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3. Aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR has submitted that the assessee was not the owner of the impugned asset to allow depreciation on the same at applicable rates and that the asset has to be transferred back to the National Highways Authority of India after the end of the concession period as per the agreement entered into. It was the further submission that the vide Circular No. 9/2014 dated 23.04.2014, the CBDT has clarified that the cost of construction on development of infrastructure facilities of roads/highways under BOT projects may be amortised and claimed as allowable business expenditure under the Act and thus, pleaded for reversing the appellate order. On the other hand, the ld.

Counsel for the assessee has submitted that the issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case for earlier assessment year and prayed that the same should be followed.

4. We have heard both the parties, peruse the materials available on record and gone through the orders of authorities below. The assessee has claimed depreciation of ₹.250,96,56,279/- treating the toll collection right as an 'intangible asset', in support of which, the assessee made elaborate submissions before the Assessing Officer during the course of assessment proceedings. In nutshell, the assessee is a Special Purpose Vehicle incorporated on 16.02.2009 for the purpose of conversion of two lane to six lane of NH3 from KM 380 to KM 440, Pimpalgon Nasik Gonde Section in Nasik District of Maharashtra State under design, build, finance, operate and transfer (DBFOT) basis vide concession agreement dated 08.07.2009 signed with National Highway Authority of India. The concession period is 20 years which included construction period of 30 months and the concession period ends in the year 2029. During the financial year 2012-13, the partial commercial operation achieved from 01.10.2012. For this purpose, the assessee has entered into a concession agreement with NHAI on Build, Operate and Transfer (BOT) basis. The assessee has capitalized the total collection right as an intangible asset and claimed depreciation on the same at the rate applicable to intangibles. The Assessing Officer has not accepted the above claim of the assessee in view of the CBDT Circular No. 9 of 2014 dated 23.04.2014, instead, allowed amortization of the total cost of construction incurred on development of infrastructure facility by the assessee under BOT over a period of 20 years which is equivalent to the concession period granted by BHAI for collection of toll. Since the construction period was of 30 months, the balance operational period is of 17½ years. As per the assessment order, the operational period start from the financial year 2012-13 and the first year of operational period was ended on 31.03.2013. The Assessing Officer has adopted the base value of intangible asset (toll way) at ₹.637,69,26,090/- as on 01.04.2012 and then computed the amortization of the said cost for the rest of 17½ years of the agreement, as a result of which the expenditure to be amortized for the assessment year under consideration is computed at ₹.100,14,78,267/-. The difference of ₹.150,81,78,012/- between the depreciation claimed by the assessee at ₹.250,96,56,279/- and the amortization allowed by the Assessing Officer at ₹.100,14,78,267/- was disallowed and added back to the loss returned. On appeal, by following the decision of the Tribunal in assessee's own case for the assessment year 2013-14 in I.T.A. No. 3233/Chny/2017 dated 10.05.2018, the ld. CIT(A) directed the Assessing Officer to allow the assessee's claim of depreciation at the rate of 25% treating the toll way rights as an intangible asset under section 32(1)(ii) of the Act and deleted the addition of ₹.150,81,78,012/-. We have perused the order passed in assessee's own case for the assessment year 2013-14 wherein, similar issue was subject matter in appeal, wherein, by following the Special Bench decision of Hyderabad Benches of the Tribunal in the case of M/s. Progressive Constructions Limited in I.T.A. No. 1845/Hyd/2014 dated 14.02.2017, the Coordinate Benches of the Tribunal has observed and held as under:

"5. Before us, ld. A.R submitted that this issue was squarely covered by the decision of Special Bench of this Tribunal in the case of M/s. Progressive Constructions Ltd. Hyderabad in ITA No.1845/Hyd./2014 & C.O No.36/Hyd./2015 filed by the assessee for assessment year 2011-12 dated 14.02.2017 wherein the question raised before the Special Bench as under:-

"Whether on the facts and in the circumstances of the case, expenditure incurred by the assessee on construction of road on BOT basis is Capital or Revenue? If it is capital expenditure, whether the same is eligible for depreciation at the rate applicable to building or to an intangible asset as per section 32(1(ii)? And, if not, whether the same being Revenue expenditure is liable to be amortized over the period of concession?
v) The concessionaire shall have the right to levy / demand and collect fee as approved by the Government of India towards user of the project facilities by vehicles and persons.

