Income Tax Appellate Tribunal - Mumbai
Plus Bksp Toll Ltd ,Mumbai vs Acit, 15(1)(1), Mumbai on 28 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, MUMBAI
SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER
SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER
ITA No.4525/Mum/2025 ITA No.4523/Mum/2025
(Assessment Year:2012-2013) (Assessment Year:2013-2014)
ITA No.1181/Mum/2026
(Assessment Year:2013-2014)
Plus BKSP Toll Limited
Shop No.1, 2 and 3, Siddhivinayak Residency No.40,
Sector 9, Komathe, Navi Mumbai - 410209.
Maharashtra.
[PAN:AADCP9809N] ............. Appellant
Vs
Assistant Commissioner of Income Tax
15(2)(2), Mumbai
Room No.451, Aayakar Bhavan, M. K. Road,
Mumbai - 400020. Maharashtra ............. Respondent
Appearance
For the Appellant/Assessee : Shri Prateek Jha & Prayag Jha
For the Respondent/Department : Shri R. A. Dhyani
Date
Conclusion of hearing : 15.04.2026
Pronouncement of order : 28.04.2026
ORDER
[
Per Rahul Chaudhary, Judicial Member:
1. These are three appeals preferred by the Assessee. ITA No.4525/Mum/2025 and 4523/Mum/2025 are quantum appeals pertaining to Assessment Years 2012-2013 and 2013-2014, respectively, whereas ITA No. 1181/Mum/2026 is penalty appeal pertaining to Assessment Year 2013-2014. Since the appeals arise from identical factual/legal matrix, the same were heard together and are, therefore, being disposed off by way of a common order. Assessee had also filed Stay Application No.51/Mum/2026 in ITA No.1181/Mum/2026 pertaining to Assessment Year 2013-2014 which is also taken up along with the aforesaid appeals.
ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014
2. We would first take-up appeal for the Assessment Year 2012-2013.
ITA No.4525/Mum/2025 [Assessment Year 2012-2013]3. The present appeal preferred by the Assessee is directed against the Order, dated 14/06/2023, passed by National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'the CIT(A)'] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 31/03/2017, passed under Section 143(3) read with Section 263 of the Act for the Assessment Year 2012-2013.
4. There was delay of 685 days in filing the present appeal before the Tribunal. When the appeal was taken up for hearing Learned Authorized Representative for the Assessee appearing before us submitted that the delay in filing the present appeal be condoned and in this regard reliance was placed upon the supporting affidavit filed along with application seeking condonation of delay which reads as under:
"I, Pramod Suryakant Hatkar, PAN-AAZPH6156R, age about 53 years, residing at Flat No. 503, Siddhivinayak Residency, Plot No. 40, Sector 9, Kamothe, District Raigad, Maharashtra- 410209, hereby, in the capacity of Authorized Signatory of M/s PLUS BKSP Toll Ltd, solemnly affirm and state as under-
2. I say that, M/s PLUS BKSP Toll Ltd. was a special purpose vehicle formed for the four-laning and improvement of Bhiwandi-Kalyan Shil Phata Highway on Build-Operate-Transfer (BOT) basis.
3. I say that, in the Assessment Year 2012-13 ("AY 2012-2013"), the assessee claimed depreciation in the Income Tax Return on the cost of Rs.2,82,95,16,913/- incurred on construction of infrastructure. This issue was present in many other cases, engaged in the same type of business. The Bombay High Court in the case of CIT v West Gujarat Expressway Ltd [2016] 73 taxmann.com 139 held that depreciation was not allowable in the case of toll roads by treating them as plant and machinery.
4. I say that, the Central Board of Direct Taxes ("CBDT") issued Circular No. 9/2014 dated 23.04.2014 ("Circular"), in exercise of powers conferred under section 119 of the Income Tax Act ("IT 2 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 Act") specifically on the subject of treatment of expenditure incurred for development of roads/highways in BOT agreements under the provisions of the IT Act. The CBDT in the said Circular clarified that the parties would be entitled to amortize the expenses incurred on development of roads/highways over the period of contract.
