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As regards clause (b) of Section 80IA( 4)(i), the requirement predicated is that the assessee must have entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing, (ii) maintaining and operating or (iii) developing, maintaining and operating a new infrastructure facility. As aforesaid, in the presentcase, the agreement was initially executed between the erstwhile partnership firm and the State Government, but with clear understanding that as and when the partnership firm is converted into a company, the name of the company in the agreement so executed be recorded recognising the change. Notably, the agreement itself mentions that M/s. Chetak Enterprises as party to the agreement was meant to include its successors and assignee. Further, the State Government had granted sanction to the company and the original agreement entered into with the firm automatically stood converted in favour of the assessee-Company, which came into existence on 28.3.2000 being the successor of the erstwhile partnership firm. Thus understood, even the stipulation in clause (b) of Section 80IA( 4)(i) is fulfilled by the assessee-Company. Since these are the only two issues which weighed with the assessing officer to deny deduction to the assessee-Company as claimed under Section 80IA of the Income Tax Act, the first appellate authority was justified in reversing the view taken by the assessing officer. For the same reason, the ITAT, as well as, the High Court have justly affirmed the view taken by the first appellate authority, holding that the respondent/assessee-Company qualified for the deduction under Section 80IA being an enterprise carrying on the stated business pertaining to infrastructure facility and owned by a Company registered in India on the basis of the agreement executed with the State Government to which the respondent/assessee-Company has succeeded in law after conversion of the partnership firm into a company. Learned counsel for the appellant has relied on the decision of this Court in Giridhar G. Yadalam vs. Commissioner of Wealth Tax & Anr. (2015) 17 SCC 664. In the said decision, the Court had delineated the contours regarding permissibility of purposive interpretation of taxing/fiscal statutes, particularly in the context of an exemption. This decision is of no avail to doubt the correctness of the view taken by the High Court vide the impugned judgment, in the facts of the presentcase. In view of the above, the appeal stands dismissed with no order as to costs.

Shanti Prime Publication Pvt. Ltd.

Sec. 80IA of Income Tax Act, 1961—Deduction — The assessee was Vodafone Essar Gujarat Limited was a company engaged in the business of providing cellular telecommunication services in the State of Gujarat. The assessee was established in the year 1997-1998. During the previous year relevant to the assessment year 2001-2002, there was a change in the share- holding of the assessee company, as a result of which the provisions of section 79 of the Income Tax Act, 1961 was made applicable and the accumulated losses from the assessment years 1997-1998 to 2001-2002 lapsed.The assessee earned profit during the assessment year 2005-2006 and it being a telecommunication service provider was eligible for 100% deduction under section 80IA of the Act, 1961 in respect of the profits derived from the telecommunication services. The assessee therefore, made a claim for deduction under section 80IA of the Act, 1961 for the first time for the assessment year 2005-2006. The assessee filed its return of income for the assessment year 2005-2006 declaring total income at Rs. Nil. The assessee company computed the gross total income after reducing its carry forward losses and unabsorbed depreciation after the assessment year 2001-2002. The assessee company did not claim the losses prior to 2001-2002 during which the change in the share -holding took place by applying the provision of section 79 of the Act, 1961. Therefore, in the return of income after computing the gross total income, in the aforesaid manner, the assessee claimed deduction under section 80IA of the Act,1961. The assessee being eligible for deduction of 100% profit from the business of telecommunication services, the whole of the gross total income was claimed as deductible under section 80IA of the Act, 1961.The Assessing Officer rejected the contention of the assessee and disallowed the claim of the assessee for deduction under section 80IA of the Act, 1961 considering the deduction under section 80IA at Rs. Nil. The assessee preferred appeal before the CIT(Appeals). CIT (Appeals) confirmed the assessment order and dismissed the appeal.The assessee therefore, preferred Appeal before the Tribunal.The Tribunal concurred with the findings arrived at by the Assessing Officer and the CIT(Appeals) and dismissed the appeal filed by the assessee on this issue. The provision of section 80IA( 5) of the Act, 1961 cannot be invoked to ignore the provisions of section 79 by virtue of which the business loss of the assessee prior to year 2001-2002 has already lapsed. The Assessing Officer, CIT(Appeals) and the Tribunal were therefore, not justified in applying section 80IA( 5) of the Act so as to ignore the losses which have already lapsed by operation of section 79 of the Act.
The appeals were allowed by the court and The Impugned orders passed by the Tribunal in the respective Tax Appeals were quashed and set aside. The substantial question was answered in favour of the assessee and against the Revenue. --- VODAFONE ESSAR GUJARAT LIMITED vs. Asstt. CIT.[2020] 23 ITCD Online 91 (GUJ)