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2022 (1) TMI 530 - ITAT CHENNAIReopening of assessment u/s 147 - Notice beyond four years - allowability of depreciation on the Bridge @ 25% as applicable to Plant and Machinery - AO restricted the claim of depreciation on the bridge to 10% and the remaining 15% claim has been disallowed and brought to tax - HELD THAT:- Assessee is only a contractor and is not owner of the bridge and therefore, the assessee is not entitled to claim depreciation. AO came to the above conclusion on the ground that these facts were not disclosed at the time of original assessment and the above information was gathered from the note filed by the assessee's holding company i.e., East Coast Construction and Industries Ltd. and therefore, there is an escapement of income to the extent of depreciation allowed by the Assessing Officer at 10% on the basis of claim made by the assessee as if the assessee is the owner of the bridge for claiming the depreciation. AO has reopened the assessment under section 147 of the Act by issuing notice under section 148 of the Act on the ground that there is failure on the part of the assessee to disclose fully and truly all the material facts to complete the assessment. As gone through the reasons recorded by the Assessing Officer and also considered the entire facts of the case find that there is a failure on the part of the assessee to disclose all the information before the Assessing Officer and therefore, the Assessing Officer has reopened the assessment by issuing notice under section 148 of the Act dated 18.03.2010, which is beyond four years, in our opinion, the reopening of assessment is valid and it is in accordance with law. Thus, the ground of appeal raised by the assessee is dismissed. Depreciation on the Bridge - The assessee could not controvert the fact that the assessee is only a contractor and not owner of the bridge and thereby, the assessee is not entitled to claim depreciation. Secondly, the claim of depreciation on the expenditure incurred on development and construction of infrastructural facilities including bridges on BOT basis with right to collect toll has been clarified by the CBDT that the assessee do not hold any right in a BOT project except recovery of toll free to recoup the expenditure incurred and therefore, the assessee cannot be treated as the "owners" of the property and cannot be allowed depreciation under section 32(1)(ii) of the Act. By considering the above notification of the CBDT, considering all the facts and provisions of the Act, we find that the ld. CIT(A) has rightly directed the Assessing Officer to allow amortization of the expenditure incurred during the tenure of the agreement and thus, no interference is called for in the order passed by the ld. CIT(A). Thus, the ground raised by the assessee stands dismissed.
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