5. I say that, the Income Tax Return of our company for AY 2012-13 in which depreciation was claimed, was accepted by the Ld. Assessing Officer ("Ld. AO") after scrutiny. However, the Ld. Commissioner of Income Tax, after the issuance of the Circular by the CBDT, passed a revisionary order under section 263 of the IT Act. The Assessment Order passed under section 143(3) was set aside with a direction to the Ld. AO to deny the claim of depreciation but allow amortization of the expenses incurred by our company.
6. I say that, the Ld. AO pursuant to the direction of the Ld. Commissioner of Income Tax, passed Assessment Order on 31.07.2017 ("Order") under section 143(3) r.w.s. 263 of the I T Act. In the said Order he rejected the claim of depreciation of Rs.44,96,15,898/- and allowed an amount of Rs.12,17,04,558/- on account of Amortization. The officer worked out Amortization over a period of 14 years, 10 months and 10 days whereas Amortization was to be done only over a period of 3 years, 8 months and 7 days. Our company was entitled to amortize a sum of Rs.77,12,92,535/- as against which the Ld. AO allowed only a sum of Rs.12,17,04,558/-.
7. I say that, the issue of amortization went into litigation with the Department. The Ld. Appellate Commissioner did not agree with the contention of our company and rejected our appeal for the AY 2012-13. An Appeal was filed before the ITAT, Mumbai Bench against the order of the Appellate Commissioner. The ITAT after considering our arguments and evidences set aside the Appellate Order and restored the issue to the file of the Ld. CIT(A) for fresh adjudication.
8. I say that, the Ld. CIT(A), pursuant to the order of the ITAT, Mumbai Bench, again rejected our contention and passed on order on 14.06.2023. Copy of this order was received by email.
9. I say that, we forwarded a copy of the Appellate Order to our Auditor Shri Prashant Prabhu G. having Office in Bengaluru seeking his opinion on further action to be taken on this issue.
10 I say that, even after lapse of considerable time no opinion was received from Shri Prashant Prabhu G for taking further action in respect of the Appellate Order dated 14.06.2023.
11 I say that, I discussed this matter with Dr. Prayag Jha, Advocate, ("Dr. Jha") who suggested that appeal against the Appellate Order dated 14.06.2023 should have been filed before the ITAT because the contention taken by the Ld. CIT(A) was contrary to the facts of 3 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 the case.
12. I say that, I communicated the advice of Dr. Prayag Jha ("Dr. Jha") to the Management. It was decided that a meeting of the Board of Directors was to take place on 02.07.2025. I requested Dr. Jha to join the Board meeting virtually and explain as to why appeal against the Appellate Order was necessary.
13. I say that, after discussion with Dr. Jha, the Board of Directors decided to file appeal before the ITAT against the order of the Appellate Commissioner.
14. I say that, Management of our company was always aggrieved with the adverse order of the Ld. Appellate Commissioner of Income Tax. However, no proper advice for taking further action was received from our auditor on time. His advice has not been received till today. The company has decided to file an appeal against the order of the Appellate Commissioner.
15. I say that, the delay of 703 days in filing this appeal was not deliberate, intentional or with any mala fide motive. The delay was not caused by inaction or negligence on the part of the Management of the company.
16. I say that, there was sufficient cause for delay in filing this appeal.
17. I say that, whatever is stated above is true to the best of my knowledge and belief."
4.1. After taking us through the above affidavit the Learned Authorized Representative for the Assessee submitted that the Assessee was a Special Purpose Vehicle created by a Malaysian Company (i.e. Plus Expressways Berhad) and an Indian Company (i.e. Concept Management Consulting Pvt. Ltd.) with the sole purpose of entering into an agreement with Maharashtra State Road Development Corporation Limited (MSRDC) for building and operating a highway under the BOT Model. A concession agreement which was executed by the Assessee with MSRDC on 25/08/2006 which got terminated on 28/04/2013. The Assessee did not have any other business or revenue source in India. Thereafter, the Assessee operated with minimum staff. On receipt of impugned order, the employee of the Assessee-Company referred the issue to the tax consultant/auditor. However, no advice was received. Since, the management of the Assessee-company was also outside India, there was lack of communication between the 4 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 erstwhile tax consultant/auditor and the management. For the same reasons the appointment of new tax consultant took time. On account of aforesaid reasons, there was a delay in filing of the present appeal.
