TMI Blog2014 (1) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... er spending money - it is wrong to say that right acquired by the assessee was without incurrence of any cost. It is quite evident that assessee got the right to collect toll for the specified period only after incurring expenditure through its own resources on development, construction and maintenance of the infrastructure facility - section 32(1)(ii) permits allowance of depreciation on assets specified being ‘intangible assets’ which are wholly or partly owned by the assessee and used for the purposes of its business - The condition is fully satisfied by the assessee - the assessee was eligible for depreciation on the ‘Right to collect Toll’, being an ‘intangible asset’ falling within the purview of section 32(1)(ii) of the Act – Deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucture facility (Dewas By-pass Road) on Build, Operate and Transfer(BOT) basis. For the A.Y. 2006-07, the assessee company filed a return of income declaring a loss of Rs.9,24,33,233/- under the normal provisions of the Act, while it paid the Minimum Alternate Tax (MAT) u/s.115JB of the Act. In the assessment proceedings, the Assessing Officer noticed that assessee had claimed depreciation @ 25% on License to collect Toll amounting to Rs.11,44,86,734/-, which is the subject-matter of dispute before us. 4. The assessee was awarded an infrastructure work of development, operation and maintenance of infrastructure project of Dewas By-pass Road in the State of Madhya Pradesh on BOT basis. In terms of the agreement with the Government of Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Right to collect Toll was neither a license nor a valuable commercial or business right covered in the expression intangible asset for the purposes of section 32(1)(ii) of the Act. Accordingly, he has disallowed the claim of depreciation of Rs.11,44,86,734/- on the amount capitalised under the head License to collect Toll . However, after disallowing the depreciation of Rs.11,44,86,734/-, the Assessing Officer permitted deduction of Rs.5,38,75,193/- being the proportionate actual cost incurred on development and construction of the road spread over on a pro-rata basis over the entire toll collection period from 25.04.2004 to 06.05.2015. Against the aforesaid denial of depreciation, assessee went in appeal before the CIT(A). 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal:- (i) Ashoka Buildcon Ltd. in ITA.No.1302/PN/09 dated 20.03.2012. (ii) M/s.Kalyan Toll Infrastructure Ltd. in ITA.Nos.201 247/Ind/2008 dated 14.12.2010. (iii) Dimension Construction Pvt. Ltd. in ITA.No.222, 223, 233 857/PN/2009 dated 18.03.2011. (iv) Ashoka Info (P) Ltd. (supra) (v) Reliance Ports and Terminals Ltd. (supra). 8. The Ld. CIT(DR) appearing for the Revenue, has submitted that the intangible assets eligible for depreciation in section 32(1)(ii) of the Act, are only those which are owned by the assessee and have been acquired after spending money. In the case of the assessee, by way of an agreement, assessee was awarded a work to construct a road by using own funds and the expenditure incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee out of its own funds. Moreover, after the end of the specified period, assessee was to transfer the said infrastructure facility to the Government of Madhya Pradesh free of charge. In consideration of developing, constructing, maintaining the facility for a specified period and thereafter transferring it to the Government of Madhya Pradesh free of charge, assessee was granted a Right to collect Toll from the motorists using the said infrastructure facility during the specified period. The said Right to collect the Toll is emerging as a result of the costs incurred by the assessee on development, construction and maintenance of the infrastructure facility. Such a right has been adjudicated by the Tribunal in the aforesaid precedents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the aforesaid perspective we find no justification for the plea raised by the Revenue before us. 12. In the result, we affirm the order of the CIT(A) in holding that the assessee was eligible for depreciation on the Right to collect Toll , being an intangible asset falling within the purview of section 32(1)(ii) of the Act following the aforesaid precedents. 13. In the result, appeal of the Revenue is ITA No. 185/PN/2012 is dismissed. 14. Since it was a common point between the parties that the facts and circumstances in the other appeal for assessment year 2007-08 stand on an identical footing to the appeal for assessment year 2006-07, which we have considered in the earlier paragraphs, hence following our decision in the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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