Income arising from activities which are only incidental to the business of developing, operating and maintaining infrastructure facility will not qualify for deduction under s. 80IA

L&T Transportation Infrastructure Limited Vs ITO (ITAT Chennai)- Roadside amenities cannot be treated as ‘infrastructure facility’ for the purposes of claiming deduction under Section 80-IA of the Income Tax Act.

The business of developing, operating and maintaining roads would not include the activity of business of developing operating and maintaining way side amenities, though such activity may be incidental to or facilitate the business of developing and maintaining roads and are the part of same agreement. It was held that assessee is not eligible for deduction under section 80IA of the Act for income derived from road amenities.

In respect of the income arising from the sale of scrap, the same represents the sale of left over materials which were acquired for developing road. Further, the sale of scrap could be considered as intimately connected with the business of developing, operating and maintaining infrastructure facility and hence the income arising from the sale of scrap was eligible for deduction under section 80IA of the Act.

Regarding fee for lying optical fibre cable and film shooting, as the entire facts are not available, it is not clear whether these incomes relate to road or the same relates to road side facility. Accordingly the issue relating to fee from lying down optical fibre cable and film shooting was set aside with a direction to the AO for verification and allow the deduction as permissible under law.

L&T Transportation Infrastructure Limited Vs Income Tax Officer

ITA No. 1680/Mds./10 

Assessment year: 2007- 08

Income Tax Officer vs. L&T Transportation Infrastructure Limited.

ITA No. 1696/Mds./10 

Assessment year: 2007- 08

Decided by – ITAT Chennai

Decided on – 22nd July, 2011

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