TMI Blog2020 (1) TMI 1609X X X X Extracts X X X X X X X X Extracts X X X X ..... ated. Further, in the said interim order the Hon ble Supreme court held that the assessee can claim deduction by paying tax on the amount claimed as deduction, as if section 43b(f) is on statute book. However, till final outcome of the decision of the Hon ble Supreme Court, the revenue will not recover interest and penalty which may accrue - We set aside the issue to the file of the Ld. AO and direct him to adjudicate the issue afresh, as per the final decision of the Hon ble Supreme Court, in the case of Exide Industries Ltd (supra). Disallowances u/s 40(a)(ia) - non deduction of tax at source - CIT(A) after going through the details submitted by the assessee noted that provision made by the assessee had no scientific basis and more than 50% of the liability was non-existent - HELD THAT:- This matter needs to be examined by the Ld. AO, in light of various averments made by the assesee, including reversal of excess provision in subsequent financial year and deduction of TDS on said amounts, as and when, payment is made to the parties. Hence, we restored the issue to the file of the Ld. AO with a direction that if any disallowances is made in the year under consideration, the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income itself is not taxable and should go to reduce the cost of the project. We are of the considered view that short term capital gain derived from sale of units of mutual funds and interest earned from fixed deposits kept in banks out of idle funds of project is rightly credited to capital working progress account, during the implementation period of the project. Hence, we direct the Ld.AO to delete additions made towards short term capital gain derived from sale of units of mutual funds. We, further direct the ld. AO to delete enhancement made by the ld. CIT(A) towards interest income earned from fixed deposits with banks invested out of idle funds of project. Additional ground claiming passenger service fees security component not to be in the nature of income and the same ought to have been excluded from the total income of the assessee - HELD THAT:- It is an admitted fact that the Tribunal had considered an identical issue for AY 2008-09 [ 2017 (2) TMI 640 - ITAT MUMBAI] and after considering relevant facts, including agreement between the assesee and the AAI and also instructions, dated 19/01/2019 issued by MOCA held that PSF-SC collected by the assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent fees collected from passengers could not be regarded as income of the assesee within the meaning of section 2(24) of the I.T.Act, 1961. Disallowances u/s.14A r.w.s Rule 8D - facts with regard to the impugned disputes are that during the year under consideration, the assessee had not earned any exempt income - HELD THAT:- Admittedly, the assessee had not earned any exempt income for the year under consideration. Once, there is no exempt income, then the question of disallowances of expenditure incurred in relation to said exempt income does not arise. Disallowances of employees contribution of ESIC u/s 36(1)(va) r.w.s. 43B - HELD THAT:- It is an admitted fact that the assesee had remitted employees contribution to ESIC before filing the return of income. In fact, the payments have been made within due date as per respective statute and delay is only on the part of banks in realizing the cheques. Once, the payments have been made on or before due date of filing return of income, then they same cannot be disallowed u/s 36(1)(va) r.w.s.43B of the I.T.Act, 1961. This legal proposition is supported by the decision of Hindustan Organics Chemicals Ltd. [ 2014 (7) TMI 477 - BO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be allowed. GROUND NO.3: On the facts and in the circumstances of the case and the law, the Ld. CIT(A) erred in confirming the additions made by A.O of the Short-term Capital Gains of Rs 1,71,55,197/- which was earned from sale of units of 'Mutual Fund1 invested out of idle funds of borrowings of the project division. The appellant prays that nothing is taxable as short term capital gain In view of the circumstances, facts and the law. GROUND NO. 4: On the facts and in the circumstances of the case and the law, the Ld. CIT(A) erred by ordering suo-moto enhancement of the interest Income of Rs 4,68,46,632/- under the head 'Income from other sources' earned from investments made in Term Deposits out of idle funds of borrowings of the project division. The appellant prays that the same may be deleted. GROUND NO. 5: On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred by holding the Passenger Service Fee - Security Component [PSF (5C)] of Rs. 51,03,65,280/- as the taxable income of the Appellant. The appellant prays that the PSF (SC) is not the income of the appellant and hence be deleted. The Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... layed payment of employees contribution of PF ESIC Income from other sources 3 As per return of income 19,11,27,544 Capital Gain 4. Short term capital gain as per return 1,98,46,728 Add: STCG adjusted against project cost 1,71,55,197 3,70,01,925 5 Gross total income 433,99,54,336 6 Less: Deduction u/s 80G 97,60,000 7 Income after deduction under Chapter VI-A 433,01,94,336 8 Add: Surplus from PSF funds offered as per assessee s return of income 51,03,65,280 9 Total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in this case is still awaited. The Ld. AR, further submitted that since, the matter is sub-judiced before the Hon ble Supreme Court and also, the Hon ble court, in its subsequent interim order has laid down conditions for claiming deduction for provision for leave encashment, as per which, the assessee can claim deduction by paying tax on the portion of amount claimed, as if section 43B(f) is on statute book. But, at the same time, it would not be entitled to make a claim in its return of income. The Ld. AR, further submitted that since, the matter is still pending before the Hon ble Supreme Court, the matter may be set aside to the file of the Ld. AO and to decide the issue after final outcome of the decision of Hon ble Supreme Court, in the case of Exide Industries Ltd. (supra). In this regard, he relied upon the decision of ITAT, Mumbai, in the case of Birla Sunlife asset Management company Ltd. in ITA No. 5457/Mum/2013, dated 30/06/2015. 7. The ld. DR, on the other hand strongly supported order of the Ld. AO, as well as the Ld.CIT(A), however he fairly accepted the issue may be set aside to the file of the Ld. AO to decide in accordance with the final outcome of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, after taking note of submissions of the assesse made disallowances of Rs. 17,57,71,673/- u/s 40(a)(ia) of the Act, for non deduction of tax at source. The Ld.CIT(A) after going through the details submitted by the assesse noted that provision made by the assesee had no scientific basis and more than 50% of the liability was non-existent. Therefore, he has upheld the disallowances, on the ground that, the provision was without any scientific basis and the liability had not accrued as on 31/03/2013. 