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2013 (9) TMI 397 - AT - Income TaxNature of receipt - whether transfer of right or transfer of asset - Capital gain on transfer of bridge named ‘Yanam Project' to subsidiary company - Ownership - bridge was created under PPP mode under BOT scheme - Whether there is transfer of asset in the transaction of transfer of BOT from the Assessee to its 100% subsidiary – Held that:- BOT asset is figuring in the Balance Sheet at net cost price and the depreciation was being allowed to the assessee consequent to the orders of the CIT(A) and ITAT. Therefore, the issue that there is no capital asset in the books of the assessee cannot be accepted, as the very same Assessing Officer, who has completed the assessment under S.153A has considered the issue and rejected claim of depreciation in all these years on the very same asset, which is purportedly under the ownership of the Government of Andhra Pradesh. Therefore, consequent to the orders of the CIT(A) and ITAT, the assessee was allowed depreciation on the very same BOT asset. Therefore, the finding of the Commissioner of Income-tax that there is no capital asset to be transferred cannot be accepted – Decided in favor of Assessee. Since, we have already considered the ownership of the asset and arrived at the conclusion that there is a capital asst, which is validly transferred to a 100% subsidiary company, there is no need to discuss the provisions of S.23 to 25 and S.65 of the Indian Contracts Act, to consider whether the agreement is void or not. In any case, an agreement does not become void only because one of the parties assigned part of the rights to its 100% subsidiary, since this is authorized by the agreement itself, Applicability of provisions of section 47(iv) of the Income Tax Act – Held that:- Assessee has right to collect toll and other fee and to develop way side facilities like advertisements, hoardings, etc. to generate revenue and also entitled to create additional structural facility to cater for the pipelines for oil, gas and water and at that time, they were envisaging establishing a pipeline for ONGC for transportation of gas by utilsiing this facility - Amount of toll collection is being assessed in the hands of GTBPL and the Commissioner has not considered the agreement as void and the toll collected thereon was not assessed in the hands of the assessee at all - There is a valid transfer to the 100% subsidiary company and since the provisions of S.47(iv) are directly applicable, this assignment can not be considered as ‘transfer' for the purpose of capital gains – Decided in favor of Assessee.
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