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2019 (4) TMI 2118 - AT - Income TaxValidity of Order passed u/s 263 - assessee was given right to develop and maintain Toll Road and also right to collect the Toll for specific period - depreciation on intangible asset - PCIT directed AO to pass fresh assessment order in respect of depreciation claim of assessee with special emphasis on cost of project as claimed by the assessee in the light of CBDT Circular No.9/2014 dated 23.04.2014 and the order passed in North-Karnataka Expressway [2014 (11) TMI 351 - BOMBAY HIGH COURT] - HELD THAT:- Hon’ble Delhi High Court in PCIT vs. Delhi Airport Metro Express Pvt. Ltd. (2017 (9) TMI 529 - DELHI HIGH COURT) held if the PCIT is of the view that Assessing Officer did not undertake any enquiry, it became incumbent on the PCIT to conduct such enquiry. All that PCIT has done in the impugned order is to refer to the Circular of CBDT and conclude “in case of assessee-company, the AO was duty bound to calculate and allow depreciation on the BOT in conformity of the CBDT Circular 9/2014 but the AO failed to do so. Therefore, the order of the AO is erroneous insofar as prejudicial to the interest of revenue”. The Hon’ble High Court took the view that this can hardly constitute the reasons required to be given by the PCIT to justify the exercise of jurisdiction under section 263. If the assessee has wrongly claimed depreciation on asset like land and building, it was incumbent upon the PCIT to undertake an enquiry as regards which of the assets were purchased and installed by assessee out of his own fund during the A.Y. in question and, which were those that were handed over to DMRC. That basic exercise of determining to what extent, the deprecation was claimed in excess has not been undertaken by ld. PCIT and the Hon’ble High Court upheld the decision of Tribunal in setting-aside the order passed under section 263 of the Act. We are of the view that during the assessment, the Assessing Officer has taken a possible view in allowing depreciation on intangible asset. Therefore, in our view, the order passed by Assessing Officer is not erroneous. Thus, the twin condition as provided under section 263 of the Act was not fulfilled. Even otherwise, we are of the view that the issues on which the assessment order was set-aside has already been decided in West Gujarat Expressway Ltd.[2015 (5) TMI 305 - ITAT MUMBAI], Rohan & Rajdeep Infrastructure [2018 (2) TMI 2073 - ITAT PUNE] and Progressive Construction Ltd. [2017 (3) TMI 1167 - ITAT HYDERABAD]. The Special Bench of Hyderabad Tribunal and coordinate benches of Pune and Mumbai after considering the decision of North Karnataka Expressway Ltd [2014 (11) TMI 351 - BOMBAY HIGH COURT]and CBDT Circular No. 9/2014 allowed depreciation on intangible asset. Therefore, we are of the considered view that the ld. PCIT was not justified in revising the assessment order - Decided in favour of assessee.
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