Pune Solapur Expressways P.Ltd, Pune V. ACIT, circle-20(1), New Delhi

ITA 3326/DEL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8953 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUNESH KUMAR
• Keywords: Business income; Depreciation
• Section: 32; 191; 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.3326/Del/2018 Assessment Year: 2013-14 Pune Solapur Expressways P. Ltd., Patas Plaza, KM 64 NH 65, Old NH 9, Taluka Daund, Pune, Maharashtra. Vs ACIT, Circle-20(1), New Delhi. PAN : AAFCP0158C (Appellant) (Respondent) Assessee by : Shri Ketan Ved, CA Revenue by : Shri Munesh Kumar, CIT, DR Date of Hearing : 27.10.2021 Date of Pronouncement : 10.11.2021 ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 13 th December, 2017 of the CIT(A)-38, New Delhi, relating to assessment year 2013- 14. 2. The grounds raised by the assessee are as under:- “Appeal under section 253(1 )(a) of the Income-tax Act, 1961 (“the Act”) against the order dated December 13, 2017 (received on March 14, 2018) ITA No.3326/Del/2018 2 passed under section 250(6) of the Act by the Commissioner of Income Tax (Appeals) - 38, Delhi [“CIT(A)”] for assessment year 2013-14. 1. That on the facts and circumstances of the case and in law, the Assessing Officer (“AO”) erred in completing the assessment of the Appellant at a loss of INR 10,26,64,940 as against returned loss of INR 71,62,82,584. 2. That on facts and in the circumstances of the case and in law, the CIT(A) has erred in upholding the action of the AO disallowing the deprecation amounting to INR 61,36,17,642 claimed by the Appellant on toll road applying the Central Board of Direct Taxes Circular No. 9/2014 dated April 23, 2014. 3. That on facts and in the circumstances of the case and in law, the AO has erred in not appreciating that the Appellant is the owner of the toll road and, consequently, entitled to claim depreciation under the provisions of section 32 of the Act. The CIT(A) further erred in upholding 'the action of the AO. 4. That on facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in not considering the toll road as a “Plant” for the purposes of allowing depreciation as per the provisions of the Act. 5. Without prejudice to ground of appeal No. 4, the CIT(A) erred in upholding the action of the AO in not considering the rights arising in relation to toll road as an intangible asset for the purposes of allowing depreciation as per the provisions of the Act Each of the above grounds is independent and without prejudice to the other grounds of appeal preferred by the Appellant. The Appellant prays for leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before, or at, the time of hearing of the appeal.” 3. Facts of the case, in brief, are that the assessee is a company engaged in the business of Design Build Finance Operate and Transfer (DBFOT) basis, strengthening of existing two lanes and widening it to four lanes from Km. 40.00 to Km. 144.40.00 on Pune-Solapur Section of NH-9 in the State of Maharashtra ITA No.3326/Del/2018 3 under NHDP Phase III vide Concession Agreement dated 19 th May, 2009 with the National Highways Authority of India. The Concession Agreement is for a period of 21 years from the appointed date stated in clause 3.1.1 of Article 3 of the said agreement. It filed its return of income on 30 th September, 2013 declaring the loss of Rs.71,62,82,584/-. During the year under consideration, the assessee company completed the construction of the Expressway (Carriageway) and made it operational w.e.f 04.02.2013. Therefore, this is the first year in which the assessee company commenced its operations. During the course of the assessment proceedings, the AO examined the following issues:- i. Whether the carriage way (toll road) qualifies for depreciation at the rates applicable to ‘Plant & Machinery' or ‘Buildings'. It was noticed that the assessee had claimed depreciation on the Carriageway at the rates applicable to Plant & Machinery. The assessee vide order sheet entry dated 05.11.2015, was required to justify its claim for allowance of depreciation applicable to ’Plant & Machinery' when the carriageway constructed by it apparently fell under the category of ’Buildings’. ii) Whether the assessee is entitled to deprecation on carriageway as it is not the actual owner of the infrastructure facility. Since the assessee was not actual owner of the infrastructure facility, having only limited rights of use, it was asked to explain as to why cost of construction on development of infrastructure facility may not be allowed as amortized ITA No.3326/Del/2018 4 business expenditure as per the clarification issued by CBDT vide their Circular No. 09/2014 dated 23.04.2014. 