TaxTMI 
TaxTMI 
2013 (9) TMI 397
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....ce, 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 Government of Andhra Pradesh, but said property was demised to the assessee during the contract per....
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....ip 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, he held that the order passed by the Assessing Officer has become erroneous and prejudicial to the ....
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....fo (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 of the Tribunal in the case of DCIT v. NOIDA Toll Bridge Co. Ltd. and for AY. 2003-04 in ITA No. 3211/Del/2006 dated 19.12.2008. 8. He further placed before us the following chronology of events to submit that the orders of the ITAT dismissing the departmental ap....
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....n 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 Commissioner to submit that since there is no transfer of an asset, assessee's claim under S.47(iv) does not arise, and therefore, the amount was rightly considered by the Commissioner as income under the head 'other sources'. He further contended that since the assessment was set aside to the Assessing Officer for fresh exam....
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.... 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 part of the project. Further, the learned Commissioner relied on clause 3.1.1 of the agreement which read as under- "FUNDING ARRANGEMENTS: 3.1 ..... 3.1.1 The Enterprise should not attempt to assign the project to others; Thus, as can be seen, the Enterprise should not attempt to assign the project to others, but as stated above the definition of enterprise is wide e....
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.... 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 structural facility to cater for the pipelines for oil, gas and water and at that time, they were envisaging establishing a pipeline for ONGC for transportation of gas by utilsiing this facility. Therefore, in anticipation of higher toll collection, they have considered the amount and transferred to the sister concern as a Special Purpose Vehicle(SPV) for the toll collection business of the enterprise. It was also informed that the amount of toll collection is being ....