2011 (2) TMI 1438 - AT - Income Tax

Summary

Issues involved: Whether the assessee is the owner of the road bridge constructed for National Highways Authority of India, eligibility for depreciation on the road bridge, classification of the road bridge as 'building' or 'plant', and treatment of a sum as revenue expenditure.

Ownership of Road Bridge:
The appeal by the Revenue for the assessment year 2007-08 was directed against the order of the Commissioner of Income-tax(Appeals) regarding the ownership of the road bridge constructed by the assessee for National Highways Authority of India. The issue was whether the assessee is entitled to depreciation on the road bridge. The Tribunal found that the issue was covered in favor of the assessee based on previous decisions. The Tribunal held that the assessee is indeed the owner of the road bridge and is entitled to depreciation on it. The order of the CIT(A) was confirmed, and the grounds of appeal of the Revenue were rejected.

Eligibility for Depreciation:
The key issue was whether the assessee is eligible for depreciation on the road bridge constructed by treating it as the owner. The Departmental Representative relied on the Assessing Officer's order, while the counsel for the assessee argued that the issue was already decided in favor of the assessee in a previous case. The Tribunal agreed with the assessee, stating that the issue was identical to a previous assessment year. The Tribunal decided in favor of the assessee, confirming that depreciation on the road bridge is allowable.

Classification of Road Bridge:
Another issue was whether the road bridge can be considered as 'building' or 'plant' for the purpose of allowing depreciation. The Tribunal referred to previous decisions and found that the assessee is entitled to depreciation on the road bridge constructed for the National Highways Authority of India. The Tribunal confirmed the order of the CIT(A) and rejected the grounds of appeal of the Revenue.

Treatment of Expenditure:
The final issue was whether the assessee is eligible to treat a sum as revenue expenditure in the absence of treating the road bridge as stock-in-trade. The Tribunal's decision in favor of the assessee on the ownership and depreciation of the road bridge implied that the sum in question could be treated as revenue expenditure. The appeal of the Revenue was dismissed, and the order was pronounced in court on 11.2.2011.