9911796707
TMI Blog2025 (1) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... aw arising out of the order dated 27th August, 2008 passed by the Income Tax Appellate Tribunal (for short 'Tribunal') in ITA No.213/RJT/06 for the assessment year 2003-04. (i) Whether, in the facts and circumstances of the case the Income Tax Appellate Tribunal was right in law in confirming the disallowance of depreciation of Rs. 2,81,25,000/- crores? (ii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in not treating Rs.20 crores as the cost of the pipeline eligible for depreciation? (iii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in treating the minimum liability payable by the appellate to the Gujarat Maritime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer by observing as under. "7. We have heard the rival contentions of the parties. Looking to the facts and circumstances of the case, we find it is not in dispute and it Is not disputed by the assessee-company that the assessee has laid down the pipeline from Moti to KPT for transportation of petroleum product. It is also the fact on record that the assessee and KPT and GMB has not made any agreement that no MOU nor agreement is signed in between the assessee-company and GMB and KPT. The assessee has to pay amount in question to both corporations for laying down the payments but this liability is either legal or contractual. This ability is not legal but contractual liability and can be said to have been arise and agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansportation of petroleum product from Sikka to Kandla. We find that the initial agreement with KPT and GMB was for laying down pipeline subject to satisfactory payment mutually agreed. We find during the course of hearing the learned AR was specifically asked whether the work of any pipeline has been carried out or as on today whether any agreement has been executed between the KPT, GMB and assessee. The learned AR submitted that no such agreement has been carried out as on today. We find that the assessee has unilaterally created the liability and this liability has not been accepted by KPT and GMB. Therefore, this liability cannot be allowed as deduction and this is only recreated liability. Learned AR has relied upon the decision of Guj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration was properly required to deduct not only the payments actually made for use of premises and facilities but also the present value of any payments in respect of such use in that year though payable in a subsequent year in case of such liability could be satisfactorily estimated. The assessee has given detailed working of the estimated liability for the year under consideration and there is no dispute as regard the same. Here in the instant case on hand, the Assessing Officer has disputed the liability of the assessee. We find that the assessee company has not made any contractual payment to KPT or GMB and the amount of Rs.10 crores was to be paid. to the corporations. For that this liability has not been agreed by the KPT a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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