accepting the principle laiddown in the case of CIT-III Bangalore vs. Skyline AdvertisingPvt. Ltd. reported in 45 Taxmann 532[2014] Karnatakathough the issue is squarely covered by the said judgementof the Hon’ble High Court of Karnataka ? 3. Whether on the facts and circumstances of the case, thelearned Tribunal erred in not accepting the principle laiddown in the case of CIT-III Bangalore vs. Skyline AdvertisingPvt. Ltd. reported in 45 Taxmann 532[2014] Karnatakathough the issue is squarely covered by the said judgementof the Hon’ble High Court of Karnataka ?learned Tribunal erred in not accepting the principle laiddown in the case of CIT-III Bangalore vs. Skyline AdvertisingPvt. Ltd. reported in 45 Taxmann 532[2014] Karnatakathough the issue is squarely covered by the said judgementof the Hon’ble High Court of Karnataka ? 4.Whether on the facts and circumstances of the case, thelearned Tribunal erred in deciding the issue of allowability ofdeduction under section 80IA of the Act in favour of theassessee and against the Revenue without considering theTax Audit Report which specifically mentions that the natureof business of the assessee is advertising which does notquality for exemption under section 80IA [4] ?learned Tribunal erred in deciding the issue of allowability ofdeduction under section 80IA of the Act in favour of theassessee and against the Revenue without considering theTax Audit Report which specifically mentions that the natureof business of the assessee is advertising which does notquality for exemption under section 80IA [4] ? 5.Whether on the facts and circumstances of the case, thelearned Tribunal erred in allowing 100% depreciation inhoardings which have been put to use for less than 180 daysin place of 50% as per section 32 [1] of Income Tax, 1961 ?learned Tribunal erred in allowing 100% depreciation inhoardings which have been put to use for less than 180 daysin place of 50% as per section 32 [1] of Income Tax, 1961 ? 6.Whether on the facts and circumstances of the case, theIncome Tax Appellate Tribunal is correct in allowingdepreciation @ 100% on hoardings treated as temporarystructures as against the treatment given by the AssessingOfficer as plant and machinery allowing depreciation at15%?Income Tax Appellate Tribunal is correct in allowingdepreciation @ 100% on hoardings treated as temporarystructures as against the treatment given by the AssessingOfficer as plant and machinery allowing depreciation at15%? The substantial questions of law nos.1 to 4 all concern thesame issue as to whether the assessee was entitled for deductionunder section 80IA of the Act. Therefore, a combined decision can betaken on these four questions. The remaining two questions are withregard to the depreciation on the hoarding and temporary structureserected by the assessee. We have heard Mr. Chatterjee, learned senior standingcounsel appearing for the appellant and Mr. Khaitan, learned seniorcounsel appearing for the respondent. The present appeal filed by the Revenue is against acomposite order passed by the Tribunal for four assessment years,namely, 2006-07, 2007-08, 2008-09, and 2009-10. It is submitted bylearned senior standing counsel for the Revenue that the appeal inrespect of the assessment years 2006-07, 2007-08, and 2008-09 arebelow the threshold tax limit as stipulated by the CBDT in its circular.If that is so, the Revenue cannot pursue the appeal in respect of thesaid assessment years and, accordingly, the appeal stands dismissed,in so far as the assessment years 2006-07, 2007-08, and 2008-09. We have heard Mr. Chatterjee, learned senior standingcounsel appearing for the appellant and Mr. Khaitan, learned seniorcounsel appearing for the respondent. The present appeal filed by the Revenue is against acomposite order passed by the Tribunal for four assessment years,namely, 2006-07, 2007-08, 2008-09, and 2009-10. It is submitted bylearned senior standing counsel for the Revenue that the appeal inrespect of the assessment years 2006-07, 2007-08, and 2008-09 arebelow the threshold tax limit as stipulated by the CBDT in its circular.If that is so, the Revenue cannot pursue the appeal in respect of thesaid assessment years and, accordingly, the appeal stands dismissed,in so far as the assessment years 2006-07, 2007-08, and 2008-09. For the assessment year 2009-10 we have considered the submissionon either side and we find that two fact finding Authorities, namely,The Commissioner of Income Tax [Appeals] and the Tribunalconsidered the fact and have returned the finding on merits. TheRevenue’s contention is that the assessee is only an advertising firmputting banner for their own purpose and, therefore, the question ofclaiming of any deduction under section 80IA of the Act would notarise. This appears to be factually incorrect as is seen from the orderpassed by the CIT [A] as well as the Tribunal where the Tribunal hasclearly held that the assessee is engaged in infrastructuredevelopment which involves construction of foot over bridge as well asthe bus shelter and, therefore, the assessee is entitled to deductionunder section 80IA of the Act. The Tribunal followed the decision ofthis Court in the case of Commissioner of Income Tax, Kolkata-IV,Kolkata vs. Selvel Advertising Pvt. Ltd., ITA 49 of 2010 dated22.4.2010 which was also a similar matter wherein an advertisingcompany engaged in infrastructure development has erectedautomatic traffic signal and pedestrian foot over bridge and thequestion was whether this would constitute infrastructuredevelopment as contemplated in clause [a] of the Explanation to sub-section [4] of section 80IA of the Act. The Division Bench by the saidjudgement had upheld the decision rendered by the Tribunal anddismissed the Revenue’s appeal. This decision has attained finality.Therefore, we are of the view that the decision of the Tribunal in so faras the claim of deduction made by the assessee under section 80IA of the Act requires to be sustained. Accordingly, substantial questions oflaw nos.1 to 4 are answered against the Revenue. So far as the substantial question of law no.5 is concerned,in assessee’s own case for the assessment year 2005-06, the decisionwas rendered in favour of the assessee and though the Revenue hasfiled appeal before this Court in ITA 334 of 2009 but this was not oneof the substantial questions of law, which has been admitted forconsideration. Thus it goes without saying that the decision in respectof the substantial question of law no.5 has been accepted by theRevenue. Accordingly, the said question is also decided against theRevenue.So far as the substantial question no.6 is concerned, thequestion is covered by the decision of the assessee’s own case inPrincipal Commissioner of Income Tax, Kolkata-IV vs. VantageAdvertising Pvt. Ltd., ITA 55 of 2018 with ITA 183 of 2018 dated31.7.2019 following the same substantial questions of law wasdecided against the Revenue. In the result, the appeal fails anddismissed and the substantial questions of law are answered againstthe Revenue in so far as the assessment year 2009-10. The stay petition is also dismissed. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)