DCIT, Circle-3(1), Hyd, Hyderabad V. Rewa Tollway Pvt.Ltd., Hyd, Hyderabad

ITA 141/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6223 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Depreciation
• Section: 32; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.141/HYD/2016 ASSESSMENT YEAR 2008-2009 THE DCIT, CIRCLE - 3(1) HYDERABAD. VS. M/S. REWA TOLLWAY (P) LTD., HYDERABAD. PAN AACCR3389Q (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. G. APARNA RAO FOR ASSESSEE : MR. V. RAGHAVENDRA RAO DATE OF HEARING : 26.09.2016 DATE OF PRONOUNCEMENT : 26.09.2016 ORDER PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-3, HYDERABAD AND IT PERTAIN S TO THE A.Y. 2008-09. THE FOLLOWING GROUNDS WERE URGED BEFO RE US : 1. LD. CIT(A) ERRED ON BOTH LAW AND FACTS OF THE CASE . 2. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE O F DEPRECIATION U/S 32 OF THE ACT, TO THE TUNE OF RS.9,12,19,978/-. 3. THE LD. CIT(A) ERRED IN ALLOWING DEPRECIATION U/S 3 2 OF THE ACT TO THE ASSESSEE, ON THE ASSET WHICH IS FIRST CO NSTRUCTED ON THE LAND OWNED BY THE GOVERNMENT OF INDIA AND SECONDLY WHERE THE INFRASTRUCTURE FACILITY IS NEVER OWNED BY THE ASSESSEE COMPANY. 4. THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE O F RS.28,35,516/- BEING THE EXPENDITURE NOT RELATED TO THE IMPUGNED ASSESSMENT YEAR, IGNORING HER OWN FINDING THAT EXPENDITURE IS RELATED TO EARLIER ASSESSMENT YEARS. 2 ITA.NO.141/HYD/2016 M/S. REWA TOLLWAY (P) LTD., HYDERABAD. 5. ANY OTHER GROUND(S) THAT MAY BE URGED AT THE TIME O F HEARING. 2. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THAT GROUND NOS. 1 AND 5 ARE GENERA L IN NATURE AND GROUND NOS. 2 AND 3 PERTAIN TO THE ELIGIBILI TY OF DEPRECIATION UNDER SECTION 32 OF THE ACT TO THE TUNE OF RS.9,12,19,978 AND GROUND NO.4 IS WITH REGARD TO DEL ETION OF DISALLOWANCE OF RS.28,35,516. AS COULD BE NOTICED FR OM THE ORDER PASSED BY THE LD. CIT(A), THE CASE OF THE ASSESSEE WAS THAT IT HAD EXCLUSIVE RIGHT, OVER THE ROADS CONSTRUCTED AS LICENSE E FOR A PERIOD OF 5440 DAYS, TO CONSTRUCT AND MAINTAIN WITHOUT A NY INTERRUPTION AND TO COLLECT FEES FROM THE VEHICLES USING THE HIGHWAY AND HENCE, IT HAS RIGHT TO CLAIM DEPRECIATION. IT WAS ALSO CONTENDED THAT THE WORD BUILDING INCLUDES ROADS, BRID GES, CULVERTS ETC., AND THE ITAT B BENCH, HYDERABAD IN TH E CASE OF NYSC INFRASTRUCTURE LTD., (ITA.NO.301/HYD/2009) HAD TAK EN A VIEW THAT AN ASSESSEE WHO LAID ROAD-WAYS IS ELIGIBLE TO CLAIM DEPRECIATION, BY TREATING IT AS BUILDING. ASSESSEE RELI ED UPON THE DECISIONS OF NOT ONLY ITAT HYDERABAD BENCH BUT ALSO OTHER FORUMS TO CONTEND THAT ROADS/HIGHWAYS CONSTRUCTED BY AN ASSESSEE ON BUILT, OPERATE AND TRANSFER (BOT) BASI S SHOULD BE TREATED AS AN ASSET OF THE ASSESSEE ON WHICH DEPRECIATI ON IS ALLOWABLE. IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT IN THE SCRUTINY ASSESSMENT PROCEEDINGS FOR THE A.YS. 2 005-06 AND 2008-09 AS WELL AS FOR THE LATER A.Y. I.E., 201 2-2013 THE ASSESSING OFFICER ACCEPTED THE VIEW OF THE ASSESSEE. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT, HYDERABAD BENCH AS WE LL AS OTHER DECISIONS CITED BEFORE HIM, APART FROM THE FACT THAT THE ASSESSING OFFICER IN THE SCRUTINY ASSESSMENTS HAD ACC EPTED THE 3 ITA.NO.141/HYD/2016 M/S. REWA TOLLWAY (P) LTD., HYDERABAD. PLEA OF THE ASSESSEE, THE LD. CIT(A) HELD THAT ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION, ON ASSETS, WHICH ARE ROADS CONS TRUCTED BY IT ON BOT BASIS. 