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Sec. 80IA of Income Tax Act, 1961— Deduction — Assessee was a partnership firm M/s. Chetak Enterprises entered into an agreement with the Government of Rajasthan for construction of road and collection of road/toll tax. The construction of road was completed by the said firm on 27.3.2000 and the same was inaugurated on 1.4.2000. The firm was converted into a private limited company on 28.3.2000 named as M/s. Chetak Enterprises (P) Ltd. under Part IX of the Companies Act, 1956. The authority noted the change and cancelled the registration of the firm and granted a fresh registration code to the assessee-Company. As aforesaid, the road was inaugurated on 1.4.2000 and the assessee-Company started collecting toll tax. For the relevant assessment year, the assessee-Company claimed deduction under Section 80IA of the Income Tax Act, 1961. The assessing officer declined that claim of the assessee-Company, which decision was reversed by the Commissioner of Income Tax (Appeals),. The Income Tax Appellate Tribunal confirmed the decision of the first appellate authority. The Department preferred an appeal before the High Court.
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.
The Court had delineated the contours regarding permissibility of purposive interpretation of taxing/fiscal statutes, particularly in the context of an exemption. Thus the court dismissed the appeal. --- CIT vs. CHETAK ENTERPRISES PVT. LTD. 23 ITCD Online 22 (SC)