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2017 (11) TMI 1600 - AT - Income TaxDisallowance of 25% of depreciation on upfront fees - Held that:- As decided in assessee's own case for A.Y. 2007-08 that CIT(A) has rightly held that the payment of upfront fee of ₹ 150 crores paid by assessee to “AAI” has created capital assets in the form of license to develop and modernize the Airport and collect charges as per terms and conditions as prescribed under the agreement entered into which is an “intangible assets” to the assessee. Thus assessee is entitled for depreciation at the rate of 25% on the said payment of upfront fee. Nature of expenses - expenses incurred towards realignment of nallah's in forecourt of proposed integrated Terminal, reallocation of CPWD staff and other operational expenditure - revenue or capital - Held that:- As decided in case of the assessee for A.Ys. 2009-10, 2010-11 and 2011-12 nothing has been discussed about the nature of the expenses, position of crystallisation of these expenses, availability of particulars of the payees, etc. It has been observed in the order by Ld. CIT(A) that whenever payments are actually made against these provisions, TDS is deducted as was stated by the Ld. Counsel. But, what are the precise facts in this regard has not been discussed in the order. No details are available or discussed by the Ld.CIT(A) regarding various aspects, e.g. when these expenses were actually incurred, in whose name these are finally credited, who are the actual payees, when the payments were made actually and whether the TDS was deducted at the time of making of payments or not? Nothing has been brought out on record to ensure that finally there was no revenue leakage and full compliance of the TDS provisions was made ultimately. We find that order of Ld. CIT(A) is devoid of any factual narration and, therefore, we find it appropriate to send this issue back to the file of the CIT(A) for complete factual analysis. Disallowance as retrenchment compensation paid to AAI - Held that:- Following the order of his predecessor in the assessee’s own case for A.Ys. 2010-11 and 2011-12 wherein noted that the said provision is applicable only if the assessee has incurred any expenditure in any previous year by way of payment of any sum to a employee in connection with voluntary retirement. In this case, we noted that the assessee has not incurred any expenditure by way of payment made to employees but the payment has been made by the assessee to Airports Authority of India in accordance with clause 6.14 of the OMDA on account of retrenchment compensation to be paid by Airports Authority of India to its employees. It is not an amount which the assessee is paying to its employees on their retrenchment. Therefore, the provisions of section 35DDA will not apply. It is not denied that the expenditure incurred by the assessee is revenue expenditure. Nature of receipt - treatment of development - revenue or capital receipt - Held that:- 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. Rate of depreciation allowed on taxiways, aprons, parking bays and bridges @15% instead of 10% - Held that:- Tribunal we have allowed the assessee depreciation @15% for A.Ys. 2009-10, 2010-11 and 2011-12 also. Facts and circumstances being similar and respectfully following the order of the Tribunal in the assessee’s own case, which has been relied upon by the CIT(A), we see no reason to interfere with the impugned order. We uphold the same and dismiss the ground raised by the Revenue.
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