TaxTMI 
TaxTMI 
2013 (9) TMI 397
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....has come to a conclusion which is not valid in law and, hence, the order passed by him is erroneous. 3. The learned CIT has erred in law on facts in setting aside the order passed by the Assessing Officer u/s. 143(3) read with S.153A of the Act on 28.11.2008 and in holding that : (a) The appellant does not own any capital asset and, hence, there is no transfer which could be claimed to be exempt u/s. 47(iv) of the Act; and (b) The amount of 125 cores received is to be taxed as income from other sources. 4. The learned CIT ought to have held that in any case, the amount of Rs. 125 crores cannot be brought to tax under the provisions of the Act. 5. ......." 3. Briefly stated, facts of the case are that the assessee has built a bridge named 'Yanam Project' across the river Gauthami, between Yanam and Yedurulanka, under a BOT agreement with Government of Andhra Pradesh. The project was built at a cost of Rs. 86 crores out of which Rs. 69 crores was given as subsidy by the government of Andhra Pradesh. As per the terms of agreement, the appurtenant land and the project constructed including approach roads are under the ownership of Gov....
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....ne and issued show cause notice under S.263 of the Act. 5. Assessee submitted that it has ownership on the BOT asset and depreciation was being allowed. It was also submitted that the asset includes the right to collect toll for a period of 15 years, which is also an asset and therefore, the claim under S.47(iv) was correctly made. It also relied on various case-law as noted in para 5.4 of the order of the Commissioner. However, the Commissioner of Income-tax after analysing the agreement with the Government of Andhra Pradesh has given a finding that the asset does not belong to the assessee and transferring a 'right to use' the asset to a subsidiary company cannot be a 'transfer' for the purpose of S.47(iv) and further, since there is no transfer, there cannot be any question of capital gain arising out of such arrangement made by the assessee with its subsidiary. Accordingly, he gave a finding that there is no scope of claiming exemption under S.47(iv) of the Act. Further, he also analysed the receipt of Rs. 125 crores and directed that to be assessed as income from other sources, as this income cannot be taxed under any other head of income. In view of these findings,....
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....1050-1053/Hyd/09 dated 08.10.2010. 2) Order of the Tribunal in the case of Tamil Nadu Road Development Co. Ltd. v. ACIT [120 ITD 20 (Chennai)] ' 3) Order of the Tribunal in the case of Ashoka Info (P) Ltd. v. ACIT [123 TTJ77 (Pune)]. 4) Order of the Tribunal in the case of Maharashtra State Road Development Corporation Ltd. v. ACIT [128 TTJ 32 (Mum)]. 5) Order of the Tribunal in the case of Gujarat Road & Infrastructure Co. Ltd.v. CIT [2011] 15 taxmann.com 387 / (2011) 7 ITR 730 (Ahd-Trib). 6) Order of the Tribunal in the case of M/s. Nyse Infrastructure Pvt. Ltd. v.DCIT for AY. 2005-06 in ITA No. 301/Hyd/2009 dated 05.06.2009. 7) Order of the Tribunal in the case of M/s. Nyse Infrastructure Pvt. Ltd. for AY. 2006-07 in ITA No. 1142- /Hyd/2009 dated 05.06.2009. 8) Order of the Tribunal in the case of DCIT v. M/s. Nyse Infrastructure Pvt. Ltd. for AY. 2007-08 in ITA No. 1343/Hyd/2010 dated 11.02.2011. 9) Order of the Tribunal in the case of M/s. Dimension Construction Pvt. Ltd. v. DCIT for AYs. 2002-03,2004-05, 2003-04 and 2006-07 in ITA Nos. 222, 223, 233 and 857/PN/2009 dated 18.03.2011. 10) Order....
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....in the consequential assessment proceedings, has simply followed the directions of the Commissioner by extracting the said order and bringing to tax the entire amount of Rs. 125 crores, which also indicates that the Commissioner has simply concluded the issues. Therefore, the order of the Commissioner is challenged on merits. 10. In reply, the learned CIT-DR referred to the agreement with Government of Andhra Pradesh and relied on the specific clauses to submit that the assessee is not the owner of the asset and therefore, there cannot be any transfer of the said asset. He further submitted that earlier the assessee contended that it has transferred the ownership of the project, whereas now it is contending that the right to collection of toll was transferred to the subsidiary company. He submitted that the case-law relied upon by the assessee is more with reference to allowance of depreciation, but not pertaining to the transfer of an asset There are various other parameters which are to be considered and not allowing the depreciation alone, and hence decisions in that context may not be invoked for the propose of considering the transfer of asset. He supported the order of the....
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.... provided in the preamble, and the said clause reads as follows- "..... 1.1 "Enterprises" means the Navayuiga Engineering Company Limited, a company having its registered office at 48-90-17, Darakanagar, Visahaptnam-530016, for undertaking work and shall include their legal representatives, successors, administrators, receivers and assignees." Therefore, there is no specific restriction on the part of the Government of Andhra Pradesh as stated by CIT, as the 'enterprise' means all other persons specified in the definition of that term in the agreement. Now, the project as defined in clause 1.8 is as under- "1.8. Project' means survey, investigation, studies, planning, design, construction of the Yanam-Ydurlanka Bridge with approaches and cross drainage works, construction of fee collection arrangeement, as well as maintenance of the facility and collection of fee till the recovery of investment made by the Enterprise and handing over the facility to the Government in proper condition as defined later." Therefore, collection of fee till the recovery of investment made by the enterprise and handing over of the facility to the Government is par....
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....e space for creating construction facilities during the construction period only in the lands it has control of as part this project." As can be seen from the above terms of the agreement, there is no restriction on the part of the assessee to claim ownership on the BOT project during the period of recovery of the amount invested by way of toll, as the above clauses clearly demises the ownership to the assessee during the concession period. 13. In view of the above, the view taken by the Commissioner that there is no capital asset and there is no transfer cannot be accepted as the assessee is having ownership on the demised property by virtue of the very same agreement, and has a right to collect toll for the period of 15 years. As stated in the Resolution placed on record, what the assessee has transferred was right of toll collection for the balance period along with the demised property. 14. We have also enquired about the price paid for transferring the above right. We were informed that the assessee has right to collect toll and other fee and to develop way side facilities like advertisements, hoardings, etc. to generate revenue and also entitled to create additional ....