4. He, therefore, asked the assessee to explain as to why depreciation as claimed by the assessee should be allowed as per Rules applicable to Plant & Machinery. Rejecting the various explanations given by the assessee, the AO held that the assessee is not the owner of the project. He, therefore, disallowed the depreciation claimed by the assessee on the toll road under the block ‘Buildings’ or ‘Plant & Machinery’ as the assessee is not the owner of the project. He, therefore, disallowed the depreciation claimed by the assessee on the toll road (carriage way) and added the same to the total income of the assessee. Further, the AO held that the assessee is not entitled to claim depreciation on the roll road as intangible asset due to the fact that the right to collect toll does not fall under any of the categories of ‘intangible assets’ specified in section 32(1)(ii) of the IT Act. Referring to the clarification issued by the CBDT, vide Circular No.09/2014, the AO held that the expenditure incurred by the assessee on development of the toll road under the BOT arrangement will have to be amortised fully over the period of concessionaire agreement after excluding the time taken for creation of such facility. 5. The AO accordingly held that the assessee is entitled for claim of amortized expenditure which has to be spread evenly over the period of concessionaire agreement after excluding the time taken for creation of such facility. The relevant observations of the AO at para 3.5 of his order reads as under:- ITA No.3326/Del/2018 5 “3.5 Quantum of allowable amortized expenditure. As stated above, the assessee is entitled for claim of amortized expenditure which has to be spread evenly over the period of concessionaire agreement after excluding the time taken for creation of such facility. The Concession Agreement executed by the assessee with the Authority is effective from 14.09.2009 (appointed date as per clause 3.1.1 of Article 3 of the Concession Agreement) for a period of 21 years. The Concession Agreement expires on 13.09.2030. The assessee built the project over a period of around 3 years. The infrastructure facility of toll road highway became operational w.e.from 04.02.2013. Therefore, after excluding the time taken for creation of the toll road, a period of 17 years, 7 months and 7 or in other words a total of 6424 days remains during which the expenditure made by the assessee on the development of the toll road is required to be amortized. During the assessment year under assessment, the toll road has been operational since 04.02.2013 i.e., 55 days. The amortized expenditure allowable as expenditure to the assessee during the year under consideration is determined as under:- S. No Particulars. Remarks 1 Total capitalized cost of the toll road Rs. 923,58,94,396 2. Total remaining period under the Concession Agreement 6424 days 3. Total operational period of the project during the year 55 days 4. Amortized expenditure allowable during the year Rs. 7,90,74,438 5.1 The AO accordingly made an addition of Rs.61,36,17,642/- to the total income of the assessee. 