Tribunal allows 25% depreciation on Toll Road & major maintenance provision. Appeal partly allowed.

The Tribunal allowed the appellant's claims for depreciation at 25% on the Toll Road and the provision for major maintenance, directing the AO to adjust accordingly. The appeal was partly allowed, dismissing specific grounds not pressed by the appellant. The order was issued on 13.02.2023.

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Issues Involved:
1. Non-acceptance of Revised Computation of Income.
2. Depreciation on Toll Road.
3. Reduction of taxable income/increase of loss.
4. Reduction of grant received from NHAI.
5. Disallowance of Provision made for Major Maintenance.
6. Treatment of major maintenance expenditure.

Issue-wise Detailed Analysis:

1. Non-acceptance of Revised Computation of Income:
The appellant argued that the Commissioner of Income-tax (Appeals) [CIT(A)] erred in confirming the non-acceptance of the Revised Computation of Income submitted during assessment proceedings. The Tribunal did not specifically address this issue in detail as it was linked with the other grounds of appeal.

2. Depreciation on Toll Road:
The appellant contended that the CIT(A) erred in confirming depreciation on the Toll Road at 10% instead of the claimed 25% under the head Intangible Assets. The Tribunal referred to its previous decisions in the appellant's own appeals for A.Y. 2012-13 & 2013-14, where it was concluded that the right to collect toll fees is considered an intangible asset under Section 32(1)(ii) of the Income Tax Act. The Tribunal upheld the appellant's claim for depreciation at 25%, aligning with precedents from other Benches and the Hon'ble Bombay High Court. Consequently, the Tribunal allowed the appellant's claim for depreciation at 25%.

3. Reduction of Taxable Income/Increase of Loss:
The appellant argued for a reduction in taxable income or an increase in loss due to the difference between the proportionate write-off of the cost incurred on the Toll Road and the depreciation allowed at 10%. The Tribunal, following its earlier decisions, allowed the appellant's claim for depreciation at 25%, effectively addressing this issue by aligning the depreciation rate with the appellant's claim.

4. Reduction of Grant Received from NHAI:
The appellant did not press this ground during the hearing, and hence, it was dismissed.

5. Disallowance of Provision made for Major Maintenance:
The appellant contested the disallowance of a provision for major maintenance amounting to Rs.12,05,00,000/-, arguing that the provision was not contingent in nature. The Tribunal referred to its previous decision in the appellant's own appeals for A.Y. 2012-13 & 2013-14, where it was held that the provision for maintenance expenditure was in accordance with settled legal principles. The Tribunal allowed the appellant's claim for the provision, directing the Assessing Officer (AO) to delete the disallowance.

6. Treatment of Major Maintenance Expenditure:
The appellant did not press this ground during the hearing, and hence, it was dismissed.

Conclusion:
The Tribunal allowed the appellant's claims regarding the depreciation rate on the Toll Road and the provision for major maintenance, directing the AO to make the necessary adjustments. The appeal was partly allowed, with specific grounds not pressed by the appellant being dismissed. The order was pronounced in the open court on 13.02.2023.

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