10. The Ld. AR, for the assessee submitted that the Ld. AO and the Ld.CIT(A) did not truly appreciate the basis of provision made towards various expenditure, on the basis of estimates provided by the departments heads and the excess provision, if any has been reversed subsequently, as and when, the final payment is made to the service providers. The Ld. AR, further submitted that the assessee has been following consistent method of making provision for expenditure at the end of the financial years, on the basis of estimates provided by the department heads. He, further submitted that the assessee, neither claims any double deduction, nor there is any tax impact on the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/debit notes/claims from the parties. The assessee has been following consistent method making provision for expenditure at the end of the financial year, in respect of service provided by various parties and such estimate had been made on the basis of estimates provided by the department heads. Further, as and when, the amount has been paid to the service providers on receipt of proper invoices/claims, the assessee has dedcuted applicable TDS on said payment. We, further noted that the excess provision, if any is made, in respect of certain expenditure has been reversed, subsequently on payment of pending bills to the service providers. This practice has been followed right from last so many financial years. In the light of the above factual back ground, if you examine the claim of the assessee towards provision for year under expenses, we found that during the year under consideration, the assesee has made provision of total expenditure of Rs. 59,40,33,948/-. This provision comprised expenditure of Rs. 16,54,10,394/-, on which the assessee was not required to deduct any tax at source. Further, it also included expenditure of Rs. 25,28,51,881/-, on which TDS has been deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax neutral. Further, the Ld.CIT(A) had come to the conclusion that the liability is not accrued and also, there is no scientific basis for making provision, only on the basis of verification of selective entries. Therefore, we are of the considered view that this matter needs to be examined by the Ld. AO, in light of various averments made by the assesee, including reversal of excess provision in subsequent financial year and deduction of TDS on said amounts, as and when, payment is made to the parties. Hence, we restored the issue to the file of the Ld. AO with a direction that if any disallowances is made in the year under consideration, the Ld. AO shall consequently allow deductions to the assessee in the year of actual payment or reversal, as a case may be. 13. The next issue that came up for our consideration from ground NO.3 and 4 of assessee appeal is confirmation of addition of Rs. 1,71,55,197/-, on account of short term capital gain from transfer of units of mutual funds invested out of idle funds of borrowings of the project division and consequent enhancement of interest income from fixed deposits of Rs. 4,68,46,632/- under the head income from other sources. The fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts had to be credited to the TRA main account. From the above, it is very clear that even the consortium banks have allowed the assessee to park the funds in short term investments, but any income earned out of such investments needs to be utilized for the purpose of the project. The Ld. AR, further referring to paper book filed by the assessee, submitted that if you go through the investments in mutual funds and fixed deposits made by the assessee, the said investments have been made for a period which varies from 03 days to 45 days. From the above, it is very clear that there is a direct nexus between the funds borrowed and funds invested and accordingly, where funds are inextricably linked with the project, then any income arised out of said investments needs to be set off with capital work in progress of the project till, such time, the project was under implementation. The ld. AR, further submitted that although, the ld. AO, as well as the Ld.CIT(A) have heavily relied upon the decision of Hon ble Supreme Court in the case of Tuticorin Alkali chemicals and fertilizers Ltd. (supra), but, if you go through the facts of the present case, the decision of Hon ble Supreme court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows. The assessee had entered into an arrangement with IDBI as lead banker and other banks in the consortium to avail funds of Rs. 4,231/- crores for its capital project. These funds were released from time to time as per the requirements of the project. However, the bank released funds as per its schedule which varied little with the timing of requirements and on occasions., the assessee had at its disposal more funds disbursed than current requirement. Therefore, in order to reduce the cost of interest and to meet the stipulations of sanctioned loan, the assessee had invested such funds in the meantime in liquid investments like bank FD and mutual fund and earned income by way of interest on deposits and short term capital gain. It is the case of the assessee that since the interest on borrowed project fund is being added to capital work-in-progress and that project is not completed,, the income earned from investment should be reduced from the capital work-in-progress as fund utilized for investment is raised for the project and it is inextricably linked with the setting up of the project. 17. In order to ascertain the nature of investment, it is pertinent to note the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b).... (c).. 19. The undertakings of the assessee have been spelt out in clause 8 of the agreement and the relevant portion (page 220 and 221 of the PB) is extracted below '8 UNDERTAKINGS OF THE BORROWER: The Borrower undertakes to each of the Lenders that throughout the currency of the Facilities and so long as any sum is or may become payable under any Finance Document the Borrower shall, unless the Lender/Lenders Agent otherwise agree in wriging: (a)... (b)... (g) ensure that all amounts standing to the credit of any of the Retention Accounts are utilized/applied only in accordance with this Agreement: (h).... 20. Thus, the assessee had no liberty to utilize the funds borrowed but it was obliged to utilize the funds only in accordance with the agreement. Further, the assessee was obliged to invest the idle funds as per clause 13 of the agreement and the relevant portion (pages 223 to 225 of the PB) is extracted below 13 A UTHORISED INVESTMENTS 13.1 Power to invest The Borrower may require, subject to as provided in this Agreement, that such part of the amounts standing to the credit of Retention Accounts as it considers prudent shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t page 184 of the PB. On its perusal, it can be seen that the assessee had invested in mutual funds on 26 occasions for short period which varied from 3 days to 42 days. The particulars of investment made in fixed deposit of the bank are filed at page 192 of the PB. On its perusal it can be seen that the assessee had invested in fixed deposit on 65 occasions for short period which varied from 8 days to 46 days. It is further submitted that there is direct nexus between the fund borrowed and fund invested. Therefore, the interest paid on borrowed amount needs to be taken into account while computing income from the investment. It is submitted that it is well settled is law that if the funds inextricably linked with the project are utilized in making income yielding investment, then such income earned would go to reduce the cost of the project and hence, such income should be reduced from the capital work-in-progress. 