TMI Blog2021 (1) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... is similar to the issue on hand before us. Therefore, the assessee is eligible to get depreciation u/s. 32(1)(ii) of the Act. We hold that the assessee is entitled to claim deprecation as per specified rate at 25% and the order of CIT(A) is justified. It is observed that the AO, while denying the claim of depreciation, allowed deduction towards amortization of expenses relatable to money spent for construction of infrastructure facilities, i.e. bus terminal. Once the claim of the assessee towards depreciation allowance is accepted, the deduction allowed by the AO towards allocated cost of project, naturally needs to be withdrawn. The AO is directed to recalculate the depreciation in terms indicated above and add back the allocated cost of project as allowed by him as deduction in the assessment order - Decided against revenue. - ITA Nos.53 to 55/PUN/2018 - - - Dated:- 5-1-2021 - Shri R.S. Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Nikhil Pathak For the Revenue : Shri Mahadevan A.M. Krishnan ORDER PER S.S. VISWANETHRA RAVI, JM : These three appeals by the Revenue against the common order dated 09-10- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the disallowance of deprecation made by the AO. 6. Before us, ld. DR, Shri Mahadevan A.M. Krishnan submits that the Hon ble High Court of Bombay admitted the substantial question of law raised by the revenue in the case of Ashoka Infraways Pvt. Ltd. in Income Tax Appeal No. 415 of 2014 and CIT(A) ought to have considered the order of Hon ble High Court of Bombay in admitting the substantial question of law and he erred in holding the right of collection of toll is depreciable intangible asset. The ld. DR placed on record the order dated 30-08-2016 of Hon ble High Court of Bombay and referred to the substantial question of law raised by the appellant-revenue. He submits that the appellant-revenue did not accept the decision of this Tribunal in the case of Ashoka Infrastructure Pvt. Ltd. in holding the right to collect toll is intangible asset and prayed to restore the order of AO, also to allow grounds raised by the revenue. 7. The ld. AR, Shri Nikhil Pathak submits that this Tribunal held the right to collect toll creates an intangible asset in terms of section 32(1)(ii) of the Act and such right is a depreciable and assessee is entitled to claim depreciation under the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bridge and collect toll charges in lieu of investment made by it in implementing project is a business or commercial right as envisaged u/s. 32(1)(ii) of the Act r.w. Explanation 3(b) and held the assessee is eligible to claim depreciation. The relevant paragraphs of the order are as under : 16. We have already held earlier in the order that by incurring the expenditure of `₹ 214 crore assessee has acquired the right to operate the project and collect toll charges. Therefore, such right acquired by the assessee is a valuable business or commercial right because through such means, the assessee is going to recoup not only the cost incurred in executing the project but also with some amount of profit. Therefore, there cannot be any dispute that the right to operate the project facility and collect toll charges therefrom in lieu of the expenditure incurred in executing the project is an intangible asset created for the enduring benefit of the assessee. Now, it has to be seen whether such intangible asset comes within the expression any other business or commercial rights of similar nature . As could be seen from the definition of intangible asset, specifically iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot of the same line and are clearly distinct from one another. The Court observed, the use of words business or commercial rights of similar nature , after the specified intangible assets clearly demonstrates that the legislature did not intend to provide for depreciation only in respect of specified intangible assets but also to other categories of intangible assets which were neither visible nor possible to exhaustively enumerate. The Hon'ble Court, therefore observed, in the circumstances the nature of business or commercial right cannot be restricted only to knowhow, patents, trademarks, copyrights, licence or franchise. The Court observed, any intangible assets which are invaluable and result in smoothly carrying on the business as part of the tool of the trade of the assessee would come within the expression any other business or commercial right of similar nature . 17. In the case of Techno Shares and Stocks Ltd. v/s CIT, [2010] 327 ITR 323 (SC), the Hon'ble Supreme Court while examining the assessee s claim of depreciation on BSE Membership Card, after interpreting the provisions of section 32(1)(ii), held that as the membership card allows a member to partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 for A.Y. 2011-12 order dated 11-02-2019 by placing reliance on the decision of Special Bench of Hyderabad Tribunal in the case of Progressive Construction Ltd. (supra) held the assessee therein is eligible to claim depreciation on National Highway constructed on BOT basis. 13. As discussed above, the ld. DR placed reliance on the order of Hon ble Jurisdictional High Court of Bombay in admitting the substantial question of law raised by the appellant-revenue. We note that the Hon ble High Court of Bombay was pleased to admit the substantial question of law and there was no order modifying or staying the operation of order passed in the case of Ashoka Infrastructure Ltd. (supra) by the Hon ble High Court. The ld. DR could not place any order to that effect before us in support of his arguments that the assessee is not entitled to claim depreciation. Therefore, in our view in the facts and circumstances of the case and the discussion made here-in-above, we hold that the assessee is entitled to claim deprecation as per specified rate at 25% and the order of CIT(A) is justified. It is observed that the AO, while denying the claim of depreciation, allowed deduction towards amortiz ..... X X X X Extracts X X X X X X X X Extracts X X X X
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