In Brief
A partnership firm had contracted with Rajasthan's government to construct and collect tolls on a road. Before the agreement was finalized, the firm informed the government it would convert into a private limited company and requested the government allow this change in the agreement. The government approved. The firm converted on 28 March 2000, just before construction completion on 27 March 2000. The company then claimed tax deduction under Section 80-IA (for infrastructure enterprises). The tax authority denied it, but the appellate authority and tribunal reversed this. The Supreme Court upheld the decision, holding that the company, as legal successor to the firm, validly succeeded to all rights under the agreement by statute, fulfilling the conditions for the deduction.
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