22. In this respect, our attention is invited to the order of the Hon'ble Tribunal, Mumbai Bench, in the case of Island Star Mall Developers P. Ltd. v ACT (ITA no. 5078/Mum/2014) which is filed at pages 248 to 257 of the PB. In that case, the assessee had borrowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio of the judgment of the Hon'ble Supreme Court in the case of CIT v/s Bokaro Steel Ltd., [1999] 236 ITR 315 (SC), and not by the judgment of Hon'ble Supreme Court in Tuticorin Alkali Chemicals Fertilisers Ltd. (supra), as contended by the Revenue. The distinction in the application of the two aforesaid judgments of the Hon'ble Supreme Court has been aptly brought out by the Hon ble Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd. (supra) in the following words:- In our opinion, the Tribunal has misconstrued the ratio of the judgment of the Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals [1997] 227ITR 172 and that of Bokaro Steel Ltd, [1999] 236 ITR 315. The test which permeates through the judgment of the Supreme Court in Tuticorin Alkali Chemical [1997] 227 ITR 172 is that if funds have been borrowed for setting up of a plant and if the funds are surplus and then by virtue of that circumstance they are invested in fixed deposits the income earned in the form of interest will be taxable under the head Income from other sources . On the other hand, the ratio of the Supreme Court judgment in Bokaro Steel Ltd., [1999] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was unable to give specific working of interest for pre-allotment and post allotment period, the claim of the assessee was not allowed and interest income was added to total income of the assessee under the head Income from other sources . The CIT(A) upheld the order of the Assessing Officer. However, the Tribunal, and later High Court, allowed the claim of the assessee. On further appeal by the Revenue, the Supreme Court upheld the order of the High Court and held that the rationale laid down in the case of Bokaro Steel Ltd. would apply. The relevant observations of the Supreme Court are extracted below for the sake of ready reference; 11. Further, the rationale of judgment of Bokaro Steel Ltd. (supra) was followed in CIT vs. Karnal Co-operative Sugar Mills Lid. (2000) 161 CTR (SC) 241 : (2000) 243 ITR 2 (SC) . In this case,- the company had deposited certain amount with the bank to open letter of credit for purchase of machinery for setting up plant. On the money so deposited, it earned interest. In that background, this Court observed that this is not a case where any surplus shares capital money which was lying idle had been deposited in the bank for the purpose of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank. This nexus brought out a presumption in assessee's favour that money was deposited not without a purpose but with the object of acquiring machine from the supplier. Such interest income being directly relatable to the terms of the contract for acquiring a business asset should go to reduce the cost of the asset acquired out of the transaction. Hence, the interest could not be taxed as income from other sources, but should reduce the cost of assets acquired out of the transaction. The Revenue filed appeal before the Hon'ble Supreme Court and the same was dismissed with following observations: In the present case, the assessee had deposited money to open a letter of credit for the purchase of the machinery required for setting up its plant in terms of the assessee's agreement with the supplier. It was on the money so deposited that some interest has been earned. This is, therefore, not a case where any surplus share capital money which is lying idle has been deposited in the bank for the purpose of earning interest The deposit of money in the present case is directly linked with the purchase of plant and machinery. Hence, any income earned on such deposit i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank because, the assessee was not in a position to proceed with the implementation of the project due to various bottlenecks beyond the control of the assessee. It is also to be noticed that the assessee was not paying any interest on such funds as it is its share capital which is meant were setting up of the project only. Such deposits are, in our opinion, inextricably linked with the project and are part of capital work-in-progress. The Hon'ble Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd., reported in (2009) 181 taxmann 249 (Del) and in the case of CIT Vs. Facor Power Ltd,, reported in (2016) 66 Taxmann.com have reiterated the principle laid down in the case of Bokaro Steel Ltd., (supra) to hold that 'the interest' earned on funds primarily bought for infusion in the business could not be classified as income from other sources . We find that CIT(A) has followed these decisions for granting relief to the assessee. Therefore, we see no reason to interfere with the order of the CIT(A) on this issue. 27. Coming to judgment relied upon by the Ld.CIT(A) in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v CIT ( 227 ITR 172) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee under the Act, then the assessee should be granted deduction in respect of interest paid on borrowed funds which had been utilized in making investments giving rise to impugned income. The Assessing Officer has declined to consider the interest paid on the borrowed funds, which were utilized for making investment in Mutual Fund, for the reason that there is no provision for allowing interest expenses for computing, income under Chapter VII of the Act. The CIT(A) has upheld the order the Assessing Officer. Further, the CIT(A) has added interest earned on fixed deposit without granting any deduction for interest paid on borrowed funds utilized for making investment in fixed deposits. 30. It is submitted that interest paid on borrowed funds is required to be taken into account while computing the income of the assessee arising out of investments which were made by using borrowed funds. In this respect, our attention is invited to the order of the Tribunal, Mumbai Bench, in the case of DCIT v. Shri Fritz D, Silva in ITA no. 236/Mum/2010 dated 08.05.2015. In this case, the interest cost incurred for acquisition of shares was considered as cost of shares by the assessee whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully covers the conclusion drawn by the CIT(A) in the present case. Notably, it is not disputed by the Revenue that the interest costs in question were incurred on the funds utilized for acquisition of shares in the past In fact as per the Statement of Facts filed before the CIT(A), the assessee had tabulated the amount of interest capitalized along with the cost of shares, which were purchased in the past. The assessee had also asserted before the CIT(A) without rebuttal, that the interest cost so incurred in the past was not claimed as a deduction against any other income. Be that as it may, in so far as the factual position is concerned, there is no denial by the Revenue that monies borrowed have been utilized for acquisition of shares in question. Therefore, having regard to the factual findings of the CIT(A), in our view, the legal position as propounded by the Hon'ble Madras High Court in the case of Tn'shul Investments Ltd (supra) supports the plea of the assessee that interest paid for acquisition of the shares would partake the character of cost of shares and, therefore, assessee had rightly capitalized the interest along with the cost of acquisition for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her decisions and provisions of section 57, the DR argued that it is difficult to entertain assessee's claim of deduction of interest u/s.57(iii) of the Act. After taking into account rival submissions, the Tribunal held that the directions were issued to the Assessing Officer after taking into account that the principle of apportionment of expenditure allowable u/s. 57(iii) was inherent. However, the Assessing Officer proceeded with assumption that the assessee's claim was not allowable at all u/s.57(iii) of the Act. The Tribunal rejected the contentions of the DR in respect of alienability of deduction and apportionment and directed the Assessing Officer to work out quantum of interest expenditure which is allowable u/s. 57(iii) of the Act. The relevant observations of the Tribunal are extracted below: 8. The Id. DR has laid great emphasis on the phraseology of section 57(iii) and has relied upon the Bombay High Court decision in the case of Globe Theatres Pvt Ltd. (supra) and the Delhi High Court decision in the case of Siddho Mal Sons (supra). In these cases, the Hon'ble Courts were called upon to adjudicate the deducibility of certain expenses under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and by the Gujarat High Court in the case of H.K. Investment Co. Pvt Ltd, (supra). The Id. OR has relied on the Supreme Court in the case of Smt. Padmavathi Jaikrishna (supra). In this case, the assessee derived income from other sources In the