Income Tax Appellate Tribunal - Pune
Income Tax Officer,, vs M/S. Hotel Surya Pvt.Ltd,, Pune on 28 March, 2018
आयकर अपील
य अ धकरण] पण
ु े यायपीठ "ए" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
BEFORE MS. SUSHMA CHOWLA, JM AND
SHRI ANIL CHATURVEDI, AM
आयकर अपील सं
. / ITA Nos.60 to 66/PUN/2016
नधा रण वष / Assessment years : 2005-06 to 2011-12
The Asst.Commissioner of Income Tax,
Central Circle - 1, Nashik. .......... अपीलाथ /
Appellant
बनाम v/s
M/s. Ashoka Infraways Pvt Ltd., .......... यथ /
S.No.861, Ashoka House,
Respondent
Ashoka Marg, Wadala,
Nashik - 422 011.
PAN : AADCA4889P.
या ेप सं
. / CO Nos.114 to 119/PUN/2017
(Arising out of ITA Nos.60 to 65/PUN/2016
नधा रण वष / Assessment Years : 2005-06 to 2010-11
M/s. Ashoka Infraways Pvt Ltd., ....... Cross-Objector
S.No.861, Ashoka House,
Ashoka Marg, Wadala,
Nashik - 422 011.
PAN : AADCA4889P.
बनाम v/s
The Asst. Commissioner of Income Tax, ....... Appellant in the
Central Circle - 1, Nashik. appeal.
Assessee by : None.
Revenue by : Shri Rajeev Kumar, CIT.
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 27.03.2018 Date of Pronouncement: 28.03.2018
2
आदे श / ORDER
PER SUSHMA CHOWLA, JM :
1. The Revenue has filed present appeals against the consolidated order of Commissioner of Income Tax (Appeals) - 12, Pune dated 27.10.2015 relating to assessment years 2005-06 to 2011-12 against the order passed under Section 143(3) r.w.s. 153C of the Income Tax Act, 1961 (in short 'the Act'). The assessee has filed Cross-Objections against the appeals filed by the Revenue relating to assessment years 2005-06 to 2010-11.
2. The appeals filed by Revenue and the Cross-Objections filed by the assessee were heard together and are being disposed of by this consolidated order for the sake of convenience. However, in order to adjudicate, we are referring to the facts and issue in ITA No.60/PUN/2016 and C.O.No.114/PUN/2017.
3. The Revenue in ITA No.60/PUN/2016 has raised the following grounds of appeal :
"1. On the facts and circumstances of the case and in law the ld. CIT(A) has erred in deleting in allowing the depreciation at 25% on 'Licence to collect toll'.
2. On the facts and circumstances of the case and in law the ld. CIT(A) was justified in holding that assessee was eligible to claim depreciation on 'Licence to collect toll' considering it as an intangible asset in terms of section 32(1)(ii) of the Act.
3. On the facts and circumstances of the case and in law the ld. CIT(A) has failed to appreciate that the department has not accepted the decision of the ITAT, Pune and an appeal has been filed under Section 260A of the Act before the Hon'ble Bombay High Court.
4. The appellant craves to add, amend or delete any of the above grounds.3
4. The assessee in C.O.No.114/PUN/2017 has raised the following Cross-Objections:
"The learned CIT(A) erred in not deciding the ground Nos.1, 2 and 3 relating to the validity of the Notice issued under Section 153C, the proceedings for assessment under Section 153C r.w.s. 143(3) and the assessment order passed under Section 153C r.w.s. 143(3), on the ground that, appellant's appeal is allowed on merits. Therefore, it is prayed to allow appellant's ground challenging the validity of Notice under Section 153C, assessment proceedings under Section 153C and the assessment order passed under Section 153C r.w.s 143(3).
