TaxTMI 
TaxTMI 
2019 (8) TMI 164
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....he brief facts of the case are that the Assessee was awarded the contract for broadening of Zirakpur-Parwanoo Section of National Highway-22 including Pinjore-Kalka Parwanoo Bypass on Build- Operate-Transfer (BOT) basis. He filed a return claiming that he had spent a sum of Rs. 723.00 crores odd on the construction and claiming depreciation of Rs. 72.00 crores odd under Section 32 of the Act. The Assessing Officer held that since the road was not 'owned by the Assessee' he could not claim depreciation. The Assessee accepted this finding and did not challenge the same in the appeal. Thereafter penalty proceedings were initiated against the Assessee, which have been set aside as mentioned above. It is the contention of the Revenue tha....
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...., culverts, public amenities etc. at its own cost and its utilization thereof for a specified period. In lieu of consideration of the expenditure incurred on construction, operation and maintenance of the infrastructure facility covered by the period of the agreement, the assessee is accorded a right to collect toll from users of such facility. The expenditure incurred by such assessee on development and construction of such infrastructural facility are capitalized in the accounts. It is seen that in returns-of-income, assessees are generally claiming depreciation on such capitalized expenditure treating it as an 'intangible asset' in terms of section 32(1) (ii) of the Act while in assessments, such claims are being disallowed by th....
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....cover cost incurred by him towards development of such facility (comprising of construction cost and other pre-operative expenses) during the construction period. Further, expenditure incurred by the assessee on such BOT projects brings to it an enduring benefit in the form of right to collect the toll during the period of the agreement. Hon'ble Supreme Court in the case of Madras Industrial Investment Corp Ltd. 225 ITR 802 (SC) allowed spreading over of liability over a number of years on 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 ....
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....the notice of all concerned." 4. Both the authorities held that the Board had itself recognized that in many cases Assessees were claiming this depreciation while the Assessing Officers were disallowing it. The Board further noticed that in such projects the land was temporarily transferred to the Assessees who constructed the highway at their own cost and, were in lieu thereof, given the right to charge toll from the users for a fixed period. The Board clarified that in such cases the Assessee would be entitled to amortization under the relevant provisions of the Act. Interestingly, in para 7 of the circular the Board noticed that there may have been cases in the past where Assessees had obtained the depreciation and held that in those c....
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....n order to acquire the property. On 18.09.2004 i.e. after about 5 months the property was sold to a Company viz. Hindustan Udyog Limited for a consideration of Rs. 4.5 crores but only an agreement of sale was executed, possession was not given nor was any sale deed executed. The Assessing Officer found that the property was residential in nature and had not been put to use for the purpose of the assessing business. From these facts the Assessing Officer concluded that the Assessee had kept the property for four months or so and had entered into an agreement to dispose of the same which indicated a motive to earn short term gain and not any intention to use the property for the purpose of the business. He also noticed that the building cost ....