shape of interest dividend etc. Out of the interest of Rs. 26,986 paid by the assessee on monies borrowed, the ITO disallowed a sum of Rs. 10,239 on proportionate basis on the ground that to that extent the loan was used to discharge the assessee's liability for payment of incometax, wealth-tax and annuity deposits. In these circumstances, it was held by the Supreme Court that the Department was justified in disallowing the interest on the loan, which was not incurred for the purpose of making investment yielding interest and dividend income. Similarly, in the case of Ms. Ila R. Ambani, the ITAT, Mumbai Bench observed that the interest paid on loan used for acquiring jewellery cannot be said to have been incurred for making or earning income chargeable to tax under section 56. In our view, the assessee's claim for apportionment is clearly supported from the various judicial pronouncements and we feel that the view expressed by the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord at pages 184 and 192 of the PB. Therefore, in view of the orders relied above, the assessee is eligible for deduction of interest cost from the corresponding income arising out of investments made out of borrowed funds. Hence, we direct the Assessing Officer to grant such deduction while arriving at taxable income arising from such investment. However, this is without prejudice to the main finding that the income itself is not taxable and should go to reduce the cost of the project. 33. In this view of the matter and considering the ratio of case laws discussed hereinabove, we are of the considered view that short term capital gain derived from sale of units of mutual funds and interest earned from fixed deposits kept in banks out of idle funds of project is rightly credited to capital working progress account, during the implementation period of the project. Hence, we direct the Ld.AO to delete additions made towards short term capital gain derived from sale of units of mutual funds. We, further direct the ld. AO to delete enhancement made by the ld. CIT(A) towards interest income earned from fixed deposits with banks invested out of idle funds of project. 34. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now been expunged by the Tribunal. Therefore, the Ld. AO may be directed to exclude Passenger Service Fees-Security component from the income of the assessee. 36. The Ld. DR on the other hand strongly supporting order of the Ld.CIT(A) submitted that although, the issue is decided in favour of the assessee for earlier assessment year 2008-09, but, there is a specific observations in the order of the Tribunal to the effect that in case any violations in utilization of funds, then the Ld. AO is at liberty to treat such misappropriation as income of the assesse. The Ld.CIT(A) based on said observations of the Tribunal has brought out various misappropriations, in respect of utilization of funds as per audit report of CAG. Therefore, it is incorrect on the part of the assesee to say that the issue has been fully covered in favour of the assesses by the decision of ITAT for AY 2008-09 37. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. It is an admitted fact that the Tribunal had considered an identical issue for AY 2008-09 in ITA No.2760/Mum/2012 and after considering relevant facts, including agreement be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961? 14.7. Having heard both the parties, we have pondered over all the three issues and few other allied issues which were germane to the issues before us and necessary for deciding these grounds, and all these issues are decided hereunder one by one. 14.8. With regard to the first issue, the brief facts and background brought before us are that in pursuance to process of privatisation of airports in India, the assessee company had entered into an agreement in the nature of OMDA with Airport Authority of India to operate, maintain, develop, design, construct, upgrade, modernise, finance and manage the Chhatrapati Shivaji International Airport at Mumbai (hereinafter called airport , in short). As per Rule 88 of the Aircraft Rules, 1937, the assessee was entitled to collect a fee termed as Passenger Services Fee (PSF) from all the passengers embarking at the airport. The said fee was initially collected by the concerned airline and then handed over to the assessee company for the sake of administrative convenience. As per terms, the PSF was chargeable @ Rs.200 per passenger, out of which Rs.70/- (i.e. 35% of PSF) was for use of assessee company for passenger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of assessment proceedings would not alter the true position of law and would not make the aforesaid amount as liable to be taxed in the hands of the assessee, if the same is actually not liable to be taxed as per the provisions of the Income-tax Act. 14.10. We have analysed this issue. It is well settled position of law that an amount can be brought to tax in the hands of an assessee only in accordance with the provisions of Income tax Act. This fundamental position has been well explained and well settled in many judgments. It is well settled that there is no estoppels against law. No tax can be collected except with the authority of law as per clear mandate of Article 265 of Constitution of India. If the taxes are to be collected depending upon consent/concurrence of the taxpayers or otherwise, then it will lead to chaotic situation and administration of tax would become impossible. Therefore, if an amount is taxable under the law, assessee is bound to pay tax thereon and if an amount is not taxable under the Incometax law, then the tax cannot be recovered from the assessee without authority of law merely because assessee offered the same to tax during the course of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. In view of this clear position regarding the effect of the circular, it was obvious that in the instant case it was incumbent on the Income-tax officer to advise the assessee to claim relief under section 2(5)(a )(iii) if the proceeding or any other particulars before him at the stage of the original assessment indicated that the assessee was entitled to such relief under the provisions of the relevant Finance Act, 1965, so far as the order under reference was concerned...... 14.12. Further reference is placed upon another judgment in the case of S.R. Koshti 276 ITR 165 (Guj) in which relief was granted to assessee with following observations: The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is overassessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. [Para 20] 14.13. In the case of CIT vs Lucknow Public Educational Society 318 ITR 223, it was observed by Hon ble Allahabad High Court that the income tax department should not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in we have been called upon to decide about the binding legal force of the opinion expressed by CBDT and MOCA vide their office memorandum/ instructions for determining taxability of the impugned amount. It is admitted fact on record that the assessee company collected PSF-SC in view of the order issued by MOCA vide its order dated 09th May, 2006. The terms of the order have been modified / amended from time to time as per the requirements. One such order issued by MOCA was issued on 20th June, 2007. Subsequently, CBDT issued an Office Memorandum dated 30/06/2008 in pursuance to the request made by the concerned officials of MOCA regarding taxability of PSF SC, wherein it has been observed that since the assessee company was collecting this amount in the course of business and assessee was rendering facilitation and securities services whether in-house or outsourced, therefore, the amount collected by the assessee in the form of PSF-SC was in the nature of income of the assessee and liable to be taxed in its hands. In support of its view, reliance has been placed by the Board on the judgement of Hon ble Supreme Court in the case of Chowringhee Sales Bureau vs CIT 