6. In appeal, the ld.CIT(A) upheld the action of the AO in applying the Circular retrospectively by observing as under:- “3.2 I have carefully perused the assessment order and facts on record. The facts of the case are that appellant has entered into a concessionaire Build Own Transfer (BOT) agreement with NHAI on May 19, 2009 to design, build, finance, operate and widen to four lane§ the Pune Solapur section of National Highway 9for a period of 21 years from September 14, 2009. The operation of the toll road will be transferred to NHAI at the end of the concession period. Activities of the appellant during the year under consideration are in accordance with the objects stated in the memorandum of association. This right to develop and operate the facility is acquired for a fixed term called the ITA No.3326/Del/2018 6 concession period. All these rights are however exercisable by the appellant strictly within the restricted framework of the concession agreement which provides for permissions and sanctions on a number of activities. At the end of the concession period, the project facility, in running condition is to be handed back to NHAI at NIL cost. No money is given by NHAI for the development of the project. The appellant has to perform many activities to complete all its obligations under the concession agreement before the sub-license fees earned by it can be claimed by it as its income. From the facts listed above, it can be seen that the appellant is carrying out a business and earning business income as there are regular and systematic activities required to be carried out to earn this income. Apart from the work of development of the project facility and the provision and maintenance of the infrastructural services thereat, the appellant has to on a regular basis, liaise with NHAI and provide responses to queries pertaining to functioning, updation of licenses, permissions, sanctions, reconciliations of utility charges recovered and payable to NHAI, inspection by NHAI officials etc. From the facts listed above, it can be seen that the appellant is carrying out a business and earning business income as there are regular and systematic activities required to be carried out to earn this business income which in my opinionTs covered by CBDT circular no.9/2014 dated 23.04.2014 in which the issue of treatment of expenditure incurred for development of roads and highways in Build-On-Transfer (BOT) agreements is dealt with. The appellant has contended that the Ld. Assessing officer has not commented upon the ownership of1 two distinct assets, viz (a) The toll road and (b) The right to collect toll on the toll road. It is clear that the concession agreement confers upon the appellant the right to collect toll on the toll road. I hold that appellant is fully covered by CBDT circular no. 9/2014. In accordance with this circular, which has provided a machinery to deal with situations where assessees have claimed any deductions in earlier years, the assessing officer has correctly held that cost of development of the toll road has to be amortized in accordance with the above-mentioned circular. The Circular is not only applicable but also the amount amortized is not eligible for depreciation. I therefore, uphold the action of assessing officer in retrospectively applying circular no.9/2014.” 6.1 So far as the issue of depreciation is concerned, here also, the ld.CIT(A) decided the issue against the assessee by observing as under:- “4.3 The appellant has contended that the Ld. Assessing officer has not commented upon the ownership of two distinct assets, viz (a) The toll road and (b) The right to collect toll on the toll road . The appellant has further submitted inter alia that "1.3 The AO completed the assessment in the instant case holding as under: ITA No.3326/Del/2018 7 a) Appellant is not entitled to claim depreciation on toll road under the block 'Plant & Machinery’ as assesse is not the owner of the project. Therefore, the depreciation claimed by the Appellant on the toll road (Carriageway) was disallowed. b) The Appellant is not entitled to claim depreciation on toll road as 'intangible asset' due to the fact that right to collect does not fall under any of the categories of the ‘intangible asset’ specified under section 32(1)(ii) of the Act. c) As per the extant clarification issued by the Central Board of Direct Taxes (CBDT) vide Circular No. 9/2014, the expenditure incurred by the Appellant for development of the toll road under Build Operate and Transfer (“BOT") arrangement will have to be amortized evenly over the period of concessionaire agreement after