TMI Blog2013 (9) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to interfere with his order - Decided against Revenue. - - - - - Dated:- 24-9-2012 - Order The order of the Bench was delivered byA. Mohan Alankamony (Accountant Member).-These cross-appeals and the cross-objections are filed by the Revenue and the assessee aggrieved by different orders of the learned Commissioner of Income-tax (Appeals), Gandhinagar in appeal No. CIT(A)GNR/260/2008-09 dated January 12, 2010 for the assessment year 2002-03 and No. CIT(A)/GNR/ 203/2010-11, dated January 9, 2012 for the assessment year 2005-06 and passed under sections 250 and 143(3) read with section 147 of the Income tax Act. All these cross-appeals along with the cross objections were heard together and the same are being disposed of by this common order for the sake of convenience: I. T. A. No. 1169/Ahd/2010 (Revenue's appeal for the assessment year 2002-03) The Revenue has raised two effective grounds of appeal which are reproduced hereinbelow: "1. The learned Commissioner of Income-tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 5,26,43,488 made on account of interest on deep discount bond. 2. The learned Commissioner of Income-tax (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee under section 43B of the Act and added the sum of Rs. 5,26,43,488 to the income of the assessee. The assessee carried the matter before the learned Commissioner of Income-tax (Appeals) on both these issues. The learned Commissioner of Income-tax (Appeals) considering the facts of the case and the submissions of the assessee allowed both issues in favour of the assessee by observing as under in paragraphs 3.2, 4.4 and 4.5 of his order: Deleting the addition of Rs. 5,26,43,488 made on account of interest on deep discount bond. "3.2 This issue has come up in other years as well, when the additions made by the Assessing Officer has been confirmed by the Commissioner of Income-tax (Appeals). However, the Income-tax Appellate Tribunal, Ahmedabad has meanwhile delivered its decision for the assessment year 2003-04. The appellant has filed a copy of the decision dated May 15, 2009 in I. T. A. No. 2901/Ahd/2006, wherein it has been held that the disallowance is not correct. Since the facts of the case are exactly similar, therefore, the disallowance of Rs. 5,26,43,488 made by the Assessing Officer is deleted." Deleting the addition of Rs. 14,67,03,030 made on account of depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asst. CIT [2010] 1 ITR (Trib) 146 (Ahd) for the assessment year 2003-04 the Tribunal vide its order dated May 15, 2009 had examined the matter with regard to deep discount bonds and arrived at the following conclusion in page 155 of the order: "In the instant case, the interest is payable in respect of amounts deposited by financial institutions with the assessee by subscribing to the bonds issued by the assessee. The interest is payable in respect of certain deposits received by the assessee and not in respect of any loans, advances or borrowings made by the assessee. For the same reason, clause (e) of section 43B relating to loans and advances from a scheduled bank is also not applicable in the instant case. In the above circumstances, in our considered view, neither was the Assessing Officer justified in disallowing the deduction claimed for the provision made in respect of interest accrued but not due on the deep discount bonds issued by the assessee nor was the learned Commissioner of Income-tax (Appeals) justified in confirming such disallowance. It is observed that the amount of the provision made by the assessee in respect of interest accrued on bonds is not in dispute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative building, toll plazas on both ends of road, from whereby the toll is collected by the staff from the passing vehicles. We further find from the facts that the road constructed by the assessee forms the most important source of its revenue and the basic objective is to construct the toll road under the B.O.O.T scheme. Thus, the assessee has fulfilled the basic criteria for claiming depreciation, i.e., existence of a capital asset, ownership of such asset and most important that the assessee were put to use for its business purpose. We find that learned counsel for the assessee has made a fine distinction in the facts of the present case with that of Indore Municipal Corporation [2001] 247 ITR 803 by stating the fact that IMC was a local body which derived income from sale of manure prepared out of waste and night soil dumped in the trenching grounds outside the municipal limits and it constructed a metal road over the trenching ground and claimed that the said expenditure should be treated as road and claimed depreciation. The hon'ble Madhya Pradesh High Court held that the metal road for hauling compost could not be considered as expenditure and the assessee was not enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such dominion over the property as would enable others being excluded therefrom and having the right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner of the building though a formal deed of title may not have been executed and registered as contemplated by the Transfer of Property Act, 1882, the Registration Act, etc. In the present case neither the Commissioner of Income-tax in the revision order under section 263 of the Act or by the Assessing Officer while framing original assessment has raised this issue, but learned counsel for the assessee categorically stated that this toll road was constructed on B.O.O.T basis, i.e., means 'build', 'own', 'operate' and 'transfer'. According to him, the entire responsibility for maintaining and operating this toll road for 31 years is on the assessee as he has to collect toll-fee. Once this concept of B.O.O.T has been accepted by the Government of India under infrastructure policy and the Government of Gujarat also entered in a joint venture with the assessee and formed the SPV, the question of ownership rest with the assessee for the purposes of claim of depreciation. Accordingly, this issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... road overlay/renewal : It was observed by the learned Assessing Officer that a sum of Rs. 1,61,37,960 was debited to the profit and loss account. When the details were called for the assessee explained it to be provision made on a scientific basis for expenditure to be incurred in due course. Therefore, the learned Assessing Officer disallowed this claim of provision for expenditure made by the assessee. The learned Commissioner of Income-tax (Appeals) also arrived at fair conclusion that the entire expense of Rs. 1,61,37,960 claimed by the assessee is not an expenditure incurred by the assessee but a provision made in the books of account and accordingly confirmed the order of the learned Assessing Officer. After hearing both the sides and perusing the materials on record, it is evident that the entire expenses of Rs. 1,61,37,960 claimed by the assessee is only a provision made in the books of account and do not pertain to actual expenses incurred by the assessee during the year. Therefore, we also do not have any hesitation to confirm the orders of the Revenue authorities. This ground of appeal of the assessee is accordingly dismissed. I. T. A. No. 892/Ahd/2012 (Revenue's appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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