ADANI PORTS & SPECIAL ECONOMIC ZONE LTD.,AHMEDABAD V. THE JT.CIT (OSD), CIRCLE-(1)(2), AHMEDABAD

MA 52/AHD/2024

AI Insights

The case involves Adani Ports & Special Economic Zone Limited filing Miscellaneous Applications against the common order of the Income Tax Appellate Tribunal, Ahmedabad, which dismissed their appeal on the grounds of depreciation on land development expenditure for several assessment years. The Tribunal's original decision was based on the premise that the assessee did not challenge the disallowance of depreciation in the initial assessment year (2011-12), and thus could not raise the issue in subsequent years. The assessee contested this interpretation, claiming that the issue was indeed raised in the earlier year. However, the Tribunal found no merit in the assessee's argument and dismissed the applications.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711621 (ITAT-AHMEDABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: DHRUNAL BHATT
• Keywords: Revenue expenditure; Depreciation

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER MA No.50/Ahd/2024 (In ITA No.319/Ahd/2020) Assessment Year: 2012-13 Adani Ports & Special Economic Zone Limited, Adani House, Nr. Mithakhali Six Roads, Navrangpura, Ahmedabad – 380 009 [PAN – AAACG 7917 K] Vs. The Joint Commissioner of Income Tax (OSD), Office of Pr. CIT-1, Ahmedabad. MA No.51/Ahd/2024 (In ITA No.446/Ahd/2020) Assessment Years: 2013-14 Adani Ports & Special Economic Zone Limited, Adani House, Nr. Mithakhali Six Roads, Navrangpura, Ahmedabad – 380 009 [PAN – AAACG 7917 K] Vs. DCIT, Circle – 1(1)(1), Ahmedabad. MA No.52/Ahd/2024 (In ITA No.44/Ahd/2021) Assessment Year: 2014-15 Adani Ports & Special Economic Zone Limited, Adani Corporate House, Shantigram, SG Highway, Nr. Vaishno Devi Circle, Khodiyar, Ahmedabad. [PAN – AAACG 7917 K] Vs. The Joint Commissioner of Income Tax (OSD), Circle – 1(1)(2), Ahmedabad. Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 2 of 8 MA No.53/Ahd/2024 (In ITA No.45/Ahd/2021) Assessment Year: 2015-16 Adani Ports & Special Economic Zone Limited, Adani Corporate House, Shantigram, SG Highway, Nr. Vaishno Devi Circle, Khodiyar, Ahmedabad. [PAN – AAACG 7917 K] Vs. DCIT, Circle – 1(1)(2), Ahmedabad. MA No.54/Ahd/2024 (In ITA No.46/Ahd/2021) Assessment Year: 2016-17 Adani Ports & Special Economic Zone Limited, Adani Corporate House, Shantigram, SG Highway, Nr. Vaishno Devi Circle, Khodiyar, Ahmedabad. [PAN – AAACG 7917 K] Vs. ACIT, Circle – 1(1)(1), Ahmedabad. (Appellants) (Respondents) Assessee by Shri Dhrunal Bhatt, AR Revenue by Shri Abhijit, Sr. DR Date of Hearing 18.07.2025 Date of Pronouncement 23.07.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: These five Miscellaneous Applications are filed by the assessee against the common order of the Tribunal in ITA Nos.319/Ahd/2020, Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 3 of 8 446/Ahd/2020, 44/Ahd/2021, 45/Ahd/2021 & 46/Ahd/2021 dated 30.11.2023 for the Assessment Years 2012-13, 2013-14, 2014-15, 2015- 16 & 2016-17 respectively. 2. We will take M.A. No.50/Ahd/2024 for the A.Y. 2012-13 as the lead case. 3. Shri Dhrunal Bhatt, Ld. AR of the assessee explained that common issue involved in these Miscellaneous Applications was the observation of the Tribunal as given in paragraph no.7 of the Order dated 30.11.2023. He explained that while deciding the appeal in ITA No.319/Ahd/2020 for the A.Y. 2012-13, the Ld. Tribunal had observed that the assessee did not challenge the finding of the Ld. CIT(A) on the issue of depreciation in respect of land development expenditure incurred on lease hold land in the A.Y. 2011-12. On this basis, the ground raised in the current year was dismissed. The Ld. AR explained that the assessee had raised this ground in the A.Y. 2011-12 and, therefore, the observation as made by the Ld. Tribunal was not correct. He, therefore, requested to expunge the findings in paragraph no.7 of the order wherein it was remarked that the addition of this ground was not challenged by the assessee in the earlier year. He further requested that the appeal may be recalled on this limited ground for re-adjudication. 4. Per contra, Shri Abhijit, Ld. Sr. DR submitted that the Tribunal may take a call on the issue after examining the facts of the case. 5. We have considered the request of the assessee. The finding as given in paragraph no.7 of the order dated 30.11.2023 is reproduced for the sake of clarity: - Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 4 of 8 “7. We have heard the rival contentions of both the parties and perused the materials available on record. The issue on hand first arose in the hands of the assessee in the assessment year 2011-12. In that assessment year, the assessee claimed the depreciation which was disallowed by the AO and subsequently the order of the AO was also upheld by the learned CIT-A. Against the finding of the learned CIT-A, the assessee did not challenge the same before the higher forum. Thus, the finding of the learned CIT-A reached the finality. Now, the controversy arises whether the issue relating to the depreciation can be raised by the assessee in the subsequent year without challenging the initial/ first assessment year as discussed above. The answer stands against the assessee. In simple words, the assessee in its own case has admitted the disallowance of depreciation and therefore the same cannot be agitated in the later years. Hence, the ground of appeal of the assessee is hereby dismissed.” 5.1 The above observation was given in the context of ground no.1 of the assessee which was as under: - “1. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding disallowance of depreciation for Rs.6,77,38,601 in respect of land development expenditure incurred on leasehold lands towards reclamation of land by the appellant on merits of the case. The CIT(A) has allowed technical ground of Appellant for entitlement of increased deduction u/s. 801AB of the Act on such disallowance and he ought to have also decided the issue on merits in favour of appellant.’ 