excluding the time taken for constructing such facility.” It has already been held in para 3.2 supra that in accordance with the terms of circular no. 9/2014, that the concession agreement confers upon the appellant the right to collect toll on the toll road. Since the appellant is fully covered by CBDT circular no. 9/2014, the assessing officer has correctly held that cost of development of the toll road has to be amortized in accordance with the above-mentioned circular. Since the expenditure incurred by the appellant for development of the toll road will have to be amortized evenly over the period of concessionaire agreement after excluding the time taken for constructing such facility, the appellant is not entitled to clam depreciation on said toll road. The appellant is not entitled to treat its right to collect toll as an intangible asset and claim depreciation on the same. Hence, these grounds are decided against the appellant.” 7. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 8. The ld. counsel for the assessee, referring to the following decisions, submitted that the issue stands squarely covered in favour of the assessee wherein it is held that the assessee is entitled to depreciation @ 25% u/s 32(1)(ii) in respect of its intangible rights i.e., ‘right to collect toll’:- ITA No.3326/Del/2018 8 1. West Gujarat Expressway Ltd. Vs. ACIT -10(1) [ITA No. 5904 & 6244/Mum/2012; A.Y 2009-10] 2. West Gujarat Expressway Ltd. Vs. DCIT -14(3)(1) [ITA No. 634 & 664/Mum/2015; A.Y 2010-11] 3. Andhra Pradesh Expressway Ltd. Vs. ACIT - 14(1)(1) [ITA No. 655 & 146/Mum/2015; A.Y 2010-11] 4. Thiruvananthapuram Road Development Co. Ltd. Vs. ACIT-10(1) [ITA No. 6798 & 6837/Mum/2011; A.Y 2008-09] 5. Thiruvananthapuram Road Development Co. Ltd. Vs. DCIT-14(3)(1) [ITA No. 622, 636, 4346/Mum/2015 & C.O No. 25/Mum/201, A.Y 2010-11 and A.Y 2011-12] 6. West Gujarat Expressway Ltd. Vs. DCIT-14(3)(1) ITA No. 3668 & 4327/Mum/2016; A.Y 2011-12] 7. M/s Infrastructure Leasing_& Financial Services Ltd. Vs. Addl. CIT- 10(1) [ITA No. 3699, 3700, 3785 & 3786/Mum/2013; A.Y 2008-09 and A.Y 2009-10] 8. M/s Infrastructure Leasing & Financial Services Ltd. Vs. DCIT-14(2)(1) [ITA No. 7091, 7092, 7284 & 6829/Mum/2014; A.Y 2010-11 and A.Y 2011-12] 9. Selvel Advertising (P) Ltd. Vs. DCIT [58 taxmann.com 196 (Kolkata-Trib); A.Y 2006-07 to A.Y 2010-11 10. North Karnataka Expressway Ltd. Vs. CIT-10 [ITA No. 499/Mum/2012] 11. Godhra Expressway Private Ltd. Vs. DCIT [ITA No. 2123 & 2124/Hyd/2018; A.Y 2014-15 and A.Y 2015-16] 12. Second Vivekananda Bridge Tollway Co. Pvt. Ltd. Vs. DCIT 2(2) [ITA No. 19/Kol/2017; A.Y 2012-13] 9. He accordingly submitted that the grounds raised by the assessee should be allowed. 10. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). 11. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We ITA No.3326/Del/2018 9 find, the Hyderabad Bench of the Tribunal in the case of DCIT vs. M/s Madurai Tuticorin Expressways Ltd., vide ITA No.2119, 2120 & 2121/Hyd/2018 for AYs 2012-13 to 2014-15, order dated 9 th June, 2021, has decided identical issue in favour of the assessee by observing as under:- “3. We have given our thoughtful consideration to the rival contentions supporting and opposing the impugned depreciation disallowance. It has come on record that this tribunal's Special Bench's decision in M/s.Progressive Construction Ltd. (supra) has already settled the issue that such a license agreement amounts to an intangible asset in the nature of right to collect toll amounts to an intangible asset u/s.32(1)(ii) of the Act. The Revenue's stand that the assessee ought to have amortised the license fee paid to "NHAI" as per the CBDT's circular (supra) also fails to make any difference since the same could not be taken as an attempt at the Board's part to deny depreciation relief in any manner; whatsoever. Hon'ble apex court's decision Taparia Tools Ltd. Vs. JCIT (2015) [372 ITR 605] (SC) holds that the mere option of amortisation would not debar an expenditure claim which is otherwise admissible as per law. We thus affirm the CIT(A)'s findings qua the first issue of depreciation disallowance. The Revenue's corresponding grounds are rejected. 12. We find, the Delhi Bench of the Tribunal, in the case of BSC C&C Kurali Toll Road Ltd. vs. DCIT, ITA Nos.1592 & 1593/Del/2017 for AYs 2012-13 & 2013-14, order dated 18 th May, 2021, has also decided the identical issue and has observed as under:- “10. We have heard the rival submissions and perused the material available on record. The issue under dispute is with regard to availability of depreciation to the assessee whether it is to be allowed keeping the right to collect toll fee as intangible assets or it to be treated as building or plant & machinery as held in the decision relied by the Ld.CIT(A) rendered in the case of CIT vs Noida Toll Bridge Co. Ltd. (supra). We find that there were conflicting decisions rendered by the Hon'ble High Court and Co-ordinate Benches of the Tribunal. However, the Tribunal in the case of ACIT vs M/s. West Gujarat Expressway Ltd. (supra) after considering the conflicting views held as under:- ITA No.3326/Del/2018 10 28. "In view of the express provisions of the Act, we have no doubt to hold that the assessee is entitled to collect tax being an intangible commercial right under section 32(1)(ii) at the rate as has been prescribed under the relevant rules. Our above view is further supported by the decision of the co-ordinate Pune bench of the Tribunal in the case of M/s. Ashoka Infrastructure Ltd. Vs. ITO in ITA No.989/PN/2010 & ITA No.1105/PN/2010,wherein, the Tribunal while further relying upon another decision of the Co-ordinate Bench of the Tribunal in the case of 'Ashoka Infraways Pvt. Ltd. Vs. ACIT' in ITA No.185 & 186/PN/2012 dated 29.04.2013, has held in clear terms that the claim of the assessee for depreciation on "licence to collect toll" being an 'intangible asset' falling within the scope of section 32(1)(ii) of the Act is liable to be upheld. The relevant part of findings of the Tribunal for the sake of convenience is reproduced as under: "6. At the time of hearing, it was a common point between the parties that an identical issue has been considered by the Pune Bench of the Tribunal in the case of Ashoka Infraways Pvt. Ltd. vs. ACIT vide ITA Nos. 185 & 186/PN/2012 dated 29.04.2013. As per the Tribunal following the precedents by way of various decisions of different Benches of the Tribunal mentioned therein, the claim of the assessee for treating the 'License to collect Toll' as an intangible asset eligible for the claim of depreciation @ 25% as per Section 32(1)(ii) of the Act was justified. The following discussion in the order of the Tribunal dated 29.04.2013 (supra) is relevant :- "7. Before us, it was a common point between the parties that the impugned issue has been adjudicated in favour of the assessee in the following decisions of the Tribunal:- i) Ashoka Buildcon Ltd. in ITA No.1302/ PN/09 dated 20.03.2012. ii) M/s. Kalyan Toll Infrastructure Ltd. in ITA.Nos.201 & 247/Ind/2008 dated 14.12.2010. iii) Dimension Construction Pvt. Ltd. in ITA.No.222, 223, 233 & 857/PN/2009 dated 18.03.2011. iv) Ashoka Info (P) Ltd. (supra) v) Reliance Ports and Terminals Ltd. (supra). 8. The Ld. CIT(DR) appearing for the Revenue, has submitted that the 'intangible assets' eligible for depreciation in section 32(1)(ii) of the Act, are only those which are owned by the ITA No.3326/Del/2018 11 assessee and have been acquired after spending money. In the case of the assessee, by way of an agreement, assessee was awarded a work to construct a road by using own funds and the expenditure incurred was allowed to be reimbursed by permitting the assessee a concession to collect toll/fees from the motorists using the road. Therefore, it could not be said that such a right was within the purview of section 32(1)(ii) of the Act. However, the Ld. CIT(DR) has not contested the factual matrix that identical issue has been considered by our coordinate Benches in the case of Ashoka Buildcon Ltd. (supra), Kalyan Toll Infrastructure Ltd. (supra), Dimension Construction Pvt. Ltd. (supra) and Ashoka Info (P) Ltd. (supra). 