TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1365
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....on 253(3) of the Act, the assessee was required to file appeal within 60 days from the date of receipt of order. However, the assessee filed appeal, for the year under consideration, on 31/03/2021, while the Revenue filed the appeal on 30/12/2021. We find that the Hon'ble Supreme Court, vide order dated 10/01/2022, passed in M.A. no.21 of 2022, in M.A. no.665 of 2021, in Suo-Motu Writ Petition (Civil) no.3 of 2020, directed that the period from 15/03/2020 till 28/02/2022, shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial and quasi judicial proceedings. As the due date for filing present cross appeals was falling within the aforesaid time-period, in view of the order passed by the Hon'ble Supreme Court, there is no delay in filing the present cross appeals and we proceed to decide the same on merits. ITA No. 483/Mum/2021 Assessee's Appeal - A.Y. 2012-13 3. In this appeal, the assessee has raised following grounds: "The following grounds of appeal are distinct and separate and without prejudice to each other: 1. On the facts and in the circumstances of the case and in law, the Learned Commis....
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....ip rights or entitlement in the said road to become entitled for any claims vested with the owners only. It was further held that once the ownership itself is held to be not available with the assessee, the alternative claim regarding treatment of the toll roads as plant and machinery becomes infructuous. However, the AO allowed the amortisation of expenses for the period of concession agreement as was done in the assessment years 2007-08 to 2012-13 and accordingly, allowed deduction on account of amortisation at INR 16,23,69,017. Further, the claim of assessee of depreciation at INR 24,92,05,344 on toll road was disallowed. 5. In appeal, learned CIT(A) vide impugned order dated 13/08/2020, upheld the conclusion of the AO in disallowing depreciation on roads by treating the same as 'plant and machinery' or 'building'. However, the learned CIT(A) accepted the alternative plea of the assessee and allowed the depreciation on roads treating the assessee as owner of the 'right to collect toll', which is an 'intangible asset' on which depreciation is allowable under section 32 of the Act, by following the decision of coordinate bench of Tribunal in assessee's own case for assessment yea....
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.... the appellants own case but restrict the depreciation so allowed to the amount actually claimed by the appellant in the return of income. This ground of appeal of the appellant to allow depreciation on road under the asset category "Intangible asset" is allowed subject to the direction as above: Being aggrieved, the assessee is in appeal before us. 6. During the course of hearing, learned Authorised Representative ('learned AR') submitted that depreciation is allowable on block of assets at the rate applicable and tax can be collected only as provided under the Act. 7. On the other hand, learned Departmental Representative ('learned DR') vehemently relied upon the orders passed by the lower authorities and submitted that relief more than what was claimed by the assessee in the return of income cannot be allowed. 8. We have considered the rival submissions and perused the material available on record. The only grievance of the assessee is against restricting the rate of depreciation to 15%, as claimed in the return of income, against 25% allowable in case of intangible assets. In the present case, the assessee entered into an agreement on 22/03/2005, with NHAI for construction ....
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....e, which as noted above was subsequently modified following the change in legal position, cannot be held to be the basis for denying the deduction of depreciation at the rate of 25%, i.e. the rate of depreciation applicable in case of intangible assets. From the record, it is evident that it is not the case where the Revenue is alleging that rate of depreciation in case of intangible assets is 15% instead of 25% as claim by the assessee. Thus, once the right to collect the toll tax has been held to be intangible asset by the learned CIT(A), by following the judicial precedents in assessee's own case, we are of the considered view that the learned CIT(A) erred in denying deduction of depreciation at the rate of 25% and restricting the same to 15% by referring to the claim made under the return of income. We are further of the view that once asset has been characterised under the particular head i.e., 'intangible asset' in the present case, all the other consequences including the rate at which depreciation is allowable under the law follows. Therefore, in view of the above, we direct the AO to grant depreciation on toll road at the rate applicable in case of intangible assets i.e. a....
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....artly, 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 effect which means it slowly will depreciate to the nil value. As per the provisions of the Income Tax Act, especially under section 32(1)(ii), the assessee is entitled to claim of depreciation on such type of rights. Such rights have been described as intangible assets under the Act and are eligible for claim of depreciation. 28. In view of the express provisions of the Act, we have no doubt to hold that the assessee is entitled to collect tax being an intangible commercial right under section 32(1)(ii) at the rate as has been prescribed under the relevant ru....
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....torists 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 concluding that the impugned 'Right to collect Toll' was an 'intangible asset' eligible for claim of depreciation @ 25% as per sec. 32(1)01) of the Act. 10. We have carefully considered the rival submissions. Factually speaking, there is no dispute to the fact that the costs capitalised by the assessee under the head 'License to collect Toll' have been incurred for development and construction of the infrastructure facility, i.e., Dewas Bypass Road. It is also not in dispute that the assessee was to build, operate and transfer the said infrastructure ....
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....ess. 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 Toll', being an 'intangible asset' falling with the scope of Section 32(1)(ii) of the Act is liable to be upheld. We hold so. 8. In so far as the reliance placed by the CIT(A) on the judgement of the Hon'ble Bombay High Court in the case of Techno Shares And Stocks Ltd. (supra) is concerned it may only be noted that the said judgement has since been altered by the Hon'ble Supreme Court vide its order reported at (2010) 327 ITR 323 (SC). Accordingly, in view of the aforesaid discussion, we hereby allow the Ground of Appeal No. 1.1 raised by the assessee." 29. In view of o....
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....ature and has been decided by the coordinate bench of the Tribunal in assessee's own case for preceding assessment years. Thus, respectfully following the aforesaid judicial precedents, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, ground No. 1 raised in Revenue's appeal is dismissed. 15. The issue arising in ground No. 2, raised in Revenue's appeal, is pertaining to taxability of interest income. 16. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the year under consideration, the assessee earned interest of Rs.1,56,61,845, on fixed deposit, which was made out of the toll revenues earned and offered the same to tax under the head 'business income'. The AO vide order passed under section 143(3) of the Act, without giving any specific findings, treated the interest income as 'income from other sources', while computing the total income of the assessee. 17. The learned CIT(A) vide impugned order, by following the decisions rendered in assessee's own case by its predecessor as well as by the coordinate bench of the Tribunal in preceding assessment years, allowed the appeal filed by....
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....ank as required under the 'Common Loan Agreement' upon which the bank has lien has been accepted as 'business income' in the earlier assessment years 2007-08 & 2008-09 by the Ld. CIT(A) which findings have been further upheld by the Tribunal vide orders dated 27.2.2013 for A.Y. 2007-08 (supra) and order dated 5.4.2013 for A.Y. 2008-09. From the above submissions of the assessee, it is apparent on the record that the interest income has been earned by the assessee on the security deposits with the bank as per the Common Loan Agreement as discussed above. The said interest income had been earned by the assessee out of business compulsions of deposits in the 'Debit Service Reserve Account', hence the said interest income is linked to the business activities of the assessee. The issue is covered with the decisions of the Tribunal in the own case of the assessee for earlier assessment years. Hence, the interest income of the assessee is ordered to be assessed as Business Income. Ground No.1 of the Revenue's appeal is therefore dismissed." 20. We find that the aforesaid decision was challenged by the Revenue before the Hon'ble jurisdictional High Court in PCIT vs M/s West Gujarat Expres....