AI Drafter 
TaxTMI 
TaxTMI 
2018 (8) TMI 2037
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the assessee is that "right to collect toll" is as intangible asset and hence, the assessee is entitled to claim depreciation on same as per law. The Assessing Officer instead allowed amortization of development cost of infrastructure over the remaining period of toll concessionaire agreement. Aggrieved by the assessment order dated 06-01-2015, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by placing reliance on the decision of Tribunal in assessee's sister concerns Ashoka Info Pvt. Ltd. in ITA No. 44/PN/2007 decided on 31-12-2008 and Ashoka Bridgeways in ITA No. 686/PN/2012 decided on 29-04-2013 allowed assessee's claim of depreciation @ 25% on "right to collect toll". Against the findings of Commissioner of Income Tax (Appeals), the Revenue is in appeal before the Tribunal by raising following grounds "1) On the facts & circumstances of the case and in law the Ld. CIT(A) has erred in allowing the depreciation @ 25% of Rs. 6,53,90,973/- as claimed by the assessee on "License to collect toll". 2) On the facts & circumstances of the case and in law whether the Ld. CIT(A) was justified in holding that a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity, the underlying asset that has come into existence by spending on construction of road is the 'right to collect toll' and since this right is bestowed on respondent by issue of the said notification under a statute, it is in the nature of 'licence'. Hence, in accounts as well for income tax, the expenses incurred on construction of road were capitalized under the head 'Licence/Right to Collect Toll'. Further, by use of the right to collect toll, revenue stream of toll collection is earned in the business of appellant. Moreover, this right is transferable and respondent raised project loan, on the security of this right as well as loan on the securitization of future toll collection (Page Nos. 07-14). Thus, the right of toll collection, acquired by the respondent, on issue of Government Notification, is the valuable commercial right. Hence, the licence/right to collect toll, being intangible in nature, respondent considered cost incurred to acquire it as 'Intangible Asset', under income tax, as envisaged u/s 32( l)(ii) and claimed depreciation there on @25%, amounting to Rs. 6,53,90,973/- in the year under appeal. However, the A.O. has re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the issue raised in the appeal by the Revenue is identical to the one decided by the Co-ordinate Bench of the Tribunal in assessee's own case in ITA No. 239/PN/2012 for assessment year 2008-09 decided on 30-04-2013 and in the case of assessee's sister concerns M/s. Ashoka Highways in ITA No. 1629/PUN/2016 and ITA No. 1630/PUN/2016 decided on 08-06-2018. 5. We have perused the written submissions filed on behalf of the assessee and have heard the submissions made by ld. DR. We have also perused the orders of the authorities below. The Commissioner of Income Tax (Appeals) has allowed depreciation on "right to collect toll" by following the order of Tribunal in assessee's sister concerns. We observe that the Co-ordinate Bench of the Tribunal in assessee's own case DCIT Vs. Ashoka DSC Katni Bypass Road P. Ltd. in ITA No. 239/PN/2012 decided on 30-04-2013 allowed depreciation to the assessee on "right to collect toll". The relevant extract of the findings of Tribunal are as under : "4. We have heard the parties and perused the record. So far as the basic facts are concerned, there is no dispute. We find that in the opinion of the Assessing Officer the right of collection of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lity. 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)(ii) 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 referred to in section 32(1)(ii) of the Act for the reason that the agreement with the Government of Madhya Pradesh only allowed the assessee to recover the costs incurred for constructing the road facility whereas section 32(1)(ii) of the Act required that the assets mentioned therein should be acquired by the assessee after spending money. The said argument in our view is factually and 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 i....