TaxTMI 
TaxTMI 
2025 (7) TMI 1497
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....6) of the Act arising out of orders dated 08.06.2017 by Additional CIT, New Delhi under Section 143(3) r.w.s. 263 of the Act for assessment years 2012-13 and 2013-14 respectively. 2. All four appeals heard together, for the sake of convenience, are being disposed of by this common order. 3. Brief facts of case through ITA No. 3389/Del/2017 are that appellant/assessee filed its return of loss on 30.09.2012 declaring total loss at Rs. 131,96,47,940/- for assessment year 2012-13. The case was selected for scrutiny under CASS. Notice under Section 142(1) of the Act dated 01.10.2014 was served on Assessee. Shri Rajesh Bansal, CA/AR for the assessee furnished details. The assessee company is a joint venture company promoted by Ircon International Ltd. and Soma Enterprises Ltd. engaging business activity to build, operate and transfer Pimpalgaon to Dhule Section of national highway-3 against which it collects toll charges from the vehicles passes by. In the details filed, total loss was assessed at Rs. 131,96,47,940/-. On completion of assessment proceedings, Ld. AO vide order dated 12.11.2014 gave credit of prepaid taxes and charge interest under Section 234B and 234C of the Act. ....
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.... Hon'ble ITAT special bench, Hyderabad in the case of ACIT vs.M/s Progressive Constructions Ltd., 2017-TIOL-168-ITATHyd- SB. c) The Ld. Pr. CIT has grossly erred on facts as well as in law in ignoring the legal position that even if two views are possible, section 263 cannot be invoked. 3. a) The Ld. Pr. CIT has grossly erred on facts as well as in law in directing the AO to disallow the depreciation of Rs. 205,20,77,794/- on toll road. b) The Ld. Pr. CIT has grossly erred on facts as well as in law in holding that CBDT Circular no. 09/2014 dated 23/4/2014 has retrospective effect though the circular does not say so. c) The Ld. Pr. CIT has grossly erred on facts as well as in law in rejecting the judgment of Hon'ble ITAT Special Bench, Hyderabad, by holding that it has not considered the circular though it has been clearly discussed in para no. 19 and 20 of the judgment. d) The Ld. Pr. CIT has grossly erred on facts as well as in law in holding that the appellant is not the deemed owner of the toll road. 4. The Ld. Pr. CIT has grossly erred on facts as well as in law in directing the Ld. AO to reduce negative grant of Rs....
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.... in law in confirming the assessment order passed by the Ld. AO which is ex-facie illegal, arbitrary and without jurisdiction being against the principles of natural justice and against the provisions of IT Act, 1961. 2. The Ld. CIT(A) has grossly erred on facts as well as in law in holding that the there is no infirmity in the order passed by Ld. AO inspite of the fact that the Ld. AO had issued notice u/s 143(2) which is ex-facie illegal, arbitrary and without jurisdiction as the assessment order was not set aside u/s 263 and hence the notice u/s 143(2) as well as the consequential assessment u/s 143(3) / 263 needs to be annulled. 3. The Ld. CIT(A) has grossly erred on facts as well as in law in confirming the assessment order u/s 143(3)/263 which is beyond the direction issued u/s 263 and hence being ex-facie illegal, arbitrary and without jurisdiction, needs to be annulled. 4. The Ld. CIT(A) has grossly erred on facts as well as in law in not quashing the penalty notice u/s 271(1)(c) for which there was no direction u/s 263. 5. The appellant craves leave to add, alter, modify and withdraw any grounds before or during the course of appellate p....
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....has been developed under BOT scheme and the concession agreement was entered into with National Highway Authority of India on 28/09/2005. Under the concession agreement, the assessee is entitled to collect toll charges from the users for a period of 20 years and thereafter hand over the project to NHAI. 10.1 The assessee has claimed depreciation @ 25% amounting to Rs. 205,20,77,794/-on the opening WDV plus capital expenditure incurred during the year on built, operate and transfer road project. In fact, the project became partly operational in A. Y. 2010-11. The assessee has claimed depreciation @ 25% right from A. Y. 2010-11and the department has allowed the same after due deliberations. During this year also, the Ld. AO allowed the depreciation following the principle of consistency as enunciated by the Hon'ble Supreme Court in the case of Radhasoami Satsang vs. CIT, 193 ITR 321 (SC). There is no change in facts during this year. Order u/s 263 is illegal 10.2 The Pr.CIT, in the show cause notice, has mentioned that the assessment order is erroneous in so far as it is prejudicial to the interest of the revenue. However the Pr. CIT, in the order u/s 263, has no where h....
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....ed that provision of section 10A and 10AA of the Act were deduction provision though they are part of Chapter-III of the Act. In the light of the debate that existed when the order of the assessment was framed and when the impugned order u/s 263 of the Act was passed, it cannot be said that the view taken by the AO was an erroneous view. In fact the view taken by the AO was a possible view supported by decisions of courts. It cannot therefore be said that there was either incorrect assumption of fact or incorrect application of law so as to invoke the provision u/s 263 of the Act..." 10.5 Section 263 cannot be invoked if there are two views in the matter, one held by the Ld. AO and the other by the Ld. Pr. CIT. As regards depreciation, one view is that which was taken by Ld. AO and duly supported by Hon'ble ITAT, special bench, Hyd and the other is the one taken by the Ld. Pr. CIT. The other issue u/s 263 is that the appellant has included the negative grant of Rs. 595 crore which is to be paid to NHAI (from 15th year) to the cost of the asset which the Ld. Pr. CIT has asked the AO to delete inspite of the fact that the appellant is following mercantile system of accounting.....
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....14, it is clearly mentioned that in earlier years depreciation allowed is not to be withdrawn. Further, by now it is judicially settled that CBDT circular does not have retrospective effect. 10.7 The assessee has included the negative grant of Rs. 595 crore which is to be paid to NHAI (from 15th year) to the cost of the asset which the Ld. Pr. CIT has asked the ITO to delete. The assessee is following mercantile system of accounting and therefore, has to account for all the liabilities which have accrued. The liability is duly ascertained and clearly mentioned in the concession agreement vide para 23.1. Therefore, negative grant is the part of cost of project because the cost of project is total expenditure incurred or to be incurred by the assessee. The liability has accrued in the year of completion of project, i.e., A. Y. 2012-13 subject to payment in subsequent years. 10.8 It is very clear from the Concession Agreement that the amount is a fixed one. There is no stipulation in the agreement for any change in this amount, therefore, this is an ascertained liability which in fact accrues as soon as the project is completed and becomes fully operational. Hence, the appellant....
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....ii) of the Act, are only those which are owned by the assessee and have been acquired after spending money. In the case of the assessee, by way of an agreement, assessee was awarded a work to construct a road by using own funds and the expenditure incurred was allowed to be reimbursed by permitting the assessee a concession to collect toll/fees from the motorists 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. The issue has also been adjudicated in favour of the Revenue in the case of CIT vs. West Gujarat Expressway Ltd (Supra) whereas the learned ITA Nos 1729 2145 and 2146 of 2018. 19. From examination of record in light of aforesaid rival contention it is crystal clear that assessee has challenged disallowance of depreciation claim @ 25% on the Road Construction Project in view of the CBDT Circular No. 9/2014 dated 23.04.2014. 20. The rights under BOT projects have been considered to be intangible assets in judgment of Special Bench of ITAT Hyderabad in ACIT Hyderabad M/s. Progressive Construction Limited, Hyderabad, ITA No. 214/Hyd./2014 reported as [2018] 63 ITR 516 (Hyd.) wherein, while....