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TaxTMI 
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2018 (12) TMI 1455
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....o 2010-11, the assessee has raised additional grounds of appeal, assailing the action of AO in reopening of the assessment after lapse of four years in respect to AYs. 2008-09 and 2009-10. However, at the time of hearing before us, the Ld. AR did not press the legal issue of reopening for AYs 2008-09 to 2010-11; therefore, both the sides agree that the issue involved in this appeal is one and the same for all the assessment years. Therefore, the decision in one appeal will guide the 'lis' involved in other appeals. Since we note that the issue cropped up for the first time in AY 2011-12, it would be in the fitness of the things to adjudicate the issue in AY 2011-12 which will be the lead case and the result of it will be followed in all other cases before us. 3. ITA No. 2353/Kol/2017 (AY 2011-12) appeal of the revenue is taken as the lead case. Main grievance of the revenue is against the action of the Ld. CIT(A) in deleting the disallowance of depreciation of Rs. 31,23,87,263/-. Brief facts of the case are that the AO while conducting the scrutiny assessment noted that the assessee is a local authority and has claimed depreciation of Rs. 27,28,49,910/- on water supply scheme for ....
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....22,344/- was made by the A. O disallowing 90% depreciation of fixed assets on water supply scheme and on Road stating that the assessee is a local authority and is assessed as such, he has failed to prove how it is covered under the provisions of section 80IA(4)(i). Therefore 100% depreciation on water supply scheme and on roads, as claimed by the assessee is restricted to 10%. During the course of hearing for remand proceedings, the A/R of the assessee, argued that Haldia Development Authority was establish with the object of preparing plans and development of its area and till date it is working for developing in its area by way of making water project, roads, and other infrastructural development work. He has submitted a copies of notification of Govt. of West Bengal vide No. 2097 - T&CP/IR-'6/80 dated, 27. 03. 1980 and No. NO. 288 - T&CP/C-2/2L-7/2001 dated, 13. 02. 2013 in support of his contention. From the above notifications it is seen that Haldia Development Authority was constituted as Statutory Body in the year 1980 as per West Bengal Town and Country (Planning & Development)Act,1979 (West Bengal Act XIII of 1979). And its area for development was extended time to ti....
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....nd plant forming part of water supply project or water treatment system and which is put to use for the purpose of business or providing infrastructure facilities under clause (i) of sub-section (4) of sec. 80IA - (100% depreciation up to 01. 04. 2017 and thereafter 40%) II. ....... III. Machinery and Plant includes - 1. 2. 3. 4. 6. (7) Machinery and plant, acquired and installed on or after the 1st day of September, 2002 in a water supply project or a water treatment system and which is put to use for the purpose of business of providing infrastructure facility under clause (i) of sub-section (4) of section 80IA . (00% up to 01. 04. 2017 thereafter 40%) Notes: 1. 'Building' include roads, bridges, culverts, wells and tube wells. 2. A building shall be deemed to be a building shed mainly for residential purposes, if the built up floor area thereof used for residential purposes is not less than sixty-six and two-third percent of its total built up floor area and shall include any such building in the factory premises. 3. In respect of any structure or work by way of renovation or improvement in or in relation to a building referred to in Explanation ....
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....profits and gains would be available to such transferee enterprise for the unexpired period during which the transferor enterprise would have been entitled to the deduction, if the transfer had not taken place. [Provided further that nothing contained in this section shall apply to any enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017] Explanation. -For the purposes of this clause, "infrastructure facility" means- (a) a road including toll road, a bridge or a rail system; (b) a highway project including housing or other activities being an integral part of the highway project; (c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; (d) a port, airport, inland waterway, inland port or navigational channel in the sea; 6. A bare reading of the aforesaid Rules and Act which spells out the Table of rates item-wise of assets governing the depreciation claimed by the assessee in respect of machinery and plant for water supply project which has been put to use on or after 1st September, 2002. We note th....
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.... machinery and plant forming part of water supply project and which is put to use for the purpose of business of providing infrastructure facilities under clause (1) of sub-section (4) of sec. 80-IA. According to Ld. CIT, DR, item (3) is for building acquired for installation of machinery and plant. Here building cannot be given the meaning 'road' and wondered as to how the machine and plant can be installed on road. Therefore, Ld. CIT, DR contended that the assessee's case falls under item (2) of assets falling under the heading "Building" which says building other than those used mainly for residential purposes covered under item (1) and not covered by sub-items (3). We note that item (1) is for building/roads which are used mainly for residential purposes other than hotels and boarding houses for which depreciation of 5% is allowable. Sub-item (3) is envisaged for buildings acquired for installation of machinery and plant forming part of water supply project or water treatment system for purposes of business of providing infrastructure facilities, whereas item (2) envisages for building/roads other than those used mainly for residential purpose which means the assets neither fal....