TaxTMI 
TaxTMI 
2017 (10) TMI 579
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....the Assessing Officer may be restored. 4. The appellant prays to adduce such further evidence to substantiate his case. 3. The learned Authorized Representative for the assessee at the outset pointed out that the issue raised in the present appeal is squarely covered by the order of Tribunal in sister concern's case i.e. Ashoka Infrastructure Ltd. Vs. ACIT in ITA Nos.1452 to 1457/PUN/2014, relating to assessment years 2006-07 to 2011-12, order dated 30.06.2017. 4. The learned Departmental Representative for the Revenue placed reliance on the order of Assessing Officer. 5. We have heard the rival contentions and perused the record. Briefly, in the facts of the case, the assessee was engaged in the business of development operations and maintenance of infrastructure facilities. For the year under consideration, the assessee had filed the return of income declaring total income at Nil. The case of assessee was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer noted that the assessee had claimed depreciation on 'Right to Collect Toll' at Rs. 63,09,15,059/-. The Assessing Officer held that the said depreciation was not allowab....
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....der section 143(3) r.ws 153A of the Act. However, the Assessing Officer denied the said claim of assessee in all the years under consideration holding that the assessee was not the owner of road attached to the said right and the asset road was not used in the business of assessee. The Assessing Officer also held that the right to collect toll was not a license. The CIT(A) on the other hand, relied on the circular issued by the CBDT giving clarification on treatment of expenditure incurred for development of roads / highways in Built-Operate-Transfer agreement. The CBDT vide circular No.9/2014, dated 23.04.2014 gave clarification on claim of depreciation under section 32(1)(ii) of the Act and clarified that since the assessee does not hold any rights in the project except recovery of toll fees to recoup the expenditure incurred, it thus, cannot be treated as owner of property either wholly or partly for the purpose of allowability of depreciation under section 32(1)(ii) of the Act. The CBDT denied the claim of depreciation but held the persons to be eligible for deduction on account of amortized cost incurred in creation of infrastructure facility of roads / highways over the perio....
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....he claim is made at the rate of 10%. The right to claim higher depreciation is reserved. The Appellant relied upon the standard concession document of the National Highway Authority of India and the clause therein that 'for the purpose of claiming tax depreciation, the property representing the capital investment made by the concessionaire shall be deemed to be acquired and owned by the concessionaire'." (emphasis supplied by us) 18. The Hon‟ble Bombay High Court, however, after discussing the provisions of National Highway Act, 1956 and National Highway Authorities of India Act, 1988 and various case laws including that are strongly relied upon by the Ld. A.R. e.g. "Mysore Minerals Ltd. vs. CIT" reported in (1999) 239 ITR 775 SC, "CIT vs Podar Cement Pvt. Ltd. & others" reported in (1997) 226 ITR 625 SC and "CIT vs. Noida Toll Bridge Company Ltd." (Allahabad HC) (supra), has held that the national highways vest in the Union of India and if the government for the purpose of development and maintenance of the whole or any part of the national highways enters into an agreement with private parties or that merely because the national highway is built, maintaine....
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....#8223; is defined in this manner in Income Tax Act, 1961. The above observations of the Hon‟ble Bombay High Court reveal that for the purpose of claiming deduction under Income Tax Act, the term „owner‟ as defined under the Income Tax Act can be looked into. However, that cannot control, leave alone or overreach the National Highway Act, 1956 or the National Highway Authorities of India Act, 1988. The Hon‟ble Bombay High Court further, in para 47 of the said order, has observed that the assessee can definitely claim depreciation on the investments. He has definitely invested in the projects of construction development and maintenance of the National Highways and such of the assets in the form of building, plant & machinery etc. The claim for depreciation can be validly raised and granted. That the Hon‟ble High Court in the said case was only concerned with the claim on the land or a road itself. Further, in concluding para 52 of the order, the Hon‟ble Bombay High Court has categorically clarified that the assessee‟s claim for depreciation in respect of the building, plant & machinery and falling within the purview of sub sect....
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.... Limited vs. CIT‟ 1991 Supp (2) SCC 744 = (1991) 187 ITR 688 has observed that the power of the Appellate Commissioner is coterminous with that of the Income Tax Officer and an appellate authority while hearing appeal against the order of the subordinate authority, has all the powers which the original authority may have in deciding the questions before it, subject to the restrictions or limitations, if any, prescribed by statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. An assessee is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. The appellate authorities have jurisdiction to deal not merely with additional grounds which became available on account of change of circumstances or law, but with additional grounds which were available when the return was file....
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....oviding enduring benefit to the assessee company, hence, the said amount would be eligible for amortization for the period of the concession agreement as it was allowed in the A.Y. 2007-08 and 2008-09. It is also a fact that the said amortization of the expenses has not been accepted by the Tribunal and the assessee in the earlier assessment years has been granted deduction as depreciation treating the road as a capital asset. 23. In view of the above facts, it is not disputed or contested by the Revenue that the assessee is not entitled to any deduction. The only issue in dispute is as to under what head/provision the deduction is to be allowed to the assessee. The Hon‟ble Jurisdiction High Court of Bombay in the case of "Balmukund Acharya vs. DCIT" reported in (2009) 221 CTR 440 (Bom.) has held that the Hon‟ble Apex Court and the various High Courts have ruled that the authorities under the Act are under obligation to act in accordance with law. Tax can be collected only as provided under the Act. If the assessee, under a mistake, misconception or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and e....
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....n the ground that there was continuing benefit to the company over a period. Therefore, analogously, expenditure incurred on an infrastructure project for development of roads/highways under BOT agreement may be treated as having been made/incurred for the purposes of business or profession of the assessee and the same may be allowed to be spread during the tenure of concessionaire agreement." 25. Having discussed the above stated factual position, the CBDT has directed to treat the above expenditure as revenue expenditure and to amortize the same over the period of the agreement as allowable business expenditure. The assessee, however, has claimed that the same is a capital expenditure and it is entitled to deductions over the investments made as depreciation. A perusal of the above reproduced para 4 of the circular reveals that it is not disputed even by the Revenue Authorities that in lieu of the investments made in the project, the assessee has been given right/license to collect the toll. It has also been specifically mentioned that it brings an enduring benefit in the form of right to the assessee. Having admitted the above position by the Revenue, now the question t....
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....the case of „Ashoka Infraways Pvt. Ltd. Vs. ACIT‟ in ITA No.185 & 186/PN/2012 dated 29.04.2013, has held in clear terms that the claim of the assessee for depreciation on "licence to collect toll" being an „intangible asset‟ falling within the scope of section 32(1)(ii) of the Act is liable to be upheld. The relevant part of findings of the Tribunal for the sake of convenience is reproduced as under: "6. At the time of hearing, it was a common point between the parties that an identical issue has been considered by the Pune Bench of the Tribunal in the case of Ashoka Infraways Pvt. Ltd. vs. ACIT vide ITA Nos. 185 & 186/PN/2012 dated 29.04.2013. As per the Tribunal following the precedents by way of various decisions of different Benches of the Tribunal mentioned therein, the claim of the assessee for treating the 'License to collect Toll' as an intangible asset eligible for the claim of depreciation @ 25% as per Section 32(1)(ii) of the Act was justified. The following discussion in the order of the Tribunal dated 29.04.2013 (supra) is relevant:- "7. Before us, it was a common point between the parties that the impugned issue has be....
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....s own funds. Moreover, after the end of the specified period, assessee was to transfer the said infrastructure facility to the Government of Madhya Pradesh free of charge. In consideration of developing, constructing, maintaining the facility for a specified period and thereafter transferring it to the Government of Madhya Pradesh free of charge, assessee was granted a Right to collect Toll' from the motorists using the said infrastructure facility during the specified period. The said Right to collect the Toll' is emerging as a result of the costs incurred by the assessee on development, construction and maintenance of the infrastructure facility. Such a right has been adjudicated by the Tribunal in the aforesaid precedents to be in the nature of 'intangible asset' falling within the purview of section 32(1)(i/) of the Act and has been found eligible for claim of depreciation. No decision to the contrary has been cited by the Ld. DR before us and, therefore, we find no reasons to depart from the accepted position based on the aforesaid decisions. 11. So however, the plea of the Ld. DR before us is to the effect that the impugned right is not of the nature ....
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.... the road to collect toll being an intangible asset falling within the purview of section 32(1) (ii) of the Act." 22. The Tribunal in ACIT Vs. West Gujarat Expressway Ltd. (supra) further referring to the ratio laid down by the Hon‟ble Bombay High Court held that since the assessee is not the owner of toll road, but has been given the right to develop, maintain and operate the toll road and to further collect the toll for the specified period, then this right is an intangible asset falling under section 32(1)(ii) of the Act and the alternate contention of assessee that the project be treated as plant & machinery and depreciation be allowed, was rejected vide para 30 of the order. Further, vide para 31, the Tribunal considered the contention of Revenue that investment made by the assessee be treated as revenue expenditure and be amortized for the period of agreement, was rejected holding that the investment made under the circumstances could not be said to be revenue in nature but was capital in nature, on which the assessee was entitled to claim the depreciation. Para 31 of the order reads as under:- "31. So far as the contention of the Revenue that the inve....