2. Appellant craves leave to add, amend or modify any ground of appeal before or at the time of hearing.
5. The issue raised in the appeal filed by the Revenue is against the order of Commissioner of Income Tax (Appeals) in allowing the depreciation at 25% on licence to collect toll. Despite service of notice, none appeared on behalf of the assessee nor any application has filed for adjournment. However, the issue arising in the present appeal is squarely covered by the series of the decisions of the Tribunal and also the case of the assessee itself. Hence, we proceed to dispose of the present bunch of appeals and Cross- Objections after hearing the Ld.D.R. for the Revenue.
6. Briefly in the facts of the case, the assessee had originally filed the return of income declaring nil. The assessee was engaged in infrastructure development and maintenance of toll stations. The holding company M/s. Ashoka Buildcon was awarded the construction of Dewas By-pass starting from k.m 159/4 of Bhopal- Ujjain Road (SH-18) and joining km 577/6 of Agra Bombay Road, (N.H.3) intersecting NH-3 in km 567/8 and SH 18 in km 151/8 (total length - 19.8 kms) including construction of one medium bridge, 27 nos. of culverts, junctions and rotaries, protection work, 4 toll tax barriers and booth, plantation, fencing, truck parking lay- bye and longitudinal drains etc. on BOT (Build Operate & Transfer) basis. The said Ashoka Buildcon Ltd., had assigned all its rights and obligation under the said contract in favour of the company. The company was entitled to collect toll tax for 3999 days after Toll notification date i.e. from 24th May 2014 till 6th May 2015. Thus assessment year 2005-06 was the first year of operation of the assessee's business activity. As per director's report, the assessee Company had commissioned the project on 23rd May 2004. The assessee company, as per directions of the PWD, MP, was collecting Toll only at one plaza instead of 3 toll plazas and the company was in the process of ascertaining the compensation receivable from PWD for loss of toll. In the return of income the assessee had claimed depreciation on 'intangible asset' being right to collect the toll during the period involved in the Government Notification granting such rights (11 years). Such depreciation was claimed at 25% on the reducing balance method for the income-tax purposes at Rs.15,26,38,581/-. The amount of licence was included in the gross block of assets Rs.61,05,54,325/- being the first year's opening value. The span of the said right as per the notification was May, 2004 to May 2015, i.e. for the period of 136 months. The Assessing Officer in the original assessment had denied the claim of depreciation on the right to collect toll holding the same not to be an intangible asset. However, the Commissioner of Income Tax (Appeals) reversed the order of Assessing Officer.
7. Search and seizure action under Section 132 of the Act was carried out in the Ashoka Group of cases on 20.04.2010. During 5 the course of search, incriminating documents pertaining to the assessee company were seized from the searched premises of M/s. Ashoka Buildcon Ltd. The proceedings were initiated against the assessee under Section 153C of the Act. In response to notice issued by the Assessing Officer under Section 153C of the Act, the assessee filed return of income declaring total income at nil. The assessment proceedings were taken up for scrutiny. During the course of the proceedings, the assessee vehemently stated that when the Commissioner of Income Tax (Appeals)'s order reversing the order of the Assessing Officer in the original assessment had attained finality, the decision becomes binding as far as the Assessing Officer was concerned. The Assessing Officer rejecting the said plea of the assessee and in view of the fact that the order of CIT / ITAT were subjudiced before the higher Appellate Forum held that the matter had not reached finality. Hence, the depreciation claimed on the right to collect toll was held not to be allowable to the assessee.
8. The Commissioner of Income Tax (Appeals) first decided the validity of the notice issued under Section 153C of the Act and held the same against the assessee. In response to the issue raised on merits, the Commissioner of Income Tax (Appeals) observed that the Tribunal in assessee's own case in ITA Nos.185 and 186/PN/2012 for assessment years 2006-07 and 2007-08, order dated 29.04.2013 had held the assessee to be entitled to claim depreciation @ 25% on the right to collect toll by treating the same as intangible asset. The assessee was eligible for depreciation. The relevant findings of the Tribunal are reproduced at Pages 11 and 12 of the Appellate Order. The Commissioner of Income Tax (Appeals) 6 following the same, directed the Assessing Officer to allow the depreciation @ 25% as claimed by the assessee and also directed the Assessing Officer to withdraw the reduction allowed on amortization of costs for assessment year 2005-06.