4.2. On perusal of the material on record we find that the submissions made on behalf of the Assessee are supported by the material on record. We note that the Assessee is a joint venture company which had taken the work of building four lane road, operation/maintenance and toll collection in respect of 211.6 Kms long road of Bhiwandi-Kalyan Shil Phata Highway including Bhiwandi Bypass junction to Durgadi Chowk, Kalyan of National Highway 222 in the State of Maharashtra under a Concession Agreement, dated 25/08/2006, with the MSRDC.
The issue raised in the present appeal pertains to the period over which the cost of construction and development of the aforesaid road/highway is to be amortized and allowed as business expenditure. As per the said Concession Agreement the concession period for the project being 6 years 8 months 4 days. Out of which 3 years are meant for construction of the road and balance 3 years 8 months 7 days are for operations. It is the case of the Assessee that on account of dispute between the Assessee and MSRDC the aforesaid Concession Agreement was terminated on 28/04/2013. Whereas, according to the Assessing Officer the term of the aforesaid concession agreement was extended upto 10/07/2024.
It has been explained by the Assessee that after termination of agreement on 28/04/2013, the Assessee did not have any other business or revenue source in India and was operating with minimum staff. The management of the Assessee-company was also outside India. There was lack of communication between the erstwhile tax consultant/auditor and the management. In the aforesaid facts and circumstances the Assessee could not take necessary steps to prefer appeal against the Order passed by the Learned CIT(A) within the prescribed time.
5ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 4.3. We note that the Hon'ble Supreme Court has in the case of Collector, Land Acquisition, Anantnag & Anr. vs. Mst.Katiji & Ors.[1987 (2) SCR 387] held that the expression 'sufficient cause' employed by the legislature in the Limitation Act is adequately elastic to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice. The Hon'ble Supreme Court Observed that a liberal approach should be adopted on account of the following:
(a) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. The doctrine must be applied in a rational common sense pragmatic manner.
(b) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
(c) When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay.
4.4. In the case of N. Balakrishnan v. M. Krishnamurthy [1998 (7) SCC 123] the Hon'ble Supreme Court has held that the purpose of providing limitation is not to destroy the rights. It is founded on public policy fixing a life span for the legal remedy for the general welfare. The object of providing legal remedy is to repair the damage caused by reason of legal injury. If the explanation given does not smack malafides or is not shown to have been put forth as a part of dilatory strategy, the court must show utmost consideration to the suitor. In this context it was observed:
"It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion 6 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in reversional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses to condone the delay. In such cases, the superior cut would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court.
The reason for such a different stance is thus: The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. Time limit fixed for approaching the court in different situations in not because on the expiry of such time a bad cause would transform into a good cause.
Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life- span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.
A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate"
4.5. In our view the above judgment of the Hon'ble Supreme Court come to the aid of the Assessee in the present case. In our view, the conduct of the Assessee does not smack of malafides in the present case. The Assessee has explained the facts and circumstances in which the delay 7 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 in filing the appeal took place and the same is supported by the material on record. Having considered the explanation offered by the Assessee which is supported by the material on record, we are of the view that the delay in filing the present appeal was on account of bonafide reasons as explained by the Assessee and considered hereinabove. Therefore, accepting the explanation given by the Assessee to be reasonable, we hold that in the present case the Assessee was prevented by the sufficient cause from filing the appeal before the Tribunal within the prescribed time. Therefore, keeping in view the above judgments of the Hon'ble Supreme Court we condone the delay of 685 days and proceed to adjudicate the grounds raised in the present appeal.
5. The Assessee had raised following grounds of appeal in appeal for the Assessment Year 2012-2013:
"1. The Ld. CIT(A), NFAC, Delhi, erred in not appreciating that the Ld. Assessing Officer ("Ld. AO") had erred in disallowing assessee's claim of depreciation of Rs.32,79,11,340/- without correctly appreciating the terms and conditions of the Concession Agreement and the tenure of the Concession Agreement.