87 ITR 547 (SC) wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, wherein, the amount of sales-tax was received by the said assessee and deposited in its bank account. The funds got mixed in assessee s accounts. Thus, in case of non payment by the said assessee, the same became income of the seller (the said assessee), whereas the facts are totally different in the case before us. The amount here was collected purely in fiduciary capacity and the same was deposited in escrow account on which assessee had no control at all; the assessee had no discretion at all upon its usage. No reasoning has been made out by the CBDT while issuing its opinion as to how the said judgment was applicable on the facts of this case. It is noted by us that aforesaid judgment came up for consideration before many courts wherein its true meaning and scope of its applicability was explained time to time. In one such matter having similar facts as to the assessee before us, Hon ble Allahabad High Court explained correct application of aforesaid judgment in the case of CIT vs. Sita Ram Sri Kishan Das 141 ITR 685 (All). In this case, the facts were that said assessee was a commission agent and was accountable for the recovery (called as Market Fee) which he made from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar receipt nor has it got any power to interfere with the appellate functions of Commissioner (Appeals), which is judicial in nature. Thus, in view of the aforesaid legal scenario coupled with facts of this case as discussed above, we have strong doubts if at all the Board could have issued any instructions to decide the taxability of amount collected by the assessee company on account of PSF SC in a purely fiduciary capacity. This task of determination of taxability has been left by the legislature upon the shoulders of the designated AO, who is obliged under the law to determine the same strictly in accordance with the provisions of the Income-tax Act, 1961. 14.22. Further, aforesaid clarification issued by the Board in this case is actually an Office Memorandum . It is an interdepartmental communication. In our view, Office Memorandum would not carry the legal force of binding effect. Further, it has been provided in section 119 that orders, instructions and directions shall be binding upon the incometax authorities. It is noted that Income-tax Appellate Tribunal does not fall under the list of Income-tax Authorities as has been provided in section 116 of the Act. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng guidance from the aforesaid legal discussion as has been clarified by the Hon ble jurisdictional High Court as well as by Hon ble Supreme Court, it is clear that the Office Memorandum issued by CBDT to MOCA cannot hold an amount as taxable, if the same is otherwise not taxable as per the provisions of the Income-tax Act, 1961. Further, as far as the clarification issued by MOCA is concerned, it is noted that the role of MOCA was confined to issuing Standard Operating Procedures and other guidelines to the airport operators to ensure that funds collected by the assessee company in the fiduciary capacity on behalf of MOCA are properly kept and disbursed for the designated purposes only. It has no jurisdiction to determine the taxability of the impugned amount. It clearly had no jurisdiction in holding the same as taxable and, therefore, to that extent its order / clarification has no authority in the eyes of law and the same has been rightly ignored by the assessee as well as by the appellate courts while determining the taxability of the impugned amount. 14.25. Thus, the aforesaid discussion take us to the third issue wherein we have been called upon to decide whether the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently determine whether the impugned amount could have been characterised as income in the hands of the assessee. Relevant part of order of Ld. CIT(A) is reproduced hereunder, for the sake of ready reference:- I have considered the submissions and arguments of the appellant. It is undisputed that the Ministry of Civil Aviation had already issued its guidelines and instructions to the assessee on 19.01.2009, thereby clarifying the taxability aspect of PSF(SC) in the hands of the assessee notwithstanding the assessee's resistance and belief that such receipts are fiduciary in nature and not taxable. Further, the Ministry of civil Aviation reaffirmed its decision once again vide Instruction dated 15.11.2010. Therefore, the appellant had erroneously resisted from offering the receipts on account of PSF(SC) to tax purely on the basis of its own belief that PSF(SC) receipts are fiduciary in nature, thereby ignoring the mandatory instructions issued by the Ministry of Civil Aviation from time to time under which, the assessee functions as an Airport Operator-the receipts being fiduciary in nature, and the mandatory instructions issued by the Ministry of Civil Aviation from time to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rports have been engaging the attention of the Government for some time. The matter has been deliberated with Airports Authority of India and other airport operators and it has now been decided that: - i. CISF will be deployed as per the assessment of BCAS at airports operated by JVCs or private operators also. ii. Passenger Service Fee (PSF) at airports would he collected by the respective Airport Operator, which could be AM, JVC, or a private operator. iii. The amount of PSF to be collected will he fixed by the Ministry of Civil Aviation. The amount will continue to be Rs.200/- per passenger till further orders. The airport operator would retain Rs.70/- towards passenger facilitation. An Escrow account would be opened whenever the airport operator is a JVC or private operator. This account will be operated by the airport operator (not by AM). Rs.130/- of the PSF collected per passenger by such airport operator would be deposited in the Escrow account by the Airport Operator for payments to be made to CISF. The Escrow account would be subject to Government Audit of CAG. iv. In case any amount remains, this will be transferred to AAI by the airport operator through a proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was subject to the government audit of CAG. Further, in case of any amount was left in the said account, it was to be mandatorily transferred to Airport Authority of India by the airport operator. Thus, from the above said facts and circumstances of the case and terms and conditions it is clear that the said amount was collected by the assessee on behalf of MOCA to be disbursed for security purposes to CISF deployed by the Ministry of Home Affairs. The amount was collected and retained purely in fiduciary capacity. The assessee had no discretion or freedom at all to utilise the aforesaid amount for any other purposes other than the designated purpose of meeting security expenses. So much so, even the surplus left if any, was not at the disposal of the assessee company but was to be mandatorily transferred to the account of Airport Authority of India as per the prescribed procedure. Under these circumstances, it is clear that assessee merely acted as a conduit or a trustee for collection and disposal of the impugned amount of PSF-SC. Under these circumstances, the aforesaid amount could not have been characterised as income u/s 2(24), section 5 or any other provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill have a clause by which the MOCA will have supervening power to direct the Escrow Bank on the issues regarding operation as well as withdrawals from Escrow Account. 3.5 Escrow Account shall be maintained, controlled and operated by Escrow Bank under the Escrow Agreement as under: i) PSF (SC) Account: JVC/Private Operator shall deposit immediately all PSF (SC) collections into the PSF (SC) Account. ii) Withdrawal from PSF (SC) Account: The Escrow Bank shall allow withdrawal by JVC/Private Operators of amounts deposited into the PSF (SC) account only towards the following purposes, in the order of priority by descending under: a. To pay amounts towards taxes, including Income Tax on PSF(SC) income as per provisions of Income Tax Act, 1961, Service Tax or any other statutory does. b. To pay for security related expenses to Central Industrial Security Force (CISF). c. To pay other security related expenses in terms of MOCA order dated 20.6.2007 or any other decision of MOCA/BCAS or any other Government agency, from time to time. iii) Deployment of Surplus: Any surplus standing at the credit of the Escrow Account should be deployed by the Escrow Bank in its own D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessee as his income. Obligations, no doubt, there are in every case, but it is the nature of the obligation which is the decisive fact. There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow. It is the first kind of payment which can truly be excused and not the second. The second payment is merely an obligation to pay another a portion of one's own income, which has been received and is since applied. The first is a case in which the income never reaches the assessee, who even if he were to collect it does so, not as part of his income, but for and on behalf of the person to whom it is payable. 14.38. Subsequently, in many judgments, various courts have, from time to time, analysed the law in this regard and suggested various tests to find out whether in a give facts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the crux of these three principles is to find out whether the assessee had, in substance, earned any income. In other words, these three principles suggest application of the concept of real income , which suggests that unless the income has been earned by a person in real sense, the same cannot be held as taxable income. There has to be first income and only then its taxability could be determined. It is noted by us that in the facts before us, no portion of the amount collected on behalf of AAI / MOCA is reported to have been retained by the assessee as its income in as much as nothing belonged to it. Thus, the impugned amount is clearly not taxable in the hands of the assessee. 14.41. It is further noted by us that in many cases, wherein under some requirement of law if the amounts were transferred to the designated fund, then in such cases the Courts have held it to be a case of diversion of income by overriding title. In a matter before Hon ble Bombay High Court in the case of Somaiya Organo Chemicals Ltd vs CIT 216 ITR 291 (Bom), the facts were that a portion of the sales price was transferred to a separate fund for building up adequate storage facilities under a stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight from the inception, amount of Dharmada was collected and held by the assessee company under an obligation to spend for charitable purposes only, then those amounts were not its trading receipts and was not taxable as business income. 14.44. Before parting with, we have also analysed the facts about utilization of the impugned amount. The Escrow Account maintained by the assessee is simply a pool created by the MOCA through assessee for meeting security expenses. Under these circumstances, if at all any income can be computed, that would be possible only if any surplus arises, which is not possible to happen since entire amount collected by Assessee Company is deposited in Escrow Account which is earmarked wholly and exclusively for meeting security expenses. There is no flexibility for using the funds elsewhere. If at all any amount is left unspent from this account, then, the same is to be transferred to the account of Airport Authority of India for meeting security expenses. We had directed the assessee as well as the Ld. CIT-DR to examine requisite facts and inform us whether there was surplus or deficit in the escrow account finally. The information provided by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 40. The revenue has raised the following grounds of appeal: 1) On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) erred n deleting the disallowance of 25% depreciation on upfront fees of Rs. 150 crore without considering the fact that the assesses has not acquired any absolute rights on the Airport, so as to equate it with a license, but invested the AAI has granted the assessee the right to perform certain functions during the contract period of 30 years and hence the assesses is entitled for deduction only the proportionate amount i.e. l/30lh of Rs. 150 crore. 2(a) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to treat the expenditure incurred towards various expenditure such as realignment of nallah's in forecourt of proposed integrated Terminal, reallocation of CPWD staff and other operational expenditure as revenue expenditure without appreciating that these expenses result in. enduring benefit to the assessee and hence is capital expenditure, 2(b) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fee collected by the assessee company is a capital receipt based on its application for acquisition of capital assets without appreciating the fact that application of receipts does not determine the nature and taxability of the receipts, 4(c) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in relying on the decision of the Hon'ble Supreme Court in the case of Consumer Online Foundation vs.r Union of India Others without appreciating that in that case the issue before the Hon ble Apex Court was whether the assesse company as a lessee of AAI, can collect development fee from the embarking passengers at the Chhatrapati Shiavaji International Airport, Mumbai and the Apex Court did not give a finding regading the nature of receipt in the hands of lessess of the Airports, including the assessee company. 4(d) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that once an amount is held to be in the nature of tax, it cannot be subjected to further tax without appreciating that such amount constitutes construction receipt in the assessee's hands and hence liable to be taxed. 5(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y covered in favour the assessee by the orders of the ITAT, Mumbai B bench in assessee own case for AY 2008-09 ITA No.3232/Mum/2012, where under identical set of facts, the Tribunal held that the assesee is entitled for depreciation @25% as applicable to intangible assets. The Ld. DR, on the other hand, fairly accepted that this issue is covered in favour of the assessee for AY 2008-09 onwards. 43. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that the co-ordinate bench of ITAT, Mumbai B bench had considered an identical issue for AY 2007-08 onwards and after considering relevant facts held that amount paid on account of upfront fees is in the nature of an intangible asset eligible for depreciation @25% as applicable to intangible assets. The relevant findings of the Tribunal are as under;- 7.4. We have gone through the orders of the lower authorities as well as the order of the Tribunal for A.Y. 2007-08 and find that the Tribunal has already decided this issue in favour of the assessee vide its order dated 14-02-2014 with the following observations: We have carefully considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is non-refundable. The assessee has got the privilege under OMDA to collect charges of the nature as mentioned in the agreement entered into i.e. OMDA from the users of Airport premises. We observe that it is not a case where the assessee has got the transfer of a right to enjoy the Airport premises. The assessee only got a license or right to do something at the Airport premises. The Hon'ble Apex Court has held in the case of B. M. Lal (supra) that the transaction is a lease, if it grants the interest in the land and whereas it is a license if it gives a personal privilege with no interest in the land. We are of the considered view that the assessee has got the economic /commercial right under the said agreement to collect charges from the users of the Airport premises which is similar to grant of a license to the assessee. This case is similar to the case of Technoshares and Stocks Ltd and others (supra), wherein the Hon'ble Apex Court has held that a right given to member of Stock-Exchange to carry on the business at the premises of the Stock-Exchange is a business or commercial right which is akin to license in terms of section 32(1)(ii) of the Act, therefore, eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said payment of upfront fee of Rs.150 crores. Thus, Ground No.1 taken by department is rejected. 