9. The Revenue is in appeal against the order of Commissioner of Income Tax (Appeals). On perusal of the records, we find that the assessment in the present case was completed under Section 153C of the Act r.w.s. 143(3) of the Act. Though, the assessee did not put in an appearance before the Tribunal, however, the assessee has filed the Paper Book which is available on record. The issue which is raised in the appeal of Revenue is against the claim of depreciation on the right to collect toll, being an intangible asset. The Assessing Officer was of the view that no such depreciation was allowable. Whereas, the Commissioner of Income Tax (Appeals) following the earlier order of the Tribunal (supra) in assessment years 2006-07 and 2007-08 allowed the claim of the assessee. The copy of the said order of the Tribunal is available at Pages 45 to 51 of the Paper Book. The year under appeals are starting from assessment years 2005-06 to 2011-12. The assessment has been completed as pointed earlier under Section 153C r.w.s 143(3) of the Act. In the first instance, we hold that the assessee is entitled to the claim of depreciation at 25% on the right to collect toll being an intangible asset. Accordingly, we uphold the order of Commissioner of Income Tax (Appeals) in this regard and also uphold the direction to the Assessing Officer to withdraw the deduction allowed on amortization of the costs for assessment year 2005-06. The relevant portion of the order of the Tribunal are reproduced in the order of the Commissioner of Income Tax (Appeals) at 7 Pages 11 and 12 and the for the sake of brevity, though we are referring to the same but are not reproducing the same.
10. It may be pointed out that similar issue also arose before the Tribunal in the case of Ashoka Infrastructure Ltd., in ITA Nos.1452 to 1457/PN/2014 relating to assessment years 2006-07 to 2011-
12. Similar issue arose in the said appeal and was decided in favour of the assessee. The copy of the said order is available at Pages 54 to 93 of the Paper Book filed by the assessee. Accordingly, we dismiss the grounds of the appeal of Revenue.
11. Before parting, we may also refer to the order of Assessing Officer passed under Section 143(3) r.w.s 153C of the Act where he has raised an issue of disallowance of depreciation as right to collect toll which was already adjudicated in the 143(3) proceedings against the assessee. Once the issue had already been decided then on similar ground, the Assessing Officer is precluded from again disallowing claim of the assessee in the order passed under Section 143(3) r.w.s 153C of the Act.
12. The facts and issues raised in ITA Nos.61/PUN/2016 to 66/PUN/2016 are identical to the facts and issues raised in ITA No.60/PUN/2016 and accordingly, our decision in ITA No.60/PUN/2016 would apply mutatis-mutandis to ITA Nos.61/PUN/2016 to 66/PUN/2016.
13. Now coming to the Cross-Objections filed by the assessee, which are against the invoking of jurisdiction under Section 153C 8 of the Act. The said issue becomes academic in view of our deciding the issue on merits in favour of the assessee and in the absence of the assessee raising any argument in this regard. We dismiss the same being academic. Therefore, all the C.O. Nos.114/PUN/2017 to 119/PUN/2017 are dismissed as academic.
14 In the result, the appeals filed by the Revenue and the Cross- Objections filed by the assessee are dismissed.
Order pronounced on 28th day of March, 2018.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
लेखा सद$य / ACCOUNTANT MEMBER या यक सद$य / JUDICIAL MEMBER
पण
ु े Pune; दनांक Dated : 28th March, 2018.
Yamini
आदे श क% त'ल(प अ)े(षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. CIT(Appeals)-12, Pune. / CIT concerned.
4. "वभागीय %त%न&ध, आयकर अपील य अ&धकरण, "ए" / DR, ITAT, "A" Pune;
5. गाड, फाईल / Guard file.
आदे शानस ु ार/ BY ORDER // True Copy // व.र/ठ %नजी स&चव / Sr. Private Secretary आयकर अपील य अ&धकरण ,पण ु े / ITAT, Pune.