5.2 The assessee had challenged the disallowance of the depreciation of Rs.6,77,38,601/- in respect of land development expenditure incurred on the lease hold land towards reclamation of the land. While adjudicating this ground, it was observed in para 4.1 of the order dated 30.11.2023 that land development expenditure incurred in the year under consideration was Rs.3.59 crores which was capitalized by the assessee and depreciation was claimed thereon. However, similar expenses was amortized in earlier years. Thus the assessee was found to be taking different stand for the same expenditure in different years. In was in this context that a finding was given in para 7. of the order that no such claim was made on this issue in A.Y. 2011-12. It was observed that “the Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 5 of 8 assessee claimed the depreciation which was disallowed by the Assessing Officer and subsequently the order of the AO was upheld by the Ld. CIT(A)”. It was further observed that “the finding of the learned CIT-A reached the finality” on this issue. Accordingly, it was held that the assessee cannot challenge the issue regarding depreciation in the subsequent year without challenging it in the initial/ first assessment year. 5.3 The contention of the assessee is that the issue of depreciation on land development expenditure was challenged in the A.Y. 2011-12 as well. The assessee had filed a copy of the order of the ITAT in ITA No.122/Ahd/2015 dated 29.03.2023 for the A.Y. 2011-12. The assessee had raised ground nos.5 & 6 pertaining to disallowance of depreciation on right to use lease hold land and disallowance of amortisation of value of the lease hold land in the A.Y. 2011-12. The grounds as raised by the assessee are reproduced below: - “5. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming disallowance of depreciation of Rs.1,54,11,254/- claimed by the appellant-company on \"right to use leasehold land\", being intangible asset eligible for grant of depreciation u/s.32 of the I.T. Act. 5.1 Without prejudice to above, even if the disallowance in respect of depreciation of Rs.1,54,11,254/- claimed by the appellant-company on \"right to use leasehold land\" is confirmed, the Hon'ble Tribunal may direct the Assessing Officer to increase the deduction claimed u/s.80- IAB to that extent. 6. On the facts and in the circumstances of the case, the learned CIT(A] erred in confirming disallowance of Rs.5,16,28,097/- claimed by the appellant-company towards amortization of the value of leasehold land development, which is in the nature of allowable revenue expenditure. 6.1 Without prejudice to the above, even if addition in respect of amortization of lease hold expenses of Rs.5,16,28,097/- is confirmed, the Hon’ble Tribunal may direct the Assessing Officer to increase the deduction u/s.80-IAB of the Act to that extent.” Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 6 of 8 5.4 The ground nos.5 & 5.1 in respect of depreciation on “right to use leasehold land” was allowed by the Tribunal. The ground nos.6 & 6.1 in respect of claim of “amortisation of the value of the leasehold land” was, however, not allowed in principle but the alternate claim of the assessee to consider it for deduction under Section 80-IAB of the Income Tax Act, 1961 was allowed. The finding as given in paragraph no.16 of the order is reproduced below :- “16. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the amortisation expenses are not available to the assessee as it was part of lease rent payment and, therefore, the plea of the assessee that eligible profit for computation of deduction under Section 80IAB should increase is acceptable. Hence, ground nos.6 and ground no.6.1 are allowed.” 5.5 So far as depreciation on “right to use leasehold land” held as intangible asset is concerned, there is no dispute. The same was allowed in the A.Y. 2011-12 as well in the subsequent assessment years. The dispute is in respect of treatment of land development expenditure. In the A.Y. 2011-12 the assessee had claimed amortisation of Rs.5,16,28,097/- of this expense which was not allowed but the alternate claim of deduction under Section 80IAB of the Act was admitted. In the current year, i.e. A.Y. 2012-13, however, the assessee had claimed depreciation of Rs.6,77,38,601/- in respect of land development expenditure. It was in respect of this claim that the observation was made in paragraph no.7 of the order dated 30/11/2023 that the assessee did not challenge the disallowance of depreciation on land development expenditure in the A.Y. 2011-12. From the grounds taken by the assessee in the A.Y. 2011-12 as reproduced earlier, it is evident that there was no ground pertaining to depreciation on land development expenditure. Considering this fact, we do not find any mistaken in the order of the Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 7 of 8 Tribunal dated 30.11.2023. It was rightly observed that the assessee did not challenge the issue of depreciation on land development expenditure in the A.Y. 2011-12. This fact is found to be correct from the grounds as raised by the assessee in the A.Y. 2011-12. In that year, the assessee had challenged the issue of amortisation of the expenses and there was no ground in respect of depreciation for land development expenditure. We, therefore, do not find any mistake in the order of the Tribunal. Therefore, Miscellaneous Application filed by the assessee is dismissed. 6. The issue involved in other A.Ys., i.e. A.Ys. 2013-14 to 2016-17, is identical. Therefore, Miscellaneous Application Nos.51 to 54/Ahd/2024 taken by the assessee are also dismissed. 7. In the result, all the Miscellaneous Applications filed by the assessee are dismissed. Order pronounced in the open Court on this 23rd July, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 23rd July, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File Printed from counselvise.com MA Nos.50 to 54/Ahd/2024 (Assessment Years: 2012-13 to 2016-17) Adani Ports & Special Economic Zone Limited vs. JCIT(OSD)/DCIT/ACIT Page 8 of 8 By order TRUE COPYE C Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "