BSC C&C Kurali Toll Road Ltd., New Delhi V. ACIT Circle-5(1), New Delhi

ITA 6566/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1568 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 02-10-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 06-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ISHTIYAQUE AHMED
• Keywords: Depreciation; Revenue expenditure; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘A’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No.6565/Del./2019 (ASSESSMENT YEAR : 2015-16) ITA No.6566/Del./2019 (ASSESSMENT YEAR : 2016-17) M/s. BSC C and C Kurali Toll Road Ltd., vs. ACIT, 74, Hemkunt Colony, Circle 5(1), New Delhi. New Delhi. (PAN : AADCB1505H) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Amarjeet Singh, CA REVENUE BY : Shri Ishtiyaque Ahmed, CIT DR Date of Hearing : 03.10.2022 Date of Order : 06.10.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : These are appeals by the assessee against the respective orders of the ld. CIT (Appeals). Since the issues are common and connected and the appeals were heard together, these are being disposed off by this common order. 2. For the sake of convenience, we are referring to grounds of appeal for Assessment Year 2015-16 which read as under :- ITA No.6565 & 6566/Del./2019 2 “1. That on the facts and circumstances of the case and in law, the Learned CIT (Appeals) has erred while confirming the reduction of depreciation on Toll Road developed by The appellant company from 25% to 10% and confirming addition of Rs.17,57,33,986/- on the ground that the roads are included in the definition of Building without accepting appellant's contention that the appellant company has Rights in the developed Toll Road and the appellant is eligible for depreciation @ 25% under the head Intangible Assets. 2. That on the facts and circumstances of the case, Ld. Commissioner of Income-tax (Appeals) has erred while not allowing depreciation on Plant & Machinery and Computers amounting to Rs.5,57,931/- without passing a speaking order in this regard. 3. That on the facts and circumstances of the case, Ld. Commissioner of Income-tax (Appeals) has erred while confirming disallowance of Provision made for Major Maintenance amounting to Rs.9,79,60,000/- on the ground that the said provision is contingent in nature and the assessee has not made any expenditure on that count during the year under consideration. 4. That on the facts and circumstances of the case, Ld. Commissioner of Income-tax (Appeals) has erred while confirming the treatment of major maintenance expenditure which is around 15% of the total project cost as Capital Expenditure instead of Revenue Expenditure.” 3. At the outset in this case, ld. Counsel of the assessee contended that both the main issues in these appeals are covered by ITAT in assessee’s own case in ITA Nos.1592 & 1593/Del/2017 for AYs 2012-13 & 2013-14 vide order dated 18.05.2021. Ld. Counsel took us to aforesaid ITAT order wherein both the main issues were considered and decided in favour of the assessee. ITA No.6565 & 6566/Del./2019 3 4. Per contra ld. DR for the Revenue fairly agreed that two main issues in these appeals have been decided by the ITAT in assessee’s own case in favour of the assessee. 5. We have carefully considered the submissions of both the parties and perused the record. We note that one common ground these appeals is the issue of depreciation on toll road developed by the assessee company whether the assessee company is entitled to depreciation @ 25% or 10%. Ld. CIT (A) held it to be at 10%. We note that the ITAT in the aforesaid order in assessee’s own case in para 12 has held as under :- “12. Therefore, respectfully following the view expressed by Hon’ble Bombay High Court and the Special Bench of this Tribunal, we hold that the assessee is eligible for depreciation @ 25% as claimed by the assessee. Thus, Ground of appeal no.1 raised by the assessee is allowed.” 6. Since the above decision is in assessee’s own case and it is not the case that Hon’ble jurisdictional High Court has reversed the said decision, we set aside the orders of the authorities below and decide the issue in favour of the assessee. 7. Another ground raised in this regard relates to confirmation of disallowance of provisions made for Major Maintenance amounting to Rs.9,79,60,000/- on the ground that the said provision is contingent in nature. ITA No.6565 & 6566/Del./2019 4 8. Ld. Counsel of the assessee in this regard took us to page no.43 of the paper book wherein in the aforesaid order, ITAT had observed as under :- “18. During the course of hearing, Ld. Counsel for the assessee took us through the chart wherein it was mentioned that the maintenance expenditure to be incurred in five years was Rs.60.34 crore, project operations were started on 09.08.2011 and estimation of maintenance expenditure was estimated to Rs.12.07 crores and being not having full year operations of the project, provision was created for only one quarter i.e. Rs.12.07 crore/4 i.e. Rs.3 crore. Reliance is placed upon the judgement of Hon'ble Supreme Court in M/s. Rotork Controls India (P.) Ltd. vs CIT reported in 314 ITR 0062 [2009] [SC]. Further, reliance was placed upon the judgement of Hon'ble Supreme Court in the case of Bharat Earth Movers vs CIT reported in 245 ITR 428 [2000][SC] and also the decision Hyderabad Bench of Tribunal in the case of M/ s. Mokama Munger Highway Ltd. vs ACIT (supra). 19. In the light of the above case laws as relied upon by the Ld. Counsel for the assessee, we are of the considered view that the claim of provision as made by the assessee is in accordance with settled principal of law. Therefore, the authorities below were not justified in making the disallowance. Thus, ground of appeal no.3 raised by the assessee is allowed.” 9. Since the aforesaid decision is on identical subject in assessee’s own case and it is not the case that Hon’ble jurisdictional High Court has reversed the said decision, we follow the coordinate Bench decision and set aside the orders of the authorities below and decide the issue in favour of the assessee. 10. The above two grounds are arising in both the appeals and both of them are allowed in favour of the assessee. ITA No.6565 & 6566/Del./2019 5 11. There is another ground no.4 raised in AY 2015-16 and ground no.3 in AY 1016-17. Ld. Counsel of the assessee submitted that he shall not be pressing this ground in view of the relief he is getting in ground no.1. Accordingly, these grounds are dismissed as not pressed. 12. Another ground raised in AY 2015-16 is ground no.2 which reads as under :- “2. That on the facts and circumstances of the case, Ld. Commissioner of Income-tax (Appeals) has erred while not allowing depreciation on Plant & Machinery and Computers amounting to Rs.5,57,931/- without passing a speaking order in this regard.” 13. We have heard both the parties and perused the record. We note that ld. CIT (A) has adjudicated the ground in para 6.2 as under :- “This ground is directed against excess disallowance of depreciation while working out disallowance on toll road as discussed in ground no.1. The appellant has pointed out small calculation error. The allowable depreciation as worked out by the AO comes to Rs.29,02,54,908/- (28,96,68,559/-+5,65,537/- +20,812/-) on account of toll road, plant and machinery and computer respectively. But this amount of allowable depreciation has been mentioned as Rs.29,02,25,490/- in the assessment order. The AO is directed to correct the amount accordingly. This ground is allowed.” 14. From the above, it is apparent that ld. CIT (A) has directed the AO to correct the errors mentioned therein and correct the amount accordingly. Ground raised by the assessee before us as above is just not arising out of ld. CIT (A)’s order. For that matter from the order of AO ITA No.6565 & 6566/Del./2019 6 on the related issue, ld. CIT (A) has already directed the AO to examine with some direction and correct the amount. IN this view of the matter, in our considered opinion, this ground raised by the assessee is liable to be dismissed being infructuous. 15. Our above order applies mutatis mutandis to the appeal for AY 2016-17. 16. In the result, both the appeals by the assessee are partly allowed. Order pronounced in the open court on this day 6 th of October, 2022. Sd/- sd/- (NARENDER KUMAR CHOUDHRY) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 6 th day of October, 2022 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT (A)-2, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.