2025 (7) TMI 1676

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....ned company of Government of Kerala. It is engaged in the business of building commercially viable infrastructural facilities for KSRTC. The Return of Income for the AY 2018-19 was filed on 05/10/2018 disclosing an income of Rs. 18,58,61,725/-. However, disclosed book profits U/s. 115JB of the Act at Rs. 1,19,35,132/-. Against the said return of income, the assessment was completed U/s. 143(3) r.w.s 143(3A) & 143(3B) of the Act vide order dated 23/03/2021 accepting the returned income. Subsequently, on review of the assessment record, the Ld. PCIT, Trivendrum, formed an opinion that the assessment order erroneous and prejudicial to the interests of the Revenue for the reasons that the AO accepted the following two claims without any verific....

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.... consonance with the settled position of law and there cannot be two opinions on the issues. 7. On the other hand, Ld. CIT-DR vehemently opposed the above submissions of the appellant and submits that the decision of the Hon'ble Delhi High Court in the case of Sharp Business Systems vs. CIT, 254 CTR 0233 wherein it was held that in the absence of ownership of asset on which depreciation is claimed, depreciation cannot be allowed as a deduction. 8. We heard the rival submissions and perused the material available on record. The Parliament had conferred the power of revision on the Commissioner of Income Tax U/s. 263 of the Act in case the assessment order passed is erroneous and prejudicial to the interests of revenue. In order to invo....

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....struction of the projects and the cost is recovered in the form of collection of the rent from the Shopping Complexes. The cost incurred by the appellant company to construct the BOT projects is treated as a cost of intangible assets and claimed depreciation thereon @ 25% U/s. 32 of the Act. The claim was allowed by the AO in the assessment made U/s. 143(3) of the Act. Now the question that comes up for our consideration is whether the "Right to Collect Toll" falls within the definition of "commercial right" or "intangible asset"?. The ITAT (Special Bench), Hyderabad in the case of ACIT vs. Progressive Constructions Ltd [2018] 92 taxmann.com 104 took a view that "Right to Collect Toll" falls within the definition of "commercial right" to in....

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....'ble Bombay High Court in the case of CIT vs. West Gujarat Expressway ltd [2017] 390 ITR 398 (Bom.) took a view that the assessee is not entitled for depreciation on the assets not owned by the assessee by following its earlier decision of North Karnataka Expressway Ltd vs. CIT [2014] 372 ITR 145 (Bom.). 11. The above discussion clearly brings out that it is a highly debatable issue, as there is cleavage of judicial opinion amongst various High Courts. Therefore, it cannot be said that the assessment order is erroneous. Therefore, the Ld. PCIT was not justified in exercising the power of revision in respect of the item of allowing depreciation and 'right to collect toll' treating it as an intangible asset @ 25%. 12. The next item that....