TMI Blog2018 (12) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has developed falls under item (3) because no machinery and plant can be installed on the road. Since the road which the assessee has developed does not fall under item (1) and item (3) then it has to fall under the residual item under (2) which provides for 10% depreciation and, therefore, the AO has rightly granted 10% depreciation for the roads developed by the assessee which action we uphold - we direct the AO to allow the assessee’s claim for 100% depreciation on water supply system and AO’s order allowing only 10% depreciation of roads is upheld. - Appeals of assessee and revenue are partly allowed. - I.T.A. Nos. 535 to 537/Kol/2017 & I.T.A. Nos. 2353 And 2354/Kol/2017 - - - Dated:- 19-12-2018 - Shri P.M. Jagtap, AM And Shri A. T. Varkey, JM For The Assessee : Shri S. L. Kochar Anil Kochar, Advocates For The Revenue : Md. Usman, CIT, DR ORDER Per Shri A. T. Varkey, JM All the three appeals i. e. ITA Nos. 535 to 537/Kol/2017 are filed by the assessee against the order of Ld. CIT(A)-7, Kolkata dated 11. 01. 2017 for AYs. 2008-09 to 2010-11 and the ITA Nos. 2353 2354/Kol/2017 are filed by the revenue against the order of Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory authority under the Govt. of West Bengal. It was constituted under the West Bengal Town Country (Planning Development) Act, 1979 and was established in the year 1980. It has brought to our notice that the HDA discharges its function through the Chief Executive Officer (CEO) and it implements the decision of the Board which has been constituted by the Notification of the State Govt. and manages finances as per the financial norms of the Govt. It was brought to our notice that the HDA discharges various responsibilities and activities in the field of planning, land acquisition and allotment, engineering and bridge finance, estate, establishment, social welfare, public relations and information. In the year under consideration, the AO noted that the assessee has claimed depreciation of ₹ 27,28,49,910/- on water supply scheme which the AO did not agree and only allowed 10% of depreciation. Likewise, the assessee has claimed depreciation of ₹ 7,42,47,049/- on road and claimed 100% depreciation which was also not accepted by the AO and allowed only 10%, thus disallowed a total amount of ₹ 31,70,43,691/-. On appeal, the Ld. CIT(A) has granted relief by takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation for both water supply scheme and road, the revenue has preferred this appeal before us. 5. Before us, the Ld. CIT, DR assailing the decision of the Ld. CIT(A) contended that there was total non-application of mind by the Ld. CIT(A) as well as the AO while preparing the remand report and drew our attention to the impugned order of the Ld. CIT(A) which is cryptic in nature and that the Ld. CIT(A) has simply relied on the remand report and allowed the claim of the assessee, which according to ld CIT DR is erroneous. On the other hand, the Ld. AR justified the claim of the assessee and contended that the remand report of the AO as well as the impugned order of the Ld. CIT(A) is in accordance to law and does not require any interference from our part. We note that the dispute is regarding the validity of claim of depreciation made by assessee on the water supply scheme and road. In order to appreciate the rival contentions involved in the lis , we would like to reproduce the provisions of law which is required to be looked into for solving this lis. The table of rates at which depreciation is admissible is found in New Appendix I which is effective from AY 2006-07 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-IA of Income Tax Act, 1961 Section 80-IA Deduction in respect of profits and gains from Industrial undertakings or enterprises engaged in infrastructure development, etc. 80IA (1) . . ( 2) . ( 3) ( 4) This section applies to- ( i) any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely :- ( a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act; ( b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; ( c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: Provided that where an infrastructure facility is transferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... water supply project and executes the projects undertaken for West Bengal Govt. Thus, the assessee an authority of State Govt. is seen to have installed machinery and plant which forms part of water supply project and which have been put to use for providing infrastructure facilities under clause (1) of sub section (4) of sec. 80IA of the Act. Since the assessee has installed machinery and plant for water supply project and which was put to use for the purpose of business of providing infrastructure facility, the assessee is eligible for 100% deduction which should be allowed and therefore we confirm the order of Ld CIT(A) on this issue. 7. Coming to the claim of the assessee in respect of the depreciation on account of road is concerned, we note that the assessee has claimed depreciation of ₹ 7,42,47,049/- on road, whereas the AO allowed only 10% and disallowed an amount of ₹ 6,68,22,344/-. The Ld. CIT(A) after perusal of the remand report wherein AO was of the opinion that assessee is entitled to 100% depreciation has allowed 100% depreciation to the assessee. On a query from the Bench to the Ld. AR as to how the assessee can claim for roads depreciation of 100%, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) which provides for 10% depreciation and, therefore, the AO has rightly granted 10% depreciation for the roads developed by the assessee which action we uphold. Therefore, the Ld. CIT(A) erred in granting 100% depreciation albeit on AO s remand report. Therefore, we conclude that the AO s decision of disallowing 90% on water supply system is erroneous and, therefore, we direct the AO to allow the assessee s claim for 100% depreciation on water supply system and thereafter the Ld. CIT(A) s order which grants 100% depreciation for machinery and plant for water development project for AYs. 2011-12 and 2012-13 is confirmed whereas the Ld. CIT(A) s order for AYs 2011- 12 and 2012-13 in respect of allowing 100% depreciation for roads is erroneous and we reverse the order, consequently the AO s order allowing only 10% depreciation of roads is upheld. Since the reopening of the assessment for AYs 2008-09 to 2010-11 has not been pressed before us by the Ld. AR of the assessee, the grounds raising the same stands dismissed. 8. Since the dispute is with regard to allowing the claim of depreciation for all these assessment years the assessee succeeds to the extent that its claim for depr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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