7.5. Thus, it is noted from the above that the Tribunal has held that the amount paid on account of upfront fee is in the nature of an intangible asset eligible for depreciation and accordingly allowed the claim of depreciation upon the same. The assessee has claimed depreciation in the impugned year on the WDV of the same asset. Therefore, we find that no different decision can be taken in the year under consideration, more so, when no distinction has been made on facts or law, therefore, respectfully following the order of the Tribunal, the claim of depreciation on the upfront fee is allowed. This ground is rejected. 44. In this view of the matter and consistent with view taken by the co-ordinate bench, we are of the considered view that the Ld.CIT(A) was right in deleting additions made by the Ld. AO towards excess depreciation and hence, we are inclined to uphold the findings of the Ld.CIT(A) and reject ground taken by the revenue. 45. The next issue that came up for our consideration from ground No.2(a) and 2(b) of revenue appeal is disallowances of various expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Kedarnath Jute Manufacturing Co. Ltd. vs. CIT (82 ITR 363), that assessee s entitlement to a particular deduction or not, will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can existence or absence of entries in the books of accounts be decisive or conclusive in the matter. We have also gone through the decision of Hon ble Supreme court in the case of Empire Jute Co. Ltd. vs CIT (124 ITR 1) wherein the deductibility or otherwise of an expenditure incurred during the course of business activities was decided by observing as under: There may be cases where expenditure, even if incurred for obtaining an advantage of enduring benefit, may, none the less, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travelling to the international airport were benefited by way of smooth access to the airport. The assessee made one time contribution for the construction of the said road. By this contribution no asset is created by the assessee but in commercial sense, in our opinion, the incurrence of such expenditure certainly facilitates the business of the assessee. This expenditure cannot be held to be capital expenditure merely because the business of the assessee is getting enduring benefit. In our view, the business exigencies demand the assessee to incur this expenditure by making the contribution to MMRDA. 23. We have gone through the judgment of the Hon ble Allahabad High Court in the case of Additional CIT vs. Dhampur Sugar Mill P. Ltd. [2015] 370 ITR 194 (All). We noted that the assessee was engaged in the business of manufacture and sale of sugar, chemicals and power and had a distillery. The assessee made payment of Rs. 8.48 crores to the UPPCL, which was the only customer, for construction of a transmission line and other supporting work for supply of power. When the said expenditure was held as capital expenditure by the Assessing Officer, the Hon ble High Court held as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in acquisition of any capital assets to the trade of the assessee or the property does not become the property of the assessee, it does not result in acquisition of an asset enduring nature by the assessee. Secondly, it is also clearly discernible that if such expenses are incurred for the purpose of the business for deriving any benefit whether to preserve the business or to facilitate the running of the business more smoothly or to make the business more profitable or to secure any other advantage for the assessee s business such expenses are to be treated as having been incurred wholly and exclusively for the business of the assessee and are revenue expenditure. 26. We have also gone through the decision of Hon ble Madras High Court in the case of CIT vs. Coats Viyella India Ltd. [2002] 253 ITR 667 (Mad). We noted that in this case, the Hon ble High Court following the decision of Hon ble Supreme Court in the case of L H Sugar Factory And Oil Mills (P.) Ltd. vs. CIT [1980] 125 ITR 293 (SC), held as under: Held, that, in the present case, the bridge was built by the Government and the assessee did not acquire any ownership over the bridge by paying contribution towards c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground no.4 relates to deletion of the disallowance of Rs. 17,22,24,000/- paid as retrenchment compensation to AAI. Both the parties agreed that identical issue had arisen in the case of the assessee for A.Ys. 2010-11 and 2011-12 and whatever view is taken therein shall be applicable to this year also. We find that the Tribunal vide its order dated 13.11.2017, in the A.Ys 2009-10, 2010-11 and 2011-12 has decided the issue in favour of the assessee, by observing as under: 33. We have heard the rival submissions and have carefully considered the same along with the orders of the authorities below. We noted from the facts on record for A Y 2010-11 that the assessee, under an agreement of OMDA with Airports Authority of India, is developing and maintaining Chhatrapati Shivaji International Airport. The assessee has to carry out operations, maintenance and development of the airport with certain terms conditions. As per clause 6.14 in Chapter 6 of the OMDA, the assessee is obliged to make an offer of employment to a minimum of 60% General Employees at any time during the Operation support period but not later than three months prior to the expiry of the operation support period, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 35DDA will not apply. It is not denied that the expenditure incurred by the assessee is revenue expenditure. We noted that the CIT(A) while dealing with the issue, following the order of his predecessor in the assessee s own case for A.Ys. 2010-11 and 2011-12 deleted the said disallowance. 54. In this view of the matter and consistent with view taken by the co-ordinate bench, we are inclined to uphold the findings of the Ld.CIT(A) and reject ground taken by the revenue. 55. The next issue that came up for our consideration from ground No.4(a) to 4(d) of revenue appeal is development fee collected by the assessee being treated as capital receipts by the Ld.CIT(A) instead of holding it has revenue receipts. The Ld. AO has made additions to the total income of the assesee, in respect of development fees collected from passengers. The said fees was deducted by the assessee from the block of plant and machinery and depreciation had been claimed on reduced amount of block of assets. However, the Ld. AO has treated development fees so collected as business income, since, it was collected and utilized for the purpose of business of the assesee. 56. The Ld. AR for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and the order of the AO. The appellant is engaged in operating, managing, developing, designing, constructing, upgrading, modernizing and financing the Chhatrapati Shivaji International ( CSI ) Airport of Mumbai under an agreement known as OMDA ' with Airport Authority of India ( AAI ). The estimated cost for modernizing and development of CSI Airport of Mumbai was Rs.9,802/- crores. Against this estimated expenditure which includes the substantial expenditure on account of capital expenditure for modernizing and development of the Airport, the availability of finance from various means with the appellant was less by Rs.2,3507- crores. Thus, there was a short fall of Rs.2,350 crores. 