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2021 (6) TMI 55 - ITAT MUMBAIDepreciation on intangible asset being 'Right to collect toll" (HOT Assets) - assessee company had claimed depreciation on carriage ways @ 25% by treating the same as intangible assets - AO relying on the CBDT Circular No. 9/2014, dated 23.04.2014, was of the view that the cost of construction incurred by the assessee on infrastructure facility for development of roads/highways under the BOT project may be amortized evenly over the period of the concessionaire agreement after excluding the time taken for creation of such facility - HELD 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 eligible for claim of depreciation in respect of its intangible rights i.e “right to collect toll” under Sec. 32(1)(ii), is squarely covered by the aforesaid order of the ‘Special bench’ of the Tribunal in the case of ACIT, Circle 10(2), Hyderabad, Vs. Progressive Construction Ltd.[2017 (3) TMI 1167 - ITAT HYDERABAD] and also the orders of the coordinate benches of the Tribunal viz. (i) DCIT, Circle-9(1)(2),Mumbai Vs. M/s Atlanta Ltd. Mumbai [2018 (2) TMI 1514 - ITAT MUMBAI] and (ii) ACIT Vs. M/s PNG Tata Ltd. [2019 (8) TMI 347 - ITAT CHENNAI] We, thus, finding ourselves to be in agreement with the view taken by the Tribunal in the aforesaid cases, respectfully follow the same. Accordingly, the claim of the assessee towards depreciation under Sec.32(1)(ii) in respect of its intangible rights i.e “right to collect toll”, being in conformity with the mandate of law, is found to be in order. We thus not finding favour with the view taken by the CIT(A) therein set aside the same. The Ground of appeal No. 1 is allowed in terms of our aforesaid observations. Disallowance u/s 36(1)(iii) of interest - sufficient self-owned funds and internal accruals to give the advances - HELD THAT:- Admittedly, in case, if an assessee has sufficient interest free funds available with it which would suffice to meet its investments, then, no disallowance of any part of the interest expenditure pertaining to such investments would be called for in its hands. Our aforesaid view is fortified by the judgment of the Hon’ble Supreme Court in case of CIT Vs. Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT] As is discernible from the order of the CIT(A), we find that it was the inter alia claim of the assessee before him that as the advances in question were given out of its internal accruals and self-owned funds thus, no disallowance under Sec. 36(1)(iii) was liable to be made. However, as the claim of the assessee that it had sufficient self-owned funds and internal accruals to justify the advances given during the year in question is not clearly borne from the records, therefore, in our considered view the matter in all fairness requires to be revisited by the A.O. Accordingly, we herein restore the aforesaid issue to the file of the A.O with a direction to re-adjudicate the same in the backdrop of case of CIT Vs. Reliance Industries Ltd.. In case, the claim of the assessee that it had sufficient self-owned funds and internal accruals to meet out the advances in question is found in order, then, no disallowance of any part of the interest expenditure would be called for under Sec. 36(1)(iii) of the Act.Ground of appeal No. 2 is allowed for statistical purpose.
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