2. Without prejudice to Ground No. 1, the Ld. CIT(A), NFAC, Delhi, erred in not considering the fact that the Ld. AO had not considered the fact that the Concession Agreement was terminated with effect from midnight of 28.04.2013 and the assessee was entitled to amortize an amount of Rs.77,12,92,535/- out of the expenses of Rs.2,82,80,72,629/-. This claim was put up in an appeal by way of Additional Ground submitted on 05.06.2018 in the office of Ld CIT(A)-24, Mumbai.."
Since the above grounds arise from common factual matrix the same are taken up together.
6. The relevant facts in brief are the Assessee-Company was incorporated as a special purpose vehicle for a infrastructure project. The Assessee- Company was awarded a highway project in the State of Maharashtra on Built Operate and Transfer (BOT) basis. As per the Concession Agreement, dated 25/08/2006, entered by the Assessee with MSRDC 8 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 the Assessee was required to build the highway by 24/02/2008 and the Assessee was entitled to collect toll till 28/04/2013. Thus, the Concession Agreement, as originally executed, was valid till 28/04/2013.
7. In the case of CIT v West Gujarat Expressway Ltd [2016] [73 taxmann.com 139] the Hon'ble Bombay High Court held that since the asset constructed was not owned by the contractor, claim of depreciation thereon made by the contractor was not allowable. Subsequently, the Central Board of Direct Taxes (CBDT) issued Circular No.9/2014 dated 23/04/2014 (for short ' the Circular'), in exercise of powers conferred under Section 119 of the Act addressing the issue of treatment of expenditure incurred for development of roads/highways in BOT agreements under the provisions of the Act. The Circular clarified that the contractor would be entitled to amortize the expenses incurred on development of roads/highways over the tenure of contract. It was clarified that where an assessee has claimed any deduction out of initial cost of development of infrastructure facility of roads/highways under BOT projects in earlier years, the total deduction so claimed for the prior assessment years prior maybe deducted from the initial cost of infrastructure facility of roads/highways and the cost 'so reduced' shall be amortized equally over the remaining period of toll concessionaire agreement. The issue in the present appeal revolves around the interpretation of expression 'remaining period of toll concessionaire agreement' in the facts and circumstances of the present case.
8. For the Assessment Year 2012-2013, the Assessee had claimed depreciation in respect of the cost of highway project. While passing assessment order in the scrutiny assessment proceedings, the Assessing Officer accepted the aforesaid claim. However, the Learned Commission of Income Tax (Exemptions) [for short 'CIT(E)'], passed order under Section 263 of the Act directing the Assessing Officer to allow deduction for amortization of the expenses as per the Circular.
9ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 Pursuant to the direction of the Learned CIT(E), the Assessing Officer passed Assessment Order, dated 31/03/2017, under Section 143(3) read with Section 263 of the Act. The Assessing Officer rejected the claim of depreciation of INR.44,96,15,898/- and allowed deduction of INR.12,17,04,558/- as amortization expenses.
9. In appeal before the Learned CIT(A), the Assessee explained that the Assessing Officer has incorrectly taken 'remaining period of toll concessionaire agreement' as 14 years, 10 months and 10 days. According to the Assessee the Concession Agreement was valid till 28/04/2013. The proposed extension from dated 25/08/2009 to 10/07/2024 was not granted to the Assessee. However, the Learned CIT(A) rejected the contention of the Assessee. Further, the Learned CIT(A) had made enhancement by making addition of INR.32,79,11,340/- in the hands of the Assessee holding that the Assessee had claimed and was allowed excess depreciation of INR.32,79,11,340/- (INR.44,96,15,898/- Less INR.12,17,04,558/-) under Section 32(1)(ii) of the Act during the preceding assessment years.
10. Being aggrieved, the Assessee has preferred the present appeal before this Tribunal on the grounds reproduced in paragraph 5 above.
