TaxTMI 
TaxTMI 
2018 (10) TMI 124
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....on intangible assets like licenses, franchises or any other business or similar commercial rights of similar nature. The relevant part of the section for the sake of convenience is reproduced as under: "Depreciation. 32. (1) [In respect of depreciation of - (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed - ] ......." (emphasis supplied by us) 27. It is not disputed that the assessee has been given license/commercial right over the project to receive the toll. The assessee may not be the owner of the toll road, but he, certainly, is owner in possession of the right to collect the toll. The said right has been given to the assessee for a specified period with enduring benefit. It is also not disputed that on the expiry of the time period of the agreement, the said right of the assessee will cease to have ef....
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....v)Ashoka Info (P) Ltd. (supra) v) Reliance Ports and Terminals Ltd. (supra). 8. The Ld. CIT(DR) appearing for the Revenue, has submitted that the 'intangible assets' eligible for depreciation in section 32(1)(ii) of the Act, are only those which are owned by the assessee and have been acquired after spending money. In the case of the assessee, by way of an agreement, assessee was awarded a work to construct a road by using own funds and the expenditure incurred was allowed to be reimbursed by permitting the assessee a concession to collect toll/fees from the motorists using the road. Therefore, it could not be said that such a right was within the purview of section 32(1)(ii) of the Act. However, the Ld. CIT(DR) has not contested the factual matrix that identical issue has been considered by our coordinate Benches in the case of Ashoka Buildcon Ltd. (supra), Kalyan Toll Infrastructure Ltd. (supra), Dimension Construction Pvt. Ltd. (supra) and Ashoka Info (P) Ltd. (supra). 9. On the other hand, the Ld. Representative for the respondent assessee pointed out that the aforesaid argument set up by the Revenue has also been considered in the aforesaid precedents before c....
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....nd legally misplaced. Factually speaking, it is wrong to say that impugned right acquired by the assessee was without incurrence of any cost. In fact, it is quite evident that assessee got the right to collect toll for the specified period only after incurring expenditure through its own resources on development, construction and maintenance of the infrastructure facility. Secondly, section 32(1)(i1) permits allowance of depreciation on assets specified therein being 'intangible assets' which are wholly or partly owned by the assessee and used for the purposes of its business. The aforesaid condition is fully satisfied by the assessee and therefore considered in the aforesaid perspective we find no justification for the plea raised by the Revenue before us. 12. In the result, we affirm the order of the CIT(A) in holding that the assessee was eligible for depreciation on the „Right to collect Toll', being an „intangible asset' falling within the purview of section 32(1)(i1) of the Act following the aforesaid precedents." 7. In terms of the aforesaid precedent, the claim of the assessee in the present case for depreciation on 'License to collect ....
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....sessee's own case, we direct the AO to allow assessee's claim of depreciation in terms of the direction given by the Tribunal in its order dated 15/04/2015. 5. The second ground taken by assessee relates to treating interest income as income from business. We had carefully gone through the orders of the authorities below and found that this issue is also covered by the order of the Tribunal in assessee's own case. Precise observation of the Tribunal in its order dated 15/04/2015 for the A.Y.2009-10 is as under:- 3. The issue raised vide ground No.1 is as to whether the interest income of Rs. 1,34,59,582/- is to be assessed under the head "Income from other sources" or as "Business income" of the assessee. The Assessing Officer (hereinafter referred to as the AO) found that the interest income of Rs. 1,34,59,582/- derived from bank deposits had been included by the assessee into its business income. He, however, observed that since the said income was not derived from business activity of the assessee company, hence the same was taxable under the head "Income from other sources". 4. In the first appeal, the Ld. CIT(A) directed that the interest income be assessed as business i....
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....s of the Ld. Representatives of both the parties and have also gone through the records. A perusal of the above reproduced findings of the Ld. CIT(A) on this issue reveals that the Ld. CIT(A) has allowed the claim of the assessee directing that the interest income be treated as business income relying upon his own findings given in the earlier assessment year 2007-08 for which he had relied upon the decision of the Hon'ble Bombay High Court in the case of "CIT vs. Lok Holdings" 308 ITR 356. The Ld. A.R. of the assessee has stressed that the said findings of the Ld. CIT(A) given in relation to assessment year 2007-08 have been further upheld by the Tribunal vide order dated 27.02.13 passed in ITA No.1284/M/2011 & 14/M/2011. 6. We have perused the said order dated 27.02.1 3(supra) of the Tribunal. The relevant issue has been taken by the Tribunal vide para 21 of the said order. The Tribunal has allowed the claim of the assessee in view of the findings given while adjudicating the another issue relating to some other interest income of the assessee, the claim regarding treatment of which as „business income' was rejected by the Ld. CIT(A). The said issue has been discussed vi....