9. On the other hand, the Ld. Representative for the respondent assessee pointed out that the aforesaid argument set up by the Revenue has also been considered in the aforesaid precedents before concluding that the impugned 'Right to collect Toll' was an 'intangible asset' eligible for claim of depreciation @ 25% as per sec. 32(1)01) of the Act. 10. We have carefully considered the rival submissions. Factually speaking, there is no dispute to the fact that the costs capitalised by the assessee under the head 'License to collect Toll' have been incurred for development and construction of the infrastructure facility, i.e., Dewas By- pass Road. It is also not in dispute that the assessee was to build, operate and transfer the said infrastructure facility in terms of an agreement with the Government of Madhya Pradesh. The expenditure on development, construction and maintenance of the infrastructure facility for a specified period was to be incurred by the assessee out of its own funds. Moreover, after the end of the specified period, assessee was to transfer the said infrastructure facility to the Government of Madhya Pradesh free of charge. In consideration of developing, constructing, maintaining the facility for a specified period and thereafter transferring it to the Government of Madhya Pradesh free of charge, assessee was granted a Right to collect Toll' from the motorists using the said infrastructure facility during the specified period. The said Right to collect the Toll' is emerging as a result of the costs incurred by the assessee on development, construction and maintenance of the infrastructure facility. Such a right has been adjudicated by the Tribunal in the aforesaid precedents to be in the nature of 'intangible asset' falling within the purview of section 32(1)(i/) of the Act and has been found ITA No.3326/Del/2018 12 eligible for claim of depreciation. No decision to the contrary has been cited by the Ld. DR before us and, therefore, we find no reasons to depart from the accepted position based on the aforesaid decisions. 11. So however, the plea of the Ld. DR before us is to the effect that the impugned right is not of the nature referred to in section 32(1)(ii) of the Act for the reason that the agreement with the Government of Madhya Pradesh only allowed the assessee to recover the costs incurred for constructing the road facility whereas section 32(1)(i1) of the Act required that the assets mentioned therein should be acquired by the assessee after spending money. The said argument in our view is factually and legally misplaced. Factually speaking, it is wrong to say that impugned right acquired by the assessee was without incurrence of any cost. In fact, it is quite evident that assessee got the right to collect toll for the specified period only after incurring expenditure through its own resources on development, construction and maintenance of the infrastructure facility. Secondly, section 32(1)(i1) permits allowance of depreciation on assets specified therein being 'intangible assets' which are wholly or partly owned by the assessee and used for the purposes of its business. The aforesaid condition is fully satisfied by the assessee and therefore considered in the aforesaid perspective we find no justification for the plea raised by the Revenue before us. 12. In the result, we affirm the order of the CIT(A) in holding that the assessee was eligible for depreciation on the 'Right to collect Toll', being an 'intangible asset' falling within the purview of section 32(1)(i1) of the Act following the aforesaid precedents." 7. In terms of the aforesaid precedent, the claim of the assessee in the present case for depreciation on 'License to collect Toll', being an 'intangible asset' falling with the scope of Section 32(1)(ii) of the Act is liable to be upheld. We hold so. 8. In so far as the reliance placed by the CIT(A) on the judgement of the Hon'ble Bombay High Court in the case of Techno Shares And Stocks Ltd. (supra) is concerned it may only be noted that the said judgement has since been altered by the Hon'ble Supreme Court vide its order reported at (2010) 327 ITR 323 (SC). Accordingly, in view of the ITA No.3326/Del/2018 13 aforesaid discussion, we hereby allow the Ground of Appeal No. 1.1 raised by the assessee." 