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2021 (1) TMI 1119 - AT - Income TaxDepreciation u/s 32(1)(ii) in respect of its “right to collect toll” - whether or not the assessee’s claim for depreciation on “license to collect toll”, an intangible asset, falls within the scope of Sec.32(1)(ii) ? - assessee’s stand qua its claim is that it has been holding the concessionare rights in the nature of license to collect road toll of an intangible asset u/s 32(1) - HELD THAT:- We are of the considered view that the issue as to whether an Infrastructure Development company that had constructed a road on build, operate and transfer (BOT) basis on the land owned by the Central Government would be eligible for claim of depreciation in respect of its intangible rights i.e “right to collect toll” under Sec. 32(1)(ii) - See Progressive Construction Ltd. [2017 (3) TMI 1167 - ITAT HYDERABAD] There does not appear to be any dispute about the fact that the Assessing Officer’s assessment order; take for instance, the order dated 30th December, 2017 has not controverted the assessee’s plea that Clause 3.1 of the concession agreement has resulted in the NHAI granting concessionary rights to reconstruct, operate and maintain the corresponding national highway project. We wish to repeat here that the Assessing Officer has only quoted the Board’s Circular No.9/2014 dated 23rd April, 2014 in favour of amortization by following matching concept only. We observe in these factual backdrop that Revenue’s arguments supporting the impugned disallowance are not sustainable.We make it clear that assessee’s stand qua its claim is that it has been holding the concessionare rights in the nature of license to collect road toll of an intangible asset u/s 32(1) Coming to the exclusive usage part; we see no material on record which would indicate that anybody other than the assessee is entitled to dilute its rights to construct, operate, maintain the project in lieu of the toll collections right for the specified agreement period. We therefore hold that the assessee’s right to collect toll would form an exclusive right in the nature of license eligible to be treated as an intangible asset as per Special Bench’s decision (supra).We thus decline the Revenue’s arguments supporting the impugned depreciation disallowance - Decided in favour of assessee.
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