TMI Blog2018 (10) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... eating the interest income under the head of “income from other sources. - Decided in favour of assessee. - ITA No.3668/Mum/2016 And ITA No. 4327/Mum/2016 - - - Dated:- 24-9-2018 - SHRI R.C. SHARMA, AM AND SHRI RAM LAL NEGI, JM For The Assessee : Shri D.V. Lakhani For The Revenue : Shri Ajit Srivastava ORDER PER R.C.SHARMA (A.M): ITA No.3668/Mum/2016 This is an appeal filed by the assessee against the order of CIT(A)-22, Mumbai dated 09/03/2016 for A.Y.2011-12 in the matter of order passed u/s.143(3) of the IT Act. 2. In this appeal, assessee is basically aggrieved for disallowance of claim of depreciation on toll road u/s.32 of the IT Act by treating the same as plant and machinery. 3. We have considered rival contentions and found that issue under consideration is covered by the order of the Tribunal in assessee s own case for the A.Y.2009-10 dated 15/04/2015 and also by the order for A.Y.2010-11 dated 26/05/2017. The precise observation of the Tribunal order dated 15/04/2015 for the A.Y.2009-10 is as under:- 26. As per section 32(1)(ii) depreciation is allowable on intangible assets like licenses, franchises or any other bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of convenience is reproduced as under: 6. At the time of hearing, it was a common point between the parties that an identical issue has been considered by the Pune Bench of the Tribunal in the case of Ashoka Infraways Pvt. Ltd. vs. ACIT vide ITA Nos. 185 186/PN/2012 dated 29.04.2013. As per the Tribunal following the precedents by way of various decisions of different Benches of the Tribunal mentioned therein, the claim of the assessee for treating the 'License to collect Toll' as an intangible asset eligible for the claim of depreciation @ 25% as per Section 32(1)(ii) of the Act was justified. The following discussion in the order of the Tribunal dated 29.04.2013 (supra) is relevant :- 7. Before us, it was a common point between the parties that the impugned issue has been adjudicated in favour of the assessee in the following decisions of the Tribunal:- 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 1TA.No.222, 223, 233 857/PN/2009 dated 18.03.2011. iv)Ashoka Info (P) Ltd. (supra) v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 to be in the nature of 'intangible asset' falling within the purview of section 32(1)(i/) of the Act and has been found eligible for claim of depreciation. No decision to the contrary has been cited by the Ld. DR before us and, therefore, we find no reasons to depart from the accepted position based on the aforesaid decisions. 11. So however, the plea of the Ld. DR before us is to the effect that the impugned right is not of the nature referred to in section 32(1)(ii) of the Act for the reason that the agreement with the Government of Madhya Pradesh only allowed the assessee to recover the costs incurred for constructing the road facility whereas section 32(1)(i1) of the Act required that the assets mentioned therein should be acquired by the assessee after spending money. The said argument in our view is factually and legally misplaced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court, even the assessee is not the owner of the toll road. The assessee has been given only the right to develop, maintain and operate the toll road and further to collect the toll for the specified period. This right as discussed above is an intangible asset falling under section 32(1)(ii) of the Act. 31. So far as the contention of the Revenue that the investment made by the assessee be treated as a revenue expenditure and be amortized for the period of the agreement, is concerned, we do not find any force in the same on the ground that not only the AO but also the CBDT in the circular (supra) as discussed above has admitted that the license of right to collect toll free has been given to the assessee in lieu of the investments made and that such a right brings to the assessee an enduring benefit. The investments made under such circumstances cannot be said to be of revenue in nature but, as discussed above, are of capital in nature. The assessee, thus, is entitled to claim depreciation on such type of capital asset. 4. As the facts and circumstances during the year under consideration is parimateria, respectfully following the order of the Tribunal in assessee s ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness. The interest income was held to be assessable as business income and not as income from other sources. In the case under consideration also the business receipts were deposited into bank and therefore, following the decision of Hon'ble Mumbai High Court in the case of Lok Holdings, the interest income was assessable as business income. The A.O. is directed to assess the same as business income. This ground of appeal is allowed. This issue was also there in A.Y.2008-09 wherein by following the appeal order of A.Y.2007-08, the undersigned directed the A.O. to consider the interest income under the head income from business or profession. The facts of the year under consideration are same that the appellant had earned interest income of ₹ 1,32,17,891/- on deployment of business receipts in the fixed deposits and had also earned interest of ₹ 2,76,011/- on bank guarantee. Following the appeal order of earlier years, the A.O. is directed to assess interest income under the head income from business and profession. This ground of appeal is allowed. 4.1 Aggrieved by the order of the Ld. CIT(A), the Revenue has come in appeal on this issue before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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