9.6 In view of the shortfall of finance required for the development of the Airport which includes substantial capital expenditure, the appellant approached the Ministry of Civil Aviation; Government of India for levy of Development Fee for meeting out the said shortfall at such rates as may be approved by the Ministry. Pursuant to section 22A of the AAI Act, 1994, the Ministry has conveyed the approval of the Central Government u/s.22A of AAI Act authorizing the appellant to collect the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cates that the government had worked out the collection of Rs. 1543 crores in the total gap of Rs.2,350 crores by factoring that MIAL can earn around Rs.1,000 crores through the real estate development program. 9.7 As per clause (b) (ii) of the said letter, the AAI and Central Government would have supervision powers in respect of escrow account to ensure that all the receipts are properly accounted for and are utilized only for permitted purposes. Clause (c) of the said letter provides the entire Development Fee receipts would be utilized only for the purpose of development of Aeronautical Assets , which are Transfer Assets as defined under the OMDA and therefore would go to reduce the actual cost of Aeronautical Assets to that extent. I also notice that Clauses (b) (iii) of the said letter dated 27.02.2009 specifically provides that DF would be subject to AAI's supervision from time to time. Further, Clause (g) of this letter stipulates that the amounts collected through Development Fee would under no circumstances exceed the ceiling of Rs. 1,543 crores and in case of cost escalation beyond Rs. 9,802 crores the escalation would have to be brought in by the appellant thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... really in the nature of a cess or a tax for generating revenue for the specific purposes mentioned in clauses (a), (b) and (c) of Section 22A of AAI Act. Further, the appellant also contended once the SC has held that the Development fee is in the nature of tax or cess, no further tax can be levied on the same treating the same as income of the appellant. I find the reliance of the appellant on the said Supreme Court decision is a good reliance and the same is squarely applicable to the facts of the appellant's case and therefore, Development Fee collected by the appellant is in the nature of cess or tax and a capital receipt and it cannot be subjected to further tax. 9.10 During the appellate proceedings before me, the appellant was asked to clarify as to how Development Fee and Toll Charges are not similar in nature. The appellant made a detailed submission in the matter, clearly bringing out the distinguishing factors between Development Fee and Toll Charges. After a careful perusal of the distinguishing factors between the two, I find that the Development Fee and Toll Charges are being levied and collected entirely on different footings and context. The origin of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he profits and the same is collected after the asset is created and put to use. The Development Fee is collected under the authority of a law meant for utilization of specific purposes and prior to creation of assets. The appellant's hands are completely tied in utilizing the Development Fee whereas the same is not the case of Toll Charges. Thus, the distinguishing factors clearly place the Development Fee in the category of capital receipts and not revenue receipts. 9.13 Looking to the facts of the case in its entirety, I find that Development Fee collected by the appellant with the permission from the Ministry of Civil Aviation, Government of India under the provisions of 22A of AAI Act 2004 is a receipt in the nature of cess or tax and in the nature of capita! receipt. Further, the same has been already considered by the Hon'ble Supreme Court in the case of Consumer Online Foundation Vs Union of India others, cited supra, wherein it has been held the Development Fee is a receipt in the nature of cess or tax for generating revenue for the specific 'purposes mentioned in clause (a),(b) (c) of section 22A of the AAI Act. Further, it is pertinent to note once amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Airports Authority. The learned DR, even though relied on the order of the Assessing Officer, he did not deny the interpretation given by the Hon ble Supreme Court in respect of section 22A of the Airports Authority of India Act. It is not denied that the development fees so collected are utilized only for the purpose of aeronautical assets as per the provisions of section 22A of the Airports Authority of India Act. In view of this fact, we do not find any illegality or infirmity in the order of the CIT(A), which warrant our interference, while holding that the development fees so received by the assessee is a capital receipt. We accordingly, confirm the order of the CIT(A) and dismiss ground nos.10 11 in A.Y. 2010-11 and ground no.5 in A.Y. 2011-12. This disposes of all the grounds in the revenue s appeal for A.Y. 2010-11. We noted that the CIT(A) while dealing with the issue, following the order of his predecessor in the assessee s own case for A.Ys. 2010-11 and 2011-12, decided the issue in favour of the assessee. 59. In this view of the matter and consistent with view taken by the co-ordinate bench, we are inclined to uphold, the findings of the Ld.CIT(A) and reject gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(va) r.w.s. 43B of the I.T.Act, 1961. The Ld. AO had disallowed belated remittances of employees contribution to ESIC, on the basis of inputs given in tax audit report by relying on the provision of section 2(24) (x) r.w.s. 36(1)(va) fo the Act. The Ld.CIT(A), by following the decision of Jurisdictional High Court of in the case of Hindustan Organics Ltd. 48 taxmann.com 42 and Ghatge Patil Transports Ltd. 368 ITR 749, deleted the additions made by the Ld. AO. 64. The Ld. AR for the assessee submitted that this issue is also covered in favour of the assessee by the decision of Hon ble Jurisdictional high Court, in the case of Ghatge Patil Transports Ltd.(supra), where it was held that if, payments have been made on or before due date of filing return of income, then the same cannot be disallowed u/s 36(1) (va) r.w.s. 43B of the I.T.Act, 1961. 65. The Ld. DR, on the other hand fairly accepted that this issue is covered in favour of the assessee. 66. We have head both the parties, perused the material available on record and gone through orders of the authorities below. It is an admitted fact that the assesee had remitted employees contribution to ESIC before filing the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are as under:- 9. Ground no.7 in revenue s appeal relates to the rate of depreciation allowed on taxiways, aprons, parking bays and bridges @15% instead of 10%. We find that the CIT(A), while allowing depreciation @15% on taxiways, aprons, parking bays and bridges, has followed the decision of the Tribunal in assessee s own case for A.Y. 2007-08 in ITA No. 7111/Mum/2011, wherein it has observed as under: 35. We have carefully considered the orders of authorities below and submissions of ld. Representatives of the parties. There is no dispute to the facts that runway, taxiway are necessary part of Airport operation and are specific part of infrastructure for use of aircrafts. These are not merely concrete structures. The Hon ble Bombay High Court in the case of CIT V/s Mazagaon Dock Ltd (1991) 191 ITR 460(Bom) has held that dry dock and wet dock created for ships are to be treated as plant and not building. The Hon ble Apex Court has held in the case of Karnataka Power Corpn. (supra) that power generating station building is not a simply concrete structure but a specially designed building and is to be treated as part of plant. Similarly, the Hon ble Apex Court has held in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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