11. We have heard both the sides and perused the material on record. The relevant dates and events can be summarized as under:
2006 Govt. of Maharashtra (GOM) appointed Maharashtra State Road Development Corporation (MSRDC) to construct Highway. MSRDC was given right to collect toll to recoup cost of construction from 25/08/2006 to 09/07/2016. Tender was floated for construction of Highway 25/08/2006 Project was awarded to the Assessee and Concession Agreement was signed with MSRDC 10 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 As per the Concession Agreement (a) Construction Period (25/08/2006 to 28/04/2013) - Period during which Toll was to be collected, and (b) Operation Period (25/02/2008 to 28/04/2013). Period during which Toll was to be collected.
22/06/2009 Construction was completed and completion certificate was issued 13/08/2009 Notification was issued by the GOM authorizing Assessee to Collect Toll from 22/08/2009 to 28/04/2013.
25/01/2010 Assessee wrote to MSRDC requesting issuance of notification extending Operating Period 20/10/2011 MSRDC proposed to extension of the Operating Period till 10/07/2024 with some additional condition to keep the toll collected in escrow account 04/11/2011 Assessee Accepted the proposal and requested for issuance of Notification by GOM 19/03/2013 Since requisite toll notification was not issued the Assessee issued Termination Notice 26/04/2013 Toll Notification allowing collection of Toll till 26/10/2013 was issued with additional condition that the toll collected be deposited/kept in an Escrow Account 28/04/2013 Rejecting the additional condition of keep the toll collected in Escrow Account, the Assessee terminated the Concession Agreement with effect from 28/04/2013.
31/07/2015 Arbitration proceedings were initiated 20/10/2020 The Arbitral Tribunal upheld the validity of Termination of 11 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 the Concession Agreement with effect from 28/04/2013
12. On perusal of documents corresponding to the above dates and events, the as per the Concession Agreement the original term was to expire on 28/04/2013. It emerges that while the Concession Agreement was proposed to be extended till 10/07/2024, the requisite Toll Notification extending the operation period was never issued. The subsequent Toll Notification extended the operation period only till 26/10/2013 and that too with the additional condition of keeping the toll collected in an Escrow Account. This was not acceptable to the Assessee and therefore, the Concession Agreement came to end with effect from 28/04/2013 on termination by the Assessee. Therefore, we hold that the Assessing Officer was not justified in taking 10/07/2024 as the date of validity of concession agreement and concluding that 'remaining period of toll concessionaire agreement' was 14 years, 10 months and 10 days while computing the quantum of amortization expenses. Taking into consideration the fact that Toll Notification actually issued extended the operation period till 26/10/2013 only, we direct the Assessing Officer to calculate the 'remaining period of toll concessionaire agreement' taking 26/10/2013 as the end date. The Assessing Officer is directed to recalculate the amount of amortization expenses accordingly and allow for the same as business expenditure to the Assessee as per Circular No.09/2014, dated 23/04/2014, issued by CBDT.
13. As regards, addition made in respect of excess depreciation allowed in preceding years is concerned, we are of the view that the same cannot be sustained in view of the following clarification contained in Circular No.09/2014, dated 23/04/2014, issued by CBDT:
"Subject: - Clarification regarding treatment of expenditure incurred for development of roads/highways in BOT agreements under Income-tax Act, 1961 - regarding 12 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 It has come to the notice of the Board that disputes have arisen as to whether the expenditure incurred on development and construction of infrastructural facilities like roads/highways on Build-Operate-Transfer ('BOT') basis with right to collect toll is entitled for depreciation under section 32(1)(ii) of the Act or the same can be amortized by treating it as an allowable business expenditure under the relevant provisions of the Income-tax Act, 1961 ('Act).
2 to 4 xx xx
5. In view of above, Central Board of Direct Taxes, in exercise of the powers conferred under section 119 ofthe Act hereby clarifies that the cost of construction on development of infrastructure facility of roads/highways under BOT projects may be amortized and claimed as allowable business expenditure under the Act.
