Tribunal rules for appellant in BOT project depreciation dispute, citing non-retrospective nature of CBDT Circular

The Tribunal ruled in favor of the appellant, a company involved in a BOT project, regarding the disallowance of depreciation by the Assessing Officer amounting to &8377;23,85,71,095. The Tribunal held that the CBDT Circular No. 09/2014 could not be applied retrospectively, supporting the appellant's claim for depreciation on toll roads. The decision emphasized the non-retrospective nature of circulars and highlighted the importance of considering their applicability timelines in tax assessments.

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Issues:
1. Disallowance of depreciation by the Assessing Officer
2. Interpretation of CBDT Circular No. 09/2014

Issue 1: Disallowance of depreciation by the Assessing Officer:
The appellant, a company involved in a BOT project, filed an appeal against the disallowance of depreciation amounting to &8377; 23,85,71,095 by the Assessing Officer. The project involved a concession agreement with NHAI for toll collection. The AO disallowed the depreciation based on amortization principles outlined in CBDT Circular No. 09/2014. The appellant contested this disallowance, citing case laws supporting depreciation claims on toll roads. The ld. CIT(A) allowed the appeal, emphasizing that the Circular could not be applied retrospectively. The Tribunal upheld the ld. CIT(A)'s decision, ruling in favor of the appellant and dismissing the Revenue's appeal.

Issue 2: Interpretation of CBDT Circular No. 09/2014:
The dispute centered on the applicability of the CBDT Circular No. 09/2014, which outlined the amortization of infrastructure costs over concessionaire agreement periods. The Revenue argued that the appellant did not qualify as the property owner for depreciation purposes. However, the Tribunal noted that the appellant's eligibility for depreciation on toll roads was not contested. The Tribunal emphasized that the Circular could not be applied retrospectively, as it was issued after the appellant filed its return. Citing relevant case laws and the non-retrospective nature of circulars, the Tribunal supported the appellant's claim for depreciation. The Tribunal's decision highlighted the importance of considering circulars' applicability timelines in tax assessments.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the Tribunal's reasoning leading to the final decision.

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