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CBDT: widening of an existing road by constructing additional lanes would be regarded as a new infrastructure facility for the purpose of Section 80IA (4)(i). However,simply relaying of an existing road would not be classifiable as a new infrastructure facility for this purpose.

May-22nd-2010

  

CBDT Issued a clarification regarding definition of New Infrastructure Facility in respect of Widening of Existing Road (Ciruclar No 04/2010 dated 18th May 2010 

Subject:- Widening of existing road – definition of a new infrastructure facility – clarification regarding.
References have been received by the Board as to whether widening of existing roads constitutes creation of new infrastructure facility for the purpose of Section 80IA (4)(i) of the Income Tax Act, 1961.
 
 Section 80IA (4)(i) provides for a deduction to an undertaking engaged in developing, or operating and maintaining, or developing, operating and maintaining any infrastructure facility subject to satisfaction of the conditions laid down in the Section. The Explanation to subsection 80IA(4)(i) states that for the purpose of this clause, infrastructure facility means inter alia:-

 

“(a) a road including toll road, a bridge or a rail system; 

(b) a highway project including housing or other activities being an integral part of the highway project;” 

 The issue has been examined by the Board. It has been decided that  

widening of an existing road by constructing additional lanes as a part of a highway project by an undertaking would be regarded as a new infrastructure facility for the purpose of Section 80IA (4)(i). However,  simply relaying of an existing road would not be classifiable as a new infrastructure facility for this purpose.

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