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Pr. Commissioner of Income Tax - 3, New Delhi Versus Delhi Airport Metro Express Pvt. Ltd.

2017 (9) TMI 529 - DELHI HIGH COURT

Revision u/s 263 - entitlement to claim depreciation u/s 32 - whether order of the AO is erroneous and prejudicial to the interests of the Revenue? - The case of the Revenue is that the assets were developed under the BOT scheme and the Assessee was not eligible to claim depreciation as it was not the owner of the assets. - Held that:- In the context of the present case if, as urged by the Revenue, the Assessee has wrongly claimed depreciation on assets like land and building, it was incumbent u .....

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ng the entire matter back to the AO for a fresh assessment. That option, in the considered view of the Court, can be exercised only after the PCIT undertakes an inquiry himself in the manner indicated hereinbefore. That is missing in the present case. - Therefore, the Court is of the view that the ITAT was not in error in setting aside the impugned order of the PCIT under Section 263 of the Act. - Decided against revenue - ITA No. 705/2017 - Dated:- 5-9-2017 - S. Muralidhar And Prathiba M. S .....

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ion 263 of the Income Tax Act, 1961 ( Act ) setting aside the original assessment order dated 31st December 2013 passed by the Assessing Officer ( AO ) under Section 143 (3) of the Act. 3. The background facts are that the Assessee is a Concessionaire of the Airport Metro Express Project of the Delhi Metro Rail Corporation Ltd. ( DMRC ) under a Build-Operate-Transfer ( BOT ) Scheme. The Assessee had accepted the concession for a period of 30 years. During the AY in question, the Assessee claimed .....

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hout actual transfer of ownership. The design and construction of the basic structure was also done by the DMRC. 5. The case of the Assessee, on the other hand, is that during the AY in question it had purchased and installed plant and machinery and such plant and machinery was legally owned by it. It is further contended that since such assets were used for the purposes of Assessee s business, it was entitled to claim depreciation under Section 32 of the Act. 6. It appears that during the origi .....

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r a period of 30 years, the amount to be amortized would only be ₹ 52,01,60,572/- for each year. Therefore, the depreciation allowed to the Assessee was in excess by ₹ 60,28,13,875 and, to that extent, the order passed by the AO was prejudicial to the interest of the Revenue. In reply to the SCN, the Assessee took the stand that, during the AY in question, it had purchased the assets from independent vendors, out of its own funds for setting up the project. 8. Thereafter the impugned .....

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owed on such infrastructure under provisions of the Act . The case of the Assessee was that such a Circular could not dictate to the AO how he should frame his assessment and, to the extent the Circular was prejudicial to the Assessee, its application would be beyond the scope and ambit of the powers conferred on the Board under Section 119 of the Act. 9. It is seen, in the order dated 30th March 2016, the PCIT has proceeded by setting out the contents of the SCN and the contents of the reply gi .....

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