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2021 (1) TMI 228 - AT - Income TaxDepreciation on the expenditure incurred for construction of Amritsar Bus Terminal project on build, operate and transfer (BOT) basis - According to the AO, the assessee claimed depreciation on project costs at ₹ 2,50,16,203/- in the books of account but claimed depreciation @ 25% at ₹ 4,66,91,811/- in the computation - AO allowed amortization of whole expenses over the life of such asset and restricted the deprecation - HELD THAT:- We note that the assessee incurred expenditure in constructing Amritsar Bus Terminal on BOT basis and to recoup the said investment, the assessee was allowed to collect adda fees from the users of the said bus terminal. In our view, the said right is business or commercial right in terms of section 32(1)(ii) of the Act, is an intangible asset, therefore, the assessee is entitled to claim depreciation. We find that the facts and circumstances of the case made out in the case of Progressive Construction Ltd. [2017 (3) TMI 1167 - ITAT HYDERABAD] are identical and the issue decided therein is similar to the issue on hand before us. Therefore, the assessee is eligible to get depreciation u/s. 32(1)(ii) of the Act. We hold that the assessee is entitled to claim deprecation as per specified rate at 25% and the order of CIT(A) is justified. It is observed that the AO, while denying the claim of depreciation, allowed deduction towards amortization of expenses relatable to money spent for construction of infrastructure facilities, i.e. bus terminal. Once the claim of the assessee towards depreciation allowance is accepted, the deduction allowed by the AO towards allocated cost of project, naturally needs to be withdrawn. The AO is directed to recalculate the depreciation in terms indicated above and add back the allocated cost of project as allowed by him as deduction in the assessment order - Decided against revenue.
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