6. The amortization allowable may be computed at the rate which ensures that the whole of the cost incurred in creation of infrastructural facility of road/highway is 2 amortized evenly over the period of concessionaire agreement after excluding the time taken for creation of such facility.
7. In the case where an assessee has claimed any deduction out of initial cost of development of infrastructure facility of roads/highways under BOT projects in earlier years, the total deduction so claimed for the Assessment Years prior to the Assessment Year under consideration maybe deducted from the initial cost of infrastructure facility of roads/highways and the cost 'so reduced' shall be amortized equally over the remaining period of toll concessionaire agreement.
8. It is hereby clarified that this Circular is applicable only to those infrastructure projects for development of road/highways on BOT basis where ownership is not vested with the assessee under the concessionaire agreement."(Emphasis Supplied) From the above it is evident that no addition/disallowance is required to be made in respect of deduction already allowed in the earlier years 13 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 where the total deduction so claimed for the prior assessment years, is deducted from the initial cost of infrastructure facility of roads/highways and the such reduced cost is amortized equally over the remaining period of toll concessionaire agreement. Accordingly, the addition made by the Learned CIT(A) in respect of excess depreciation claimed by the Assessee in the prior years is deleted. At the same time, while complying with our directions in paragraph 12 above, the Assessing Officer is directed to verify that the depreciation claimed by the Assessee for the prior assessment years has been deducted from the initial cost of infrastructure facility of roads/highways and that the deduction of amortization expenses has been claimed and is allowed only in respect of the cost so reduced.
14. In terms of directions given in paragraph 12 and 13 above, Ground No. 1 & 2 raised by the Assessee are partly allowed.
15. In result, the present appeal preferred by the Assessee is partly allowed ITA No.4523/Mum/2025 [Assessment Year 2013-2014]
16. Next we would take up the appeal preferred by the Assessee directed against the order, dated 01/06/2023, passed by Learned CIT(A) under Section 250 of the Act whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 28/03/2016, passed under Section 143(3) of the Act for the Assessment Year 2013-2014.
1. The Assessee has raised following grounds of appeal:
"1. The Ld. CIT(A), NFAC, Delhi, erred in not appreciating that the Ld. Assessing Officer ("Ld. AO") had erred in disallowing Rs.20,04,17,670/- out of depreciation claimed without appreciating the facts and circumstances of the case.
2. Without prejudice to Ground No. 1, the Ld. CIT(A), NFAC, Delhi, erred in not appreciating the fact that the Ld. AO had allowed only an amount of Rs.19,04,51,384/- on account of amortization as against the claim of assessee of Rs.77,12,92,535/- raised by way of Additional Ground of Appeal.."14
ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014
2. There is no change in the facts and circumstances as compared to those prevailing in the Assessment Year 2012-2013. Both sides agreed that our findings/adjudication in relation to appeal for the Assessment Year 2012-2013 shall apply mutatis mutandis to the appeal for the Assessment Year 2013-2014. Accordingly, adopting the reasoning given while adjudicating the appeal preferred by the Assessee for the Assessment Year 2012-2013, we condone the delay of 685 days in filing the present appeal. Further, Ground No. 1 & 2 raised by the Assessee are partly allowed with directions identical to those given while adjudicating corresponding grounds raised in appeal for the Assessment Year 2012-2013 contained in paragraph 12 & 13 above.
3. In result, in terms of above, the appeal preferred by the Assessee is partly allowed.
ITA No.1181/Mum/20264. Next we would take up the appeal preferred by the Assessee directed against the order, dated 24/12/2025, passed by Learned CIT(A) under Section 250 of the Act whereby the Learned CIT(A) had dismissed the appeal against the Penalty Order, dated 30/03/2025, passed under Section 271(1)(c) of the Act levying penalty of INR.6,18,29,060/- for the Assessment Year 2013-2014.
5. The Assessee has raised following grounds of appeal:
"1. The Ld CIT(A), NFAC, erred in sustaining the Penalty Order passed under section 271(1)(c) for furnishing inaccurate particulars of income without appreciating the full facts and circumstances of the case and the Appellate Order is liable to be set aside.
