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2014 (11) TMI 401 - AT - Income TaxAllowability of depreciation on roads/bridges constructed by assessee as part of National High-ways project – Held that:- Depreciation cannot be allowed and relied on the Board circular No.9 of 2014 dated 23.04.2014 - the Board is aware that there were disputes as to whether the expenditure incurred on development and construction of infrastructural facilities like roads/high ways on BOT basis with right to collect toll, is entitled for deduction under section 32(1)(ii) or the same can be amortized by treating it as an allowable business expenditure under relevant provisions of the I.T. Act - The Circular went on to clarify that the amount can be amortized over the period of toll construction concessionaire agreement - the Board in fact has accepted that the cost incurred towards development of road/highways is revenue expenditure and relying upon Madras Industrial Investment Corporation Ltd., vs. CIT [1997 (4) TMI 5 - SUPREME Court] allowed spreading over the liabilities over number of years - Since the amount is allowable as an expenditure that too as revenue expenditure, the Board circular is in fact advantageous to the assessee who are in development of infrastructure facilities but not owning the property which was constructed - assessee has initially treated the entire cost as building and claimed 10% depreciation in A.Y. 2009-10 - Since the CIT(A) allowed depreciation as claimed by assessee there is no reason to interfere with the order of CIT(A) as the entire cost incurred on the project is to be allowed as deduction to assessee either as amortized revenue expenditure or as depreciation – Decided against Revenue.
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