2016 (4) TMI 1220 - HC - Income Tax

Tax Authorities Win Key Depreciation Appeal, Tribunal's Asset Classification and Income Tax Interpretation Fully Sustained

HC allowed Revenue's appeal in tax assessment case. Court rejected challenges to Tribunal's depreciation and asset classification decisions, citing ... Depreciation on assets not owned by the respondent - Whether the Tribunal was right in its decision of treating toll roads as plant and machinery, when this is not as per rule 5 of New Appendix I of the Income-tax Rules? - Held that:- Following the case of CIT v. West Gujarat Expressway Ltd. [2016 (4) TMI 1184 - BOMBAY HIGH COURT] wherein held merely, because the road is laid out does not mean that the Assessee is the owner thereof. He has laid it out for the purpose of the union and for its ultimate vesting in the public we answer substantial questions of law in the negative, i.e., in favour of the appellant-Revenue and against the respondent-assessee. The Bombay High Court in this appeal, heard alongside Income Tax Appeal No. 2357 of 2013, addressed two key legal questions raised by the Revenue concerning the assessment year 2008-09: (i) whether the Tribunal erred in directing the Assessing Officer to grant depreciation on assets not owned by the respondent, allegedly contravening section 32 of the Income-tax Act; and (ii) whether the Tribunal was correct in treating toll roads as 'plant and machinery' contrary to rule 5 of New Appendix I of the Income-tax Rules. The Court, referencing its prior decision in CIT v. West Gujarat Expressway Ltd. [2017] 390 ITR 398 (Bom), answered both questions in the negative, thereby ruling in favor of the appellant-Revenue and against the respondent-assessee. The appeal was disposed of accordingly, with no order as to costs.