2. The Ld CIT(A), NFAC, erred in not considering the fact that the Ld AO had initiated penalty proceedings while passing the Assessment Order in a mechanical manner without specifying as to whether the assessee had concealed the particulars of income or had furnished inaccurate particulars of income and the proceedings were vague and ambiguous.
3. The Ld CIT(A), NFAC, erred in not appreciating that the Ld AO imposed penalty for furnishing inaccurate particulars of income 15 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 though he had not initiated the penalty proceedings specifically on this ground which has rendered the Penalty Order bad in law.
4. The Ld CIT(A), NFAC, erred in not appreciating that for levy of penalty under section 271(1)(c) it must be demonstrated that the conditions provided in this section existed.
5. The Ld CIT(A), NFAC, erred in not appreciating that the assessee had not furnished inaccurate particulars with regard to depreciation while filing the Income Tax Return and the Circular No. 09/2014 of the CBDT directing allowance of amortization was issued on 23.04.2014, much after 30.11.2013 which was the date of filing of ITR by the assessee
6. The Ld CIT(A), NFAC, erred in not appreciating that the issue in respect of which penalty was imposed was highly debatable and no penalty under section 271(1)(c) was to be imposed in respect of disallowance of debatable nature
7. Without prejudice to the Ground Nos. 1 to 6, the Ld CIT(A) erred in not appreciating that under identical facts and circumstances in the AY 2012-13, penalty proceedings under section 271(1)(c) were initiated in the Assessment Order but the penalty was not imposed. The Ld AO should have followed the principle of consistency and dropped the penalty proceedings in the A Y 2013-14 also.
6. Since we have set aside the addition/disallowance made by the Assessing Officer/CIT(A), the very basis on which penalty was levied under Section 271(1)(c) of the Act for the Assessment Year 2013-2014 does not survive. Further, we also find merit in the contention of the Assessee that the issue involved (noted in paragraph 6 to 9 above in the context of assessment year 2013-2013) was highly debatable and that the Circular No. 9 of 2014 clarifying the position was issued by the CBDT on 23/04/2014 which is much after the return of income for the Assessment Year 2013-2014 was filed by the Assessee on 30/11/2013. We note that though penalty proceedings were initiated for the Assessment Year 2012-2013, wherein identical addition/disallowance was made in the hands of the Assessee, no penalty has been levied on the Assessee. In view of the aforesaid, we hold that in the facts and circumstances of the present case the penalty of levied under Section 271(1)(c) of the Act cannot be sustained and the same is hereby deleted. Thus, Ground 5 and 6 raised by the Assessee are allowed while the rest of the grounds are dismissed as having been rendered 16 ITA No.4525, 4523/Mum/2025, ITA No.118/Mum/2026 & S.A. No.51/Mum/2026 Assessment Year 2012-2013 & 2013-2014 academic.
7. In result, the Appeal preferred by the Assessee is allowed.
8. In conclusion, quantum appeals for the Assessment Year 2012-2013 [ITA No.4525/Mum/2025] and 2013-2014 [ITA No.4523/Mum/2025] are partly allowed, while penalty appeal for the Assessment Year 2013- 2014 [ITA No.1181/Mum/2026] is allowed. Since we have allowed the penalty appeal, the Stay Application [S.A.No.51/Mum/2026] filed is dismissed as having rendered as infructuous by way of a separate order.
Order pronounced on 28.04.2026.
Sd/- Sd/-
(Vikram Singh Yadav) (Rahul Chaudhary)
Accountant Member Judicial Member
मुंबई Mumbai; िदनां क Dated : 28.04.2026
Milan,LDC
17
ITA No.4525, 4523/Mum/2025,
ITA No.118/Mum/2026 & S.A. No.51/Mum/2026
Assessment Year 2012-2013 & 2013-2014
आदे श की ितिलिप अ े िषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. आयकर आयु / The CIT
4. धान आयकर आयु / Pr.CIT
5. िवभागीय ितिनिध ,आयकर अपीलीय अिधकरण ,मुं बई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानु सार/ BY ORDER, स ािपत ित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुं बई / ITAT, Mumbai 18