Deputy Commissioner of Income tax, V. M/s. Mahakaleshwar Tollways Pvt Ltd.,

ITA 2641/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4886 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-02-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 18-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: K VENKATACHALAM
• Keywords: Depreciation
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2641 /P U N/201 6 / ASSESSMENT YEAR : 20 1 1 - 12 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK ....... / APPELLANT / V/S. M/S. MAHAKALESHWAR TOLLWAYS PVT. LTD., 202 - A, MSJ HOUSE, 17/1 - SOUTH TUKOGANJ, INDORE 452001 PAN : AAFCM7676Q / RESPONDENT ASSESSEE BY : S HRI K. VENKATA CHALAM REVENUE BY : S HRI S.B. PRASAD / DATE OF HEARING : 0 6 - 02 - 2019 / DATE OF PRONOUNCEMENT : 11 - 02 - 2019 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 3 , PUNE DATED 29 - 07 - 2016 FOR THE ASSESSMENT YEAR 201 1 - 12. 2. THE SOLITARY ISSUE IN APPEAL IS : WHETHER THE ASSESSEE IS ELIGIBLE TO CLAIM DEPRECIATION ON LICENSE TO COLLECT TOLL CONSIDERING IT AS AN INTANGIBLE 2 ITA NO .2641/PUN/2016, A.Y. 2011 - 12 ASSET IN TERMS OF SECTION 32(1)(II) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS ENGAGED IN DEVELOPMENT AND CONSTRUCTION OF FOUR LANING OF INDORE - UJJAIN ROAD ON S.H. NO. 27 FROM CHAINAGE 5/2 A T INDORE TO CHAINAGE 53 AT UJJAIN ON BUILD, OPERATE AND TRANSFER (BOT) BASIS. THE ASSESSEE CLAIMED DEPRECIATION ON LICENSE TO COLLECT TOLL IN ITS RETURN OF INCOME. THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM HOLDING THAT NO INTANGIBLE ASSET HAS B EEN ACQUIRED BY THE ASSESSEE . IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE ORDER OF TRIBUNAL IN THE CASE OF M/S. ASHOKA INFRASTRUCTURE LIMITED VS. ACIT IN ITA NO. 989/PUN/2010 ALLOWED DEPRECIATION TO THE ASSESSEE , HOLDING THAT TH E RIGHT TO COLLECT TOLL ACQUIRED BY ASSESSEE IS A DEPRECIABLE INTANGIBLE ASSET. AGAINST THE SAID FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) , THE REVENUE IS IN APPEAL. 4. SHRI K. VENKATA CHALAM APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY DEFEND ED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND FURTHER DRAWS STRENGTH BY PLACING RELIANCE ON THE FOLLOWING DECISIONS OF TRIBUNAL : I . ACIT VS. ASHOKA INFRAWAYS (P.) LTD., 33 TAXMANN.COM 499 (PUNE - TRIB.); II . ACIT VS. M/S. ASHOKA DSC KATNI BY - PASS ROAD P VT. LTD. IN ITA NO. 1637/PUN/2016; III . INCOME TAX OFFICER VS. M/S. ASHOKA HIGHWAYS (BHANDARA) LTD. IN ITA NO. 1630/PUN/2016. 3 ITA NO .2641/PUN/2016, A.Y. 2011 - 12 5 . ON THE OTHER HAND SHRI S.B. PRASAD REPRESENTING THE DEPARTMENT SUPPORTED THE ORDER OF ASSESSING OFFICER. THE LD. DR SUBMITTED THAT THE REVENUE HAS FILED APPEAL AGAINST THE ORDER OF TRIBUNAL IN THE CASE OF M/S. ASHOKA INFRASTRUCTURE LIMITED VS. ACIT (SUPRA ). 6 . BOTH SIDES HEARD. THE ISSUE RAISED IN PRESENT APPEAL WAS CONSIDERED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. ASHOKA INFRASTRUCTURE LIMITED VS. ACIT (SUPRA). THE TRIBUNAL HELD THAT RIGHT TO COLLECT TOLL IS AN INTANGIBLE ASSET AND THE ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION ON SAME. WE FIND THAT CONSISTENT VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN VARIOUS OTHER CASES WHERE DEPRECIATION HAS BEEN CLAIMED ON RIGHT TO COLLECT TOLL , C ONSIDERING IT TO BE A N INTANGIBLE ASSET. THE HYDERABAD SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. M/S. PROGRESSIVE CONSTRUCTION LIMITED REPORTED AS 191 TTJ 549 HAS HELD THAT NATIONAL HIGHWAY CONSTRUCTED ON BOT BASIS GIVES RISE TO AN INTANGIBLE ASSET IN THE FORM OF RI GHT TO COLLECT TOLL CHARGES U/S. 32(1)(II) AND THE ASSESSEE IS ELIGIBLE TO CLAIM DEPRECIATION ON SUCH ASSET. THUS, IN VIEW OF THE ABOVE DECISIONS OF THE TRIBUNAL WE FIND NO INFIRMITY IN THE IMPUGNED ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE APPEAL O F REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 11 TH DAY OF FEBRUARY, 201 9 . SD/ - SD/ - ( R.S. SYAL ) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 11 TH FEBRUARY, 2019 . RK 4 ITA NO .2641/PUN/2016, A.Y. 2011 - 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1 3 , PUNE 4. THE DGIT (INV), PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / / / TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE