TMI Blog2023 (2) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Assessee : Shri Amarjit Singh , CA For the Revenue : Shri P. Praveen Sidharth , CIT DR ORDER PER CHANDRA MOHAN GARG , J. M. This appeal filed by the assessee is directed against the order dated 31.01.2019 of the Ld. CIT(A)-2, New Delhi relating to Assessment Year 2014-15. 2. The grounds of appeal raised by the assessee read as under: 1. That on the facts and circumstances of the case, Ld. Commissioner of Income-tax (Appeals) has erred while confirming non-acceptance of Revised Computation of Income submitted during assessment proceedings. 2. That on the facts and circumstances of the case, Ld. Commissioner of Income-tax (Appeals) has erred while confirming depreciation on Toll Road developed by the appellant @ 10% instead of the claim of the appellant of depreciation @ 25% under the head Intangible Assets. 3. That on the facts and circumstances of the case, Ld. Commissioner of Income (Appeals) has erred while not directing the Ld. AO to reduce the taxable income / increase the loss to the tune of Rs.15,33,92,8871- being difference between the proportionate write-off of cost incurred on Toll Road (as the appellant in the original retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Ld.CIT(A) rendered in the case of CIT vs Noida Toll Bridge Co. Ltd. (supra). We find that there were conflicting decisions rendered by the Hon ble High Court and Co-ordinate Benches of the Tribunal. However, the Tribunal in the case of ACIT vs M/s. West Gujarat Expressway Ltd. (supra) after considering the conflicting views held as under:- 28. In view of the express provisions of the Act, we have no doubt to hold that the assessee is entitled to collect tax being an intangible commercial right under section 32(1)(ii) at the rate as has been prescribed under the relevant rules. Our above view is further supported by the decision of the co-ordinate Pune bench of the Tribunal in the case of M/s. Ashoka Infrastructure Ltd. Vs. ITO in ITA No.989/PN/2010 ITA No.1105/PN/2010,wherein, the Tribunal while further relying upon another decision of the Coordinate Bench of the Tribunal in the case of 'Ashoka Infraways Pvt. Ltd. Vs. ACIT' in ITA No.185 186/PN/2012 dated 29.04.2013, has held in clear terms that the claim of the assessee for depreciation on licence to collect toll being an 'intangible asset' falling within the scope of section 32(1)(ii) of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o been considered in the aforesaid precedents before concluding that the impugned 'Right to collect Toll' was an 'intangible asset' eligible for claim of depreciation @ 25% as per sec. 32(1)01) of the Act. 10. We have carefully considered the rival submissions. Factually speaking, there is no dispute to the fact that the costs capitalised by the assessee under the head 'License to collect Toll' have been incurred for development and construction of the infrastructure facility, i.e., Dewas Bypass Road. It is also not in dispute that the assessee was to build, operate and transfer the said infrastructure facility in terms of an agreement with the Government of Madhya Pradesh. The expenditure on development, construction and maintenance of the infrastructure facility for a specified period was to be incurred by the assessee 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 Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case for depreciation on 'License to collect Toll', being an 'intangible asset' falling with the scope of Section 32(1)(ii) of the Act is liable to be upheld. We hold so. 8. In so far as the reliance placed by the CIT(A) on the judgement of the Hon'ble Bombay High Court in the case of Techno Shares And Stocks Ltd. (supra) is concerned it may only be noted that the said judgement has since been altered by the Hon'ble Supreme Court vide its order reported at (2010) 327 ITR 323 (SC). Accordingly, in view of the aforesaid discussion, we hereby allow the Ground of Appeal No. 1.1 raised by the assessee. 29. In view of our observations made in the preceding paras and also agreeing with the above reproduced findings of the Tribunal, we hold that the assessee is entitled to the claim of depreciation on the road to collect toll being an intangible asset falling within the purview of section 32(1) (ii) of the Act. 30. So far as the other alternative contention of the assessee that the project be treated as plant machinery and the depreciation be accordingly allowed to it, we do not find that the said license of right to collect toll in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the assessee is also eligible for depreciation at the rate of 25% as claim by the for A.Y. 2014-15 also. Therefore ground no. 1, 2 3 of assessee are allowed. Ground no. 5 7. Apropos this ground the learned counsel of assessee submitted that this issue has also covered by the said order of ITAT Delhi dated 18.05.2021 para 17 to 19. The Ld. CIT(DR) did not controvert that under identical facts and circumstances the coordinate bench of Tribunal in assessee s own appeal for A.Y. 2012-13 2013-14 has allowed the claim of assessee for provision which was created for the provision made by the assessee in accordance with settled principle of law. The relevant para 17 to 19 of assessee in said appeals are as follows:- 17. We have heard the rival contentions and perused the material available on record. Ld.CIT(A) has decided the issue against the assessee upholding the action of the Assessing Officer. The relevant contents of Ld.CIT(A) is reproduced as under:- .Thus, one of the prime conditions for any deduction on account of business expenditure is that that same should have been incurred during the previous year. In the present case, the Toll road became ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were started on 09.08.2011 and estimation of maintenance expenditure was estimated to Rs.12.07 crores and being not having full year operations of the project, provision was created for only one quarter i.e. Rs.12.07 crore/4 i.e. Rs.3 crore. Reliance is placed upon the judgement of Hon ble Supreme Court in M/s. Rotork Controls India (P.) Ltd. vs CIT reported in 314 ITR 0062 [2009] [SC]. Further, reliance was placed upon the judgement of Hon ble Supreme Court in the case of Bharat Earth Movers vs CIT reported in 245 ITR 428 [2000] [SC] and also the decision Hyderabad Bench of Tribunal in the case of M/s. Mokama Munger Highway Ltd. vs ACIT (supra). 19. In the light of the above case laws as relied upon by the Ld. Counsel for the assessee, we are of the considered view that the claim of provision as made by the assessee is in accordance with settled principal of law. Therefore, the authorities below were not justified in making the disallowance. Thus, Ground of appeal No.3 raised by the assessee is allowed. 8. Respectfully following the order of the Tribunal in assessee s own appeals for A.Y. 2012-13 2013-14 the claim of assessee for provision made by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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