ACIT, CHENNAI V. M/s. L&T Western India Toll Bridge Ltd., CHENNAI

ITA 1325/CHNY/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68652 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-08-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 15-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Reopening of assessment; Depreciation
• Section: 143(3); 32; 148

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 1118/MDS/2012 ASSESSMENT YEAR 2002-03 M/S. L&T WESTERN INDIA TOLLBRIDGE LIMITED, POST BOX NO. 979, MOUNT POONAMALLEE ROAD, MANAPAKKAM, CHENNAI 600 089. [PAN : AAACL7084N] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(4), CHENNAI 600 034. (APPELLANT) (RESPONDENT) ITA NO. 1325/MDS/2012 ASSESSMENT YEAR 2002-03 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(4), CHENNAI 600 034. VS. M/S. L&T WESTERN INDIA TOLLBRIDGE LIMITED, POST BOX NO. 979, MOUNT POONAMALLEE ROAD, MANAPAKKAM, CHENNAI 600 089. (APPELLANT) (RESPONDENT) A SSESSEE BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE DEPARTMENT BY : SHRI T.N. BETGIRI, JCIT DATE OF HEARING : 06.08.2013 DATE OF PRONOUNCEMENT : 20.08.2013 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), III, CHENNAI DATED 12.03.2012 RELEVANT TO THE ASSESSMENT 2002-03. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1118 & 1325 1118 & 1325 1118 & 1325 1118 & 1325/M/ /M/ /M/ /M/12 1212 12 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION AND CONSTRUCTED OF A T WO LANE BRIDGE ACROSS RIVER WATRAK NEAR KHEDA VILLAGE IN GUJARAT UNDER TH E CONCEPT OF BUILD- OPERATE-TRANSFER SCHEME IN TERMS OF CONCESSION AGRE EMENT DATED 01.03.1999 ENTERED INTO WITH THE GOVERNMENT OF INDI A AND GOVERNMENT OF GUJARAT. IT FILED RETURN OF INCOME FOR THE ASSESSME NT YEAR UNDER CONSIDERATION ON 30.10.2002 ADMITTING LOSS OF ` .3,95,85,660/- AND BOOK PROFIT OF ` .1,30,01,118/- UNDER SECTION 115JB. THE RETURN WAS PROCESSED UNDER SECTION143(1) OF THE ACT AND THE CASE WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148 AND AFTER CONSIDERING THE OBJECTIONS, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S.147 OF THE ACT ON 01.09.2009 AND THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEPRE CIATION ON BRIDGES. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE LD. CIT(APPEALS). 4. THE LD. CIT(APPEALS), AFTER CAREFULLY EXAMININ G THE ISSUE, HAS HELD THAT THE ASSESSING OFFICER HAS VALIDLY REOPENED THE ASSESSMENT AND ASSESSEES OBJECTION AGAINST THE JURISDICTION OF TH E ASSESSING OFFICER TO REOPEN THE ASSESSMENT STANDS REJECTED. 5. ON BEING AGGRIEVED, THE ASSESSEE PREFERRED APPE AL BEFORE THE TRIBUNAL. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1118 & 1325 1118 & 1325 1118 & 1325 1118 & 1325/M/ /M/ /M/ /M/12 1212 12 3 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LOWER AUTHORITIES AND ARGUED THAT THE AS SESSING OFFICER HAS REOPENED THE ASSESSMENT WITHOUT JURISDICTION AND TH E ASSESSMENT IS TIME BARRED. 7. THE LD. DR HAS STRONGLY RELIED ON THE ORDERS OF AUTHORITIES BELOW. 8. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. REGARDING REOPENING OF ASSESSMENT, THE LD. CIT(APPEALS) HAS OBSERVED THAT INITIALLY TH E RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1). SUBSEQ UENTLY, BY ISSUING NOTICE UNDER SECTION 148, THE ASSESSMENT WAS COMPLE TED UNDER SECTION 143(3) R.W.S. 147 AND NO ORDER UNDER SECTION 143(3) WAS PASSED BY THE ASSESSING OFFICER. THEREFORE, WHEN THE ASSESSING OF FICER HAS PROCESSED THE RETURN FILED BY THE ASSESSEE UNDER SECTION 143(1), HE SHOULD HAVE BEEN CONSIDERED TO HAVE APPLIED HIS MIND AND COME TO A C ONCLUSION REGARDING GRANT OF DEPRECIATION. BY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ACIT V. RAJESH JHAVERI STOCK B ROKERS (291 ITR 500), THE LD. CIT(APPEALS) HAS REJECTED THE GROUND RAISED BY THE ASSESSEE. WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CI T(APPEALS) AND THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 9. SO FAR AS MERITS OF THE CASE IS CONCERNED WITH REGARD TO DEPRECIATION ON BRIDGES, THE LD. CIT(APPEALS), BY FOLLOWING ASSE SSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 HAS OBSERVED AS UNDER: I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1118 & 1325 1118 & 1325 1118 & 1325 1118 & 1325/M/ /M/ /M/ /M/12 1212 12 4 5. AS REGARDS THE ISSUE ON MERITS REGARDING GIANT OF DEPRECIATION ON BRIDGES, I FIND THAT THE ISSUE STANDS COVERED BY TH E DECISION OF THE ID. CIT (A) IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT Y EAR 2003-04 IN ITA NO. 401/11-12/A-IV DATED 16.09.2011 WHEREIN IT WAS HELD AS UNDER:- 5.1 I HAVE CONSIDERED THEIR ARGUMENTS, GROUNDS OF A PPEAL AND STATEMENT OF FACTS FIELD BY THE APPELLANT. THIS ISS UE, FACTS BEING THE SAME, IS COVERED BY THE DECISION OF THE HON'BLE ITA T IN THE CASE OF M/S L & T TRANSPORTATION INFRASTRUCTURE LTD IN I TA NO 1692 'A' BENCH, ITAT, CHENNAI; DATED 30.11.2000 AND M/S. T. N. ROAD DEVELOPMENT COMPANY- ITA NO. 2082/MDS/2008 C' BENC H DATED 24.10.2008. IN THESE DECISIONS, IT WAS DECIDE D THAT THE ASSESSEE COMPANY IS ENTITLED FOR DEPRECIATION @ 10% ON ROADS WHICH IS APPLICABLE AT THE RATE OF BUILDINGS, BUT N OT AT THE RATES APPLICABLE TO PLANT AND MACHINERY. 5.2 SO, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEPRECIATION @ 10% ON ROAD FOR THE FOLLOWING REAS ONS: A. IN THE CASE OF L & T TRANSPORTATION INFRASTRUCT URE LTD, THE ASSESSEE COMPANY WAS CLAIMING DEPRECIATION @ 10% ON 'ROAD' BUT NOT @ 25% (IN SIMILAR CIRCUMSTANCES). B. IN VIEW OF THE ABOVE CITED HON'BLE ITAT DECISIO N OF CHENNAI, THE APPELLANT CLAIMS THAT THEY ARE ENTITLE D TO BENEFIT UNDER SECTION 80LA. THE ASSESSING OFFICER IS DIRECT ED TO VERIFY WHETHER THE APPELLANT COMPANY SATISFIED THE CONDITI ONS AND TAKE ACTION ACCORDINGLY'. FOLLOWING THE DECISION OF THE CIT(A) IN THE APPELLA NTS OWN CASE, I HOLD THAT THE ASSESSEE IS ENTITLED TO DEPRECIATION @ 10% ON THE BRIDGES. THE AO IS DIRECTED TO ALLOW 10% ON ROADS AND BRIDGES. T HE GROUND IS PARTLY ALLOWED. 10. AS AGAINST THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL. 11. AT THE TIME OF HEARING, THE LD. COUNSEL FOR TH E ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL HAS ALREADY BEEN CONSIDERED BY THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1118 & 1325 1118 & 1325 1118 & 1325 1118 & 1325/M/ /M/ /M/ /M/12 1212 12 5 TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 IN I.T.A. NO. 1971 & 2105(MDS)/2011 VIDE ORDER DATED 22.11.2 012 AND HELD AS UNDER: 3. THE SECOND ISSUE RAISED BY THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN TREATING THE PR OJECT ASSET DEVELOPED BY THE ASSESSEE AS BUILDING, INSTEAD OF PLANT, AS CLAIMED BY THE ASSESSEE FOR THE PURPOSE OF DEPRECIATION UNDER SECT ION 32 OF THE INCOME- TAX ACT, 1961. IT IS TO BE SEEN THAT THE COMMISSION ER OF INCOME- TAX(APPEALS) HAS JUST FOLLOWED THE ORDER OF THE INC OME-TAX APPELLATE TRIBUNAL, A-BENCH, CHENNAI, RENDERED IN THE CASE OF M/S. L&T TRANSPORTATION INFRASTRUCTURE LTD. IN ITA NO.1692. IN FACT THE COMMISSIONER OF INCOME-TAX(APPEALS) WAS JUST FOLLOW ING THE ORDER OF THE TRIBUNAL IN ITA NO.1692 DATED 30-11-2010 AND AL SO ANOTHER ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, C-BENCH, CHENNAI , PASSED IN THE CASE OF M/S.T.N.ROAD DEVELOPMENT COMPANY, IN ITA NO.2082(MDS)/2008, DATED 24-10-2008. IN BOTH THESE DECISIONS THE TRIBUNAL HAS HELD THAT THE COMPANY IS ENTITLED FOR DEPRECIATION AT 10% ON ROADS, WHICH IS APPLICABLE TO BUILDINGS. THE TRI BUNAL HELD THAT THE ASSESSEE CANNOT CLAIM DEPRECIATION AT THE RATE APPL ICABLE TO PLANT AND MACHINERY. THEREFORE, WE FIND THAT THERE IS NO INFI RMITY IN THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) AND THIS GR OUND IS ALSO LIABLE TO BE REJECTED. 12. IN SO FAR AS REVENUES APPEAL IS CONCERNED, TH E TRIBUNAL HAS CONSIDERED THE ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003- 04 IN I.T.A. NO. 1971 & 2105(MDS)/2011 VIDE ORDER DATED 22.11.2012 AND HELD AS UNDER: 4. NOW, COMING TO THE APPEAL FILED BY THE REVENUE , THE GROUND IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ER RED IN ALLOWING THE DEPRECIATION CLAIM OF THE ASSESSEE ON PROJECT ASSET S AT THE RATE OF 10% APPLICABLE TO BUILDINGS. IT IS THE CASE OF THE REVE NUE THAT THE ASSESSEE IS NOT ENTITLED FOR ANY AMOUNT OF DEPRECIATION, AS THE ASSESSEE IS NOT THE OWNER OF THE ASSET BUILT IN BY IT. BUT, AS ALREADY POINTED OUT BY THE COMMISSIONER OF INCOME-TAX(APPEALS), THE TRIBUNAL H AS HELD IN SIMILAR CASES THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATIO N AT THE RATE OF 10%. THIS GROUND OF THE REVENUE, THEREFORE, FAILS. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1118 & 1325 1118 & 1325 1118 & 1325 1118 & 1325/M/ /M/ /M/ /M/12 1212 12 6 13. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER S UBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSES SEES OWN CASE. HE ALSO RELIED ON FOLLOWING CASE LAW: CIVIL CONSTRUCTION WHICH ACTS AS PLANT OR SPECIFIC CONSTRUCTION FOR SUPPORT OF PLANT IS ALSO PLANT. OPERATION THEATRE CIT V DR. B. VENKAT RAO 243 ITR 81 SC POWER GENERATION STATION BUILDING CIT V KARNATAKA POWER CORPORAT ION 247 ITR 268 SC BUILDINGS WITH ATMOSPHERIC CONTROL FOR PRODUCING SACCHARIN. R.C.CHEMICAL INDUSTRIES V CIT 134 ITR 330 DEL. SUPPORT STRUCTURES CIT V R.G. ISPAT LTD 210 ITR 1018 RAJ. ACIT V MADRAS CEMENTS LTD. 110 ITR 281 SC. WATER TANKS CIT V MODI I NDUSRIES LTD 197 ITR 517 DEL. ORE SHED CIT V AMOL DECALITE LTD. 286 ITR 648 GUJ. WATERWORKS ASSOCIATED CEMENT CO. LTD. V CIT 221 ITR 215 BOM. WET DOCKS CIT V MAZAGON DOCKS 191 ITR 460 BOM FILM STUDIO CIT V NAVODAYA 271 ITR 173 KER. DECISION OF THE PUNE ITAT IN THE CASE OF ASHOKA INF O (P) LTD V ACIT [2008] 123 TIJ 77 DECISION OF THE PUNE ITAT IN THE CASE OF DIMENSION CONSTRUCTION PVT LTD V DCIT (ITA NO 222,223,233 AND 857/ PN /2009) DECISION OF THE INDORE ITAT IN THE CASE OF KALYAN T OLL INFRASTRUCTURE LTD V CIT (ITA NO 201 AND 247 /IND /2008) 14. ON THE OTHER HAND, THE LD. DR HAS SUPPORTED TH E ORDER PASSED BY THE ASSESSING OFFICER. 15. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND ALSO GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AS WEL L AS TRIBUNAL ORDER. WE FIND THAT THE ISSUE INVOLVED IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE. THE LD. COUNSEL FO R THE ASSESSEE, WHILE RELYING ON VARIOUS CASE LAW ON DIFFERENT STRUCTURES , SUBMITTED THAT THE ASSESSEE HAS ALREADY CARRIED THE MATTER IN APPEAL B EFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE SAME IS ADMITTED. HOWEVER, NO ORDERS OF I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1118 & 1325 1118 & 1325 1118 & 1325 1118 & 1325/M/ /M/ /M/ /M/12 1212 12 7 ANY HIGHER COURT HAVE BEEN PLACED ON RECORD TO TAKE A DIFFERENT VIEW. IN VIEW OF THE ABOVE, WE RESPECTFULLY FOLLOWING THE DECISIO N OF THE TRIBUNAL IN ASSESSEES OWN CASE DISMISS THE GROUNDS RAISED BY B OTH ASSESSEE AND REVENUE. 16. IN THE RESULT, THE APPEALS FILED BY THE ASSESS EE AND REVENUE ARE DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 20 TH OF AUGUST, 2013 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 20.08.2013 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.