3. THE LD. D.R. COULD NOT PLACE ANY CONTRARY DECISIO N ON THIS ASPECT. 4. CONSISTENT WITH THE VIEW TAKEN IN ASSESSEES OWN CA SE FOR THE EARLIER ASSESSMENT YEARS AND ALSO IN THE LIGHT OF SEVERAL DECISIONS OF THE ITAT, HYDERABAD BENCHES, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS GROUND NOS. 2 AND 3 OF THE REVENUE. 5. AS REGARDS GROUND NO.4 OF THE REVENUE, THE UNDISPUTED FACTS, AS BROUGHT OUT BY THE LD. CIT(A) ARE AS UNDER : 7.1 WITH REFERENCE TO GROUND NO.2 (F) & (G), THE DETAILS ARE, THE APPELLANT COMPANY AVAILED FINANCES FROM A CONSORTIUM OF LENDING AGENCIES INCLUDING M/S SREI INFRASTRUCTURE FINANCE LIMITED WHICH ACTED AS AN AG ENT FOR COORDINATION AMONGST FINANCIAL INSTITUTIONS. FOR RE NDERING SUCH SERVICES, M/S SREI INFRASTRUCTURE FINANCE LIMI TED CHARGED THE APPELLANT WITH AN AMOUNT OF RS.40,44,96 0. THE ENTIRE AMOUNT WAS PAID AFTER DEDUCTING TDS IN THE F .Y. 2007-08 WAS CLAIMED AS EXPENDITURE. HOWEVER, THE A. O. DISALLOWED AN AMOUNT OF RS.28,35,516 ON THE GROUND THAT PART OF THE FEES PERTAIN TO EARLIER YEARS, I.E. F.Y .2005-06 & 2006-07. 7.2. IT WAS EXPLAINED BY THE APPELLANT THAT M/S SR EI INFRASTRUCTURE FINANCE LIMITED RAISED THE BILL IN F .Y.2007-08, NO PROVISION WAS MADE IN EARLIER YEARS SINCE IT HAD NOT RECEIVED ANY BILL FROM M/S SREI INFRASTRUCTURE FINA NCE LIMITED. THE APPELLANT RELIED ON THE DECISION OF SA URASTRA CEMENT & CHEMICAL INDUSTRIES LIMITED VS CIT (213 IT R 523) WHEREIN IT WAS HELD THAT ANY LIABILITY THOUGH RELAT ING TO EARLIER YEARS, SHOULD BE ALLOWED DEPENDING ON MAKIN G SUCH DEMAND AND ITS ACCEPTANCE BY THE ASSESSEE. 4 ITA.NO.141/HYD/2016 M/S. REWA TOLLWAY (P) LTD., HYDERABAD. 7.3. THERE IS NO DISPUTE REGARDING PAYMENT OF FEES TO M/S SREI INFRASTRUCTURE FINANCE LIMITED OF RS.40,44 ,960. THERE IS ALSO NO DISPUTE REGARDING THAT RS.28,35,51 6 PERTAIN TO F.Y.2005-06 & 2006-07. THE APPELLANT SUBMITTED C OPIES OF BILLS RAISED BY M/S SREI INFRASTRUCTURE FINANCE LIM ITED DATED 22-09-2007 WHEREIN IT IS CLEARLY MENTIONED TH AT THE FEE PERTAIN TO F.Y.2005-06 & 2006-07. EVEN IF THE ASSES SEE HAD CLAIMED IN THE EARLIER YEARS, THE SAME WAS NOT ALLO WABLE AS NO TDS WAS DEDUCTED. IN THE CURRENT YEAR, THE APPEL LANT PAID THE AMOUNT AFTER DEDUCTING THE TDS AND THE SAME SHO ULD BE ALLOWED IN ACCORDANCE WITH THE PROVISIONS OF SECTIO N 40(A)(IA). 6. THOUGH THE LD. D.R. SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER, THE FACTUAL MATRIX OF THE CASE IS NOT IN DISPUTE. UNDER THESE CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE CIT(A) AND REJECT GROUND NO.4 OF THE REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 .09.2016. SD/- SD/- (B. RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT HYDERABAD, DATED 26 TH SEPTEMBER, 2016 VBP/- COPY TO: 1. THE DCIT, CIRCLE-3(1), ROOM NO.714, 7 TH FLOOR, SIGNATURE TOWERS, OPP. BOTANICAL GARDEN, KONDAPUR, HYDERABAD. 2. M/S. REWA TOLLWAY P. LTD., H.NO.1-90/A, PLOT NO.20 & 21, RBI COLONY, MADHAPUR 500 081. 3. CIT(A)-3, HYDERABAD. 4. COMMISSIONER OF INCOME TAX-3, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, A BENCH, HYDERAB AD 6. GUARD FILE.