Income Tax Appellate Tribunal - Pune
Dimension Construction P. Ltd., vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
Pune Bench A, Pune
Before Shri Shailendra Kumar Yadav, Judicial Member
and Shri G.S. Pannu, Accountant Member
I.T.A. No. 222, 223, 233 & 857/PN/2009
A.Y. 2002-03, 2004-05, 2003-04 & 2006-07
Dimension Construction Pvt. Ltd.,
1148/E, Skyes Extension
Kolhapur
PAN AABCD 2744 C Appellant
Vs.
Dy. CIT Cir. 2, Kolhapur Respondent
Appellant by: Shri M.K. Kulkarni
Respondent by: Shri H.C. Leuva
ORDER
PER SHAILENDRA KUMAR YADAV, JM
All these four appeals pertain to the same assessee. So they are being disposed off by a common order for the sake of convenience. First three appeals viz. ITA No. 222, 223 and 233/P/2009 arise against the consolidated order of the CIT(A) Kolhapur dated 17-9-2008 for A.Y. 2002-03, 2004-05 and 2003-04 respectively while appeal in ITA No. 857/PN/2009 is directed against the order of the CIT(A) Kolhapur dated 11-5-2009 for A.Y. 2006-07.
ITA No. 222/PN/2009 for A.Y. 2003-04
2. In this appeal, the grounds raised by the assessee are as under:
Page 2 of 6
ITA No. 222, 223, 233 & 857/PN/2009 Dimension construction A.Y. 2002-03, 2004-05, 2003-04 & 2006-07
1) On the facts and in the circumstances of the case and in law the exparte assessment completed under Section 144 of the Act is not justified and it be set aside.
2) On the facts and in the circumstances of the case and in law the Ld. C.LT. (A) erred in upholding the action of the A.O. of initiating the action under Section 147 of the Act when valid revised return filed was pending for assessment as on the date of issue of notice u/s 148 of the Act. In view of this the assessment being without jurisdiction be annulled.
3) On the facts and in the circumstances of the case and in law whether the Ld. C.LT. (A) was justified in confirming the rejection of the claim of depreciation on Intangible asset namely right to collection of toll from the Road over bridge on the parity of reasoning that the appellant was not the owner in spite of the fact that the 'collection' was treated as income of the appellant company and was also approved by the State Government.
4) On the facts and in the circumstances of the case and in law whether the precedent of judicial verdicts where expenditure was on leasehold/rental assets relied upon by Ld. C.IT. (A) are applicable to the facts of the case of the appellant company to hold that the expenditure of Rs. 2,79,95,870/- was revenue expenditure and was allowable deduction as such to deny the claim of depreciation?
5) On the facts and in the circumstances of the case and in law and on the same parity of reasoning the Ld. C.LT. (A) ought -to have allowed the expenditure of Rs. 3,18,76,733/- in A.Y. 2002-03 incurred in A.Y. 2001-02 which was carried forward in the assessment year under appeal without any income against it as according to ld. CIT(A) there was no 'capital expenditure' at all. In view of this the said expenditure carried forward be allowed as 'revenue expenditure' in the year under appeal.
6) On the facts and in the circumstances of the case and in law whether the appellant-assessee company was eligible for the claim of deduction under section 80-IA of the Act in the circumstances when the assessee itself makes the investment and itself executes the development work as has been done by this assessee and the amendment introduced by inserting an explanation retrospectively wef. A.Y. Page 3 of 6 ITA No. 222, 223, 233 & 857/PN/2009 Dimension construction A.Y. 2002-03, 2004-05, 2003-04 & 2006-07 2000-01 by Finance Act, 2007, and relevant C.B.D.T. Circular No.3 of 2008, becomes applicable to it?
7) On the facts and in the circumstances of the case and in law the Ld. A.O. was not justified in levying interest u/s. 234-B/234-C of the Act and the same be deleted.
8) The appellant craves to leave, add/amend or alter any of the above grounds of appeal."
