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7. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, and also the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought by the revenue for adjudicating as to whether the CIT(A) is right in law and the facts of the case in concluding that the assesses claim for depreciation on "license to collect toll", being an intangible asset, falling within the scope of Sec. 32(1)(ii) of the Act, was as per the mandate of law. It is the claim of the revenue, that the issue is covered against the assessee by the judgments of the Hon‟ble High Court of Bombay in the case of North Karnataka Expressway Ltd. Vs. CIT-10 (2015) 272 ITR 145 (Bom) and CIT Vs. West Gujarat Expressway Ltd. (2017) 390 ITR 398 (Bom). On the contrary, it is the claim of the assessee that the issue raised in the aforesaid cases was confined to the aspect, as to whether an Infrastructure Development Company which had constructed a "toll road" on BOT basis on land owned by the Central Government would be entitled for depreciation on the same, or not. It is the claim of the ld. A.R, that as the issue as to whether an Infrastructure Development Company which had constructed a "toll road" on BOT basis on land owned by the Central Government would be entitled towards claim of depreciation under Sec. 32(1)(ii) in respect of its intangible rights i.e. "right to collect toll", was neither raised before or adjudicated upon by the Hon‟ble High Court in either of te aforesaid cases, therefore, the reliance placed by the revenue on the said judicial pronouncements which were distinguishable in the backdrop of the issue involved in the said matters, would thus not assist its case.

for both the parties. Admittedly, as the assessee which being an Infrastructure Development Company had constructed the "toll road" on build, operate and transfer (BOT) basis on the land owned by the Central Government, not being the owner of the said road would not be eligible for claim of depreciation on the same. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of North Karnataka Expressway Ltd. Vs. CIT- 10(2015) 272 ITR 145 (Bom). A perusal of the order reveals, that the Hon‟ble High Court had after exhaustively deliberating on the provisions of the National Highway Act, 1956, had therein observed, that though the Central Government as per Sec. 8-A of the National Highway Act, 1956 is empowered to enter into an agreement with any person in relation to the development and maintenance of the whole or any part of a National Highway, but that in no way would affect the vesting of the National Highways in the Union. It was observed, that the ownership of the National Highway as stands vested with the Central Government under Sec.4 of the National Highway Act, 1956, would not be diluted for the reason that the Central Government as per Sec.8-A (supra) had entered into an agreement with any person for development and maintenance of the whole or any part of the National Highway. To sum up, the Hon‟ble High Court had concluded that an Infrastructure Development Company which had constructed a „toll road‟ on build, operate and transfer (BOT) basis on the land owned by the Government, not being the owner of the said road would thus not be entitled for depreciation on the same. At this stage, we may herein observe, that the Hon‟ble High Court while concluding as hereinabove, had also observed, that as the assessee had invested in the project of construction, development and maintenance of the National Highway, therefore, claim for depreciation on the assets in the form of building and plant & machinery etc. can be validly raised and granted. Also, the Hon‟ble High Court in its order had referred to the observations recorded by the CIT in his under passed under Sec.263 of the Act, wherein he had while declining the assesses claim for depreciation on „toll road‟ had categorically stated, that it was not the case of the assessee that the claim of depreciation was being raised in respect of its intangible rights i.e right to use the asset without being the actual owner of the same.

Expressway Ltd. (ITA No. 2357 of 2013, dated 05.04.2016). We find that both of the aforementioned judgements of the Hon‟ble jurisdictional High Court were rendered in context of the issue, as to whether an Infrastructure Development Company which had constructed a „toll road‟ on BOT basis on the land owned by Central Government would be entitled for depreciation on such "toll road", or not. We find that the Hon‟ble High Court had observed that in the absence of ownership of the „toll road‟, which belonged to the Central Government, the assessee would not be entitled to claim depreciation on the same. The issue as to whether an Infrastructure Development Company which had constructed a „toll road‟ on BOT basis on the land owned by Central Government would be entitled to claim depreciation under Sec.32(1)(ii) in respect of its "right to collect toll" i.e an intangible asset, was not raised in both of the aforesaid cases. Our aforesaid view stands fortified from a perusal of the order of the Hon‟ble High Court in the case of North Karnataka Expressway Ltd. Vs. CIT-10(2015) 272 ITR 145 (Bom), wherein at Para 20 the Hon‟ble High Court had observed, that the question before them was as to when a person who is in the business of Infrastructure Development constructs a road on build, operate and transfer (BOT) basis on the land owned by the Government, can it claim depreciation on such „toll road‟. We find that the Hon‟ble High Court had observed that though an Infrastructure Development company which had constructed a road on BOT basis on land owned by the Central Government, was not entitled to claim depreciation on the „‟toll roads" as it was not owner of the same, however, it could definitely claim depreciation on its investments made in the project and such other asset in the form of building and plant and machinery etc. Accordingly, it was observed by the Hon‟ble High Court at Para 47 of its order, that the claim for depreciation could be validly raised and granted to the extent stated hereinabove. Also, it was observed by the Hon‟ble High Court that it was concerned only with the claim of the assessee as regards depreciation on the road itself. To sum up, the Hon‟ble High Court in its aforesaid judgment, had confined its adjudication to the issue as to whether an Infrastructure Development Company which had constructed a road on BOT basis on land owned by the Central Government would be eligible to claim depreciation on such „toll road‟ so constructed and operated by it, or not. Accordingly, we are of the considered view, that the issue as to whether an Infrastructure Development company which had constructed a road on build, operate and transfer (BOT) basis on the land owned by the Central Government would be P a g e |9 C.O. No.84/Mum/2018 A.Y. 2011-12 (Arising out of ITA No.7114/Mu/2016) Asstt. Commissioner of Income Tax, Circle 6(2)(2) Vs. M/s EsselSagarDamoh Toll Roads ltd.

Court of Bombay in the case of CIT-10, Vs. M/s West Gujarat Expressway Ltd. (ITA No. 2357 of 2013, dated 05.04.2016), it was the claim of the revenue that the issue was covered against the assessee. We find, that the Tribunal rejected the aforesaid claim of the revenue, for the reason, that the issue s regards the entitlement of an Infrastructure Development company which had constructed a road on build, operate and transfer (BOT) basis on the land owned by the Central Government, towards claim depreciation under Sec. 32(1)(ii) in respect of its intangible rights i.e "right to collect toll", had not been adjudicated by the Hon‟ble High Court in its aforesaid order. In fact, it was observed by the Tribunal, that the Hon‟ble High Court in the aforesaid case had adjudicated, that an Infrastructure Development company which had constructed a road on build, operate and transfer (BOT) basis on the land owned by the Central Government, would not be entitled to claim depreciation on such "toll road". The observations of the Tribunal, are as under: