Revenue's Appeals Dismissed on Toll Collection Depreciation Disallowance for Assessment Years 2012-13 to 2014-15

The appeals by the Revenue regarding the disallowance of depreciation on the 'Right to collect toll' as an intangible asset for assessment years 2012-13 to 2014-15 were dismissed. The Tribunal upheld the decision of the CIT(A) based on precedents and the nature of the asset, ruling in favor of the assessee. The primary contention was whether the assessee, engaged in road construction on a BOT basis, could claim depreciation on the 'License to collect toll.' The Tribunal consistently applied the law, affirming the eligibility of depreciation on the intangible asset, leading to the dismissal of all three appeals.

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Issues:
Disallowance of depreciation on "License to collect toll" for assessment years 2012-13 to 2014-15.

Analysis:

Assessment Year 2012-13:
The primary issue in this appeal pertains to the disallowance of depreciation amounting to Rs.1,51,60,79,840 claimed by the assessee on "License to collect toll." The assessee, engaged in road construction on a BOT basis, capitalized the expenditure on BOT projects and claimed depreciation on the written down value. The AO contended that the assessee could not be considered the 'owner' of the property as the road developed on a BOT basis was not owned by it. The assessee argued that the expenditure was towards acquiring the right to collect toll, an intangible asset eligible for depreciation under section 32(1)(ii) of the Act. The Tribunal upheld the deletion of disallowance based on precedents from earlier years and the nature of the asset as an intangible one.

Assessment Years 2013-14 and 2014-15:
The issues for these years were identical to that of 2012-13, involving the grant of depreciation on the 'Intangible asset' of 'Right to collect toll' by the CIT(A). The amounts in question were Rs.1,57,86,56,832 and Rs.1,20,18,37,835 for the respective years. Both parties agreed that the facts and circumstances were similar to the 2012-13 assessment year. Following the precedent set in the earlier year, the Tribunal upheld the CIT(A)'s decision for these assessment years as well.

In conclusion, all three appeals by the Revenue were dismissed based on the consistent application of the law regarding the eligibility of depreciation on the 'Right to collect toll' as an intangible asset. The Tribunal's decision was in line with previous rulings and the specific nature of the asset under consideration.

This detailed analysis covers the issues raised in the judgment comprehensively, focusing on the disallowance of depreciation on the 'License to collect toll' for the specified assessment years and the Tribunal's rationale for upholding the CIT(A)'s decisions.

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