3. The learned AR did not press grounds no. 1 & 2. They are therefore, dismissed as not pressed.
4. The next issue is regarding depreciation on intangible asset namely right to collection of toll from the road over bridge on the parity of reasoning that the assessee was not the owner. In this regard, the learned AR pointed out that this issue is covered by the order of the Tribunal Pune Bench, Pune in the case of Ashoka Info (P) Ltd. Vs. Asstt. CIT (2009) 123 TTJ (Pune) 77 wherein with regards to intangible assets and toll collection rights the Tribunal observed that the investment made by the assessee towards construction of a road on built, operate and transfer (BOT) basis in terms of an agreement with the State Government and thereafter an independent right in the form of a licence of toll collection was granted to the assessee for a fixed period of 16 years and 9 months. Applying the doctrine of ejusdem generic for the purpose of interpretation of sec. 32(1)(ii), the word "licence" could be read along with the Page 4 of 6 ITA No. 222, 223, 233 & 857/PN/2009 Dimension construction A.Y. 2002-03, 2004-05, 2003-04 & 2006-07 words "commercial rights of similar nature". Therefore, the licence granted by the State Government for collection of toll was held as an intangible asset and depreciation was held to be allowable thereon. Nothing contrary was brought to our knowledge. Facts being similar, so following the same reasoning, we hold that the assessee was entitled to claim of depreciation on intangible asset viz. right to collect toll from the road over the bridge on the parity of reasoning that the assessee was not the owner inspite of the fact that the collection was treated as income of the assessee company and was also approved by the State Government.
5. In view of our finding on ground no. 3, the issue raised in grounds no. 4 and 5 goes academic and therefore, they were not addressed by the learned AR. So they are dismissed being academic in nature.
6. The next issue is with regards to allowability of claim of deduction u/s 80-IA of the Act. In this regard, learned AR drew our attention to the decision of Hon'ble Bombay High Court in the case of CIT Vs ABG heavy Industry Ltd. & Others (2010) 37 DTR (Bom) 233 wherein in similar set of facts, Hon'ble Bombay High Court held as under :
"Assessee having entered into a contract for supply, installation, testing, commissioning and maintenance of container handling cranes at JNPT for a term of ten Page 5 of 6 ITA No. 222, 223, 233 & 857/PN/2009 Dimension construction A.Y. 2002-03, 2004-05, 2003-04 & 2006-07 years whereafter the same would vest in the latter, it was entitled to deduction u/s 80-IA. Amendment of sec. 80-IA(4A) by Finance Act, 2001 has set the matter beyond any controversy that the three conditions viz., development, operation and maintenance were not intended to be cumulative in nature."
7. Further, it was submitted that it is a legal ground which can be raised at any time. According to the arguments of learned AR the issue has been decided by the Hon'ble Bombay High Court subsequent to the decision by the CIT(A) and hence there was no occasion for the assessee to raise this issue in this manner before the authorities below. The issue being legal in nature and can be raised at any stage as rightly submitted by the learned AR. Since this issue has not been discussed and decided by the lower authorities, because they were nmot having advantage of decision of Hon'ble Bombay High Court in the case of ABG Heavy Industry Ltd & Others (supra) at the relevant point of time. In the interest of justice, we restore this issue to the file of the Assessing Officer to decide the same as per fact and law after providing adequate opportunity of hearing to the assessee.
8. Similar issues have been raised by the assessee in other years. Facts being similar so, following the same reasons the issues raised in other years are decided in similar way for other years as well.
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ITA No. 222, 223, 233 & 857/PN/2009 Dimension construction A.Y. 2002-03, 2004-05, 2003-04 & 2006-07
9. In the result, all the appeals are partly allowed as indicated above.
Decision pronounced in the open court on 18th March 201.
Sd/- sd/-
(G.S. Pannu) (Shailendra Kumar Yadav)
Accountant Member Judicial Member
Pune dated the 18th March 2011
Ankam
Copy of the order is forwarded to :
1. The Appellant
2. The Respondent
3. The CIT- (A) Kolhapur
4. The CIT- Kolhapur
5. The D.R, 'A' Bench, Pune
By order
Assistant Registrar
Income Tax Appellate Tribunal
Pune