29. In view of our observations made in the preceding paras and also agreeing with the above reproduced findings of the Tribunal, we hold that the assessee is entitled to the claim of depreciation on the road to collect toll being an intangible asset falling within the purview of section 32(1) (ii) of the Act. 30. So far as the other alternative contention of the assessee that the project be treated as plant & machinery and the depreciation be accordingly allowed to it, we do not find that the said license of right to collect toll in any way falls in the definition of plant & machinery. As held by the Hon'ble Bombay High Court, even the assessee is not the owner of the toll road. The assessee has been given only the right to develop, maintain and operate the toll road and further to collect the toll for the specified period. This right as discussed above is an intangible asset falling under section 32(1)(ii) of the Act." 13. We find, the Mumbai Bench of the Tribunal in the case of North Karnataka Expressway Ltd. vs. ACIT and vice versa, vide ITA Nos.4372 & 4373/Mum/2012, for AYs 2005-06 and 2006-07 and ITA No. 4709/Mum/2012 for AY. 2005-06, order dated 24 th May, 2021, while deciding identical issue, has observed as under:- “We find that the aforesaid order of the „Special bench‟ of the Tribunal, had thereafter been followed by the ITAT “J” bench, Mumbai, in the case of DCIT, Circle-9(1)(2),Mumbai Vs. M/s Atlanta Ltd. Mumbai (ITA No. 3415/Mum/2015, dated 24.01.2018). Also, a similar view had been taken by the ITAT, Chennai in the case of ACIT, Co-operative circle 5(2), Chennai Vs. M/s PNG Toll Way Ltd (ITA No. 238/CHNNY/2019, dated 26.07.2019; AND ITAT “E” Bench, Mumbai in the case of ACIT (Cir). 6(2)(2), Mumbai Vs. M/s Essel Sagar Damoh Toll Roads Ltd, ITA No. 7114/Mum/2016 & C.O No. 84/Mum/2018; A.Y 2011-12, dated 20.09.2019. In the backdrop of the aforesaid judicial pronouncements, we are of the considered view that the issue as to whether an Infrastructure Development company that had constructed a road on build, operate and transfer (BOT) basis on the land owned by the Central Government would be eligible for claim of depreciation in respect of its intangible rights i.e “right to collect toll” under Sec. 32(1)(ii) is squarely covered by the aforesaid order of the „Special bench‟ of the Tribunal in the case of ACIT, Circle 10(2), Hyderabad, Vs. Progressive Construction Ltd. (2018) 191 TTJ 549 (Hyd.) (SB) and also the orders of the coordinate benches of the Tribunal viz. (i) DCIT, Circle-9(1)(2),Mumbai Vs. ITA No.3326/Del/2018 14 M/s Atlanta Ltd. Mumbai (ITA No. 3415/Mum/2015, dated 24.01.2018); (ii) ACIT Vs. M/s PNG Tata Ltd. (ITA No. 238/CHNNY/2019, dated 26.07.2019); AND (iii). ACIT (Cir). 6(2)(2), Mumbai Vs. M/s Essel Sagar Damoh Toll Roads Ltd, ITA No. 7114/Mum/2016 & C.O No. 84/Mum/2018; A.Y 2011-12, dated 20.09.2019. We, thus, finding ourselves to be in agreement with the view taken by the Tribunal in the aforesaid cases respectfully follow the same. Accordingly, the claim of the assessee towards depreciation under Sec.32(1)(ii) in respect of its intangible rights i.e “right to collect toll” being in conformity with the mandate of law is found to be in order. We thus not finding favour with the view taken by the CIT(A) therein set-aside the same. The Ground of appeal No. 1 is dismissed in terms of our aforesaid observations. The Ground of appeal No. 2 r.w additional ground of appeal no. 1 are allowed in terms of our aforesaid observations.” 14. Respectfully following the decisions cited (supra), we are of the considered opinion that the assessee is the owner of the toll road and consequently entitled to claim depreciation on toll road under the provisions of section 32 of the Act. The grounds raised by the assessee are accordingly allowed. 15. In the result, the appeal filed by the assessee is allowed. The decision was pronounced in the open court on 10.11.2021. Sd/- Sd/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:10 th November, 2021. dk ITA No.3326/Del/2018 15 Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi