TaxTMI 
TaxTMI 
2021 (9) TMI 466
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....Rs. 7,24,75,114 claimed by assessee minus Rs. 3,89,00,000/- allowed by the Id. ACIT) considering that the deduction shall be allowed on the basis of amortization over the concessionaire period, 2. The Ld, ACIT has erred in applying the Circular No 09/2014 in Assessee's case for the AY 2012-13 in spite of fact that circular is effective from 23.04.201.4. 3. That Ld. ACIT has erred In initiating penalty proceedings u/s 271(l)(c) of the Income Tax Act, 1961." 3. During the assessment year under consideration the assessee is carrying on the business of constructing, operating and maintaining of toll roads for adequate connectivity to Vishakhapatnam port trust. The assessee company is a Public Sector undertaking (PSU) Su....
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....rofession. iii. In this case, land does not belong to the assessee. The Assessee is merely permitted to enter upon it for the purpose of construction and laying of a road. At best, the Assessee could be said to be an agent and for a limited purpose, namely, to build, operate and later on transfer the road. There is no question of the Assessee claiming any ownership rights. Therefore, the assessee is not eligible to claim and depreciation on the asset and depreciation was rightly disallowed by the AO. Reliance is placed on the decision of the Hon'ble Mumbai High Court in the case of North Karnataka Expressway Ltd ITA No 499 of 2012 (Date of order 14.10.2014) and in the case of West Gujrat Expressway Ltd ITA no 2357 of 2016 delivered....
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....velopment of infrastructure facility of roads/highways in earlier years, the total deduction so claimed for the Assessment Years prior to the Assessment Year under consideration may be deducted from the initial cost of infrastructure facility of roads/high ways and the cost so reduced shall be amortized equally over the remaining period of toll concession agreement. Thus, the Circular itself explains that it is applicable from the date of circular or for subsequent Assessment Years , assessee has to amortize the WDV of the asset over the remaining life of the asset as Circular has to be effective from the date it is notified. The Circular clearly mentioned that amortized over remaining period which means for balance period and not from the ....
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....ay be. 4.4. The jurisdictional High Court in the case of Moradabad Toll Company Ltd. I/s ACIT has held that depreciation is allowable on the toll road/bridges under Build-Operate-Transfer (BOT) arrangement @10%. The Hon'ble High Court of Allahabad in the of Noida Toll Bridge Co. Ltd. has also held that depreciation is allowable on road constructed by respondent assessee under the concession agreement at the same rate i.e. 10%. In any case, the eligibility of the appellant company for claim of depreciation is not disputed by the AO. He has allowed the same on the basis of amortization over the balance period of the concessional agreement relying on Board's Circular referred above. The critical question, therefore, ....