11. Undisputedly, for executing the project, assessee has incurred expenses of Rs.214 crore. It is also not disputed that as per the terms of the C.A., the Government of India is not obliged / required to reimburse the cost incurred by the assessee to execute / implement the project facilities. The only right / benefit allowed to the assessee by the Government of India is to operate the project / project facilities during the concession period of 11 years 7 months and to collect toll charges from vehicles / persons using the project / project facilities. Thus, as could be seen, the only manner in which the assessee can recoup the cost incurred by it in implementing the project / project facility is to operate the road during the concession period and collect the toll charges from user of the project facility by third parties. Admittedly, the assessee has taken up the project as a business venture with a profit motive and certainly not as a work of charity. Further, by investing huge some of Rs.214 crore, the assessee has obtained a valuable business / commercial right to operate the project facility and collect toll charges. Therefore, in our considered opinion, right acquired by the assessee for operating the project facility and collecting toll charges is an intangible asset created by the assessee by incurring the expenses of Rs.214 crore. The contention of the learned Senior Standing Counsel that expenditure of Rs.214 crore has brought into existence a tangible asset in the form of roads and bridges of which the assessee is not the owner but it is the Government of India is nobody's case. Further, the learned Senior Standing Counsel's apprehension that it will lead to a situation where both Government of India and the concessionaire will claim depreciation on the asset created with the very same expenditure, in our view, is not borne out from facts on record. At the cost of repetition we must observe, as per the terms of agreement the expenses incurred by the assessee towards construction of the roads, bridges, etc., were not going to be reimbursed by the Government of India. This fact was known to both the parties before the execution of the agreement as the tender itself has made it clear that the project is to be executed with private sector participation on BOT basis. Thus, from the very inception of the project, assessee was aware of the fact, it has to recoup the cost incurred in implementing the project along with the profit from operating the road and collecting toll charges during the concession period. Therefore, assessee has capitalized the cost incurred on the BOT project on which it has claimed depreciation. Thus, in our view, the expenditure incurred by the assessee of Rs.214 crore for creating the project or project facilities has created an intangible asset in the form of right to operate the project facility and collect toll charges. Further, it is the contention of the learned Senior Standing Counsel that if at all any right is created under the C.A. for collecting toll, such right accrued to the assessee on the date of execution of agreement i.e., 22nd December 2005, therefore, the expenditure incurred by such date should be the value of intangible asset which can alone be considered for depreciation under section 32(1)(ii) of the Act. We are afraid, we cannot accept the above argument of the learned Senior Standing Counsel. When the C.A. confers a right on the assessee to operate the project facility and collect toll charges over the concession period of 11 years and 7 months, the assessee can start operating and collecting toll charges only when the project facility is ready for use. Therefore, until the project is completed and ready for use by vehicles or persons assessee cannot collect toll charges for user of the project facilities. Thus, the right to operate the project facility and collect toll charges is integrally connected to the completion of the project facility which cannot be done unless the assessee invests its fund for completing the project. Therefore, keeping in view the aforesaid fact, it cannot be said that the right to collect toll has accrued to the assessee on the date of execution of the agreement. If we accept the aforesaid argument of the learned Senior Standing Counsel, in other words, it would mean that without even executing and completing the project facility, assessee would be collecting toll charges. Therefore, the contention of the learned Senior Standing Counsel that the expenditure incurred by the assessee till execution of the agreement can only be considered as an intangible asset, in our view, is illogical, hence, cannot be accepted. Thus, having held that the expenditure of Rs.214 crore incurred by the assessee has resulted in creation of an intangible asset of enduring nature for the assessee, it is necessary now to examine whether such intangible asset comes within the scope and ambit of section 32(1)(ii) of the Act. For this purpose, it is necessary to look into the said provision which is reproduced hereunder for the sake of convenience.