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2021 (6) TMI 367 - AT - Income TaxIntangible asset u/s.32(1)(ii) - asset in the nature of the road project concerned - HELD THAT:- This tribunal’s Special Bench’s decision in M/s.Progressive Construction Ltd. [2014 (11) TMI 401 - ITAT HYDERABAD] has already settled the issue that such a license agreement amounts to an intangible asset in the nature of right to collect toll amounts to an intangible asset u/s.32(1)(ii) of the Act. The Revenue’s stand that the assessee ought to have amortised the license fee paid to “NHAI” as per the CBDT’s circular (supra) also fails to make any difference since the same could not be taken as an attempt at the Board’s part to deny depreciation relief in any manner; whatsoever. Hon'ble apex court’s decision Taparia Tools Ltd. Vs. JCIT [2015 (3) TMI 853 - SUPREME COURT] holds that the mere option of amortisation would not debar an expenditure claim which is otherwise admissible as per law. We thus affirm the CIT(A)’s findings qua the first issue of depreciation disallowance. The Revenue’s corresponding grounds are rejected. Disallowance towards provision for periodical maintenance declined in the course of assessment - HELD THAT:- Revenue has nowhere disputed the assessee’s liability to maintain the road project even in the assessment findings as well. And also that Section 43B does not cover any of these clauses in principle as it has been observed in the CIT(A)’s order. We thus quote the hon’ble apex court’s landmark decision Chainrup Sampatram Vs. CIT [1953 (10) TMI 2 - SUPREME COURT] that an expenditure could be booked at the first sign of probability whereas the converse is not true qua income which has to be recognised as per the conservative system of accounting only. We thus affirm CIT(A)’s lower appellate findings under challenge allowing the assessee’s periodical maintenance claim going by its agreement clauses than mere estimation based thereupon. Disallowance of interest payment converted into FITL (Funded Interest Term Loans) - AO had invoked Section 43B of the Act towards the impugned provision of interest payment than actual payment of interest sum - HELD THAT:- We notice that there is no rebuttal from the Revenue’s side qua the clinching fact that the impugned ‘funded interest term loan’ is not a loan transaction but assessee’s contract agreement with the creditor party and therefore, the CIT(A) has held that the same is not exigible to ‘actual payment’ contemplated u/s.43B of the Act. We thus decline the Revenue’s instant last substantive ground as well.
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