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2016 (4) TMI 1220 - HC - Income TaxDepreciation on assets not owned by the respondent - Whether the Tribunal was right in its decision of treating toll roads as plant and machinery when this is not as per rule 5 of New Appendix I of the Income-tax Rules? - Held that - Following the case of CIT v. West Gujarat Expressway Ltd. 2016 (4) TMI 1184 - BOMBAY HIGH COURT wherein held merely because the road is laid out does not mean that the Assessee is the owner thereof. He has laid it out for the purpose of the union and for its ultimate vesting in the public we answer substantial questions of law in the negative i.e. in favour of the appellant-Revenue and against the respondent-assessee.
Issues:
1. Depreciation on assets not owned by the respondent 2. Treatment of toll roads as plant and machinery Analysis: 1. The High Court considered the appeal in conjunction with a previous case related to the assessment years 2007-08 and 2008-09. The central issue was whether the Tribunal was correct in directing the Assessing Officer to grant depreciation on assets not owned by the respondent, which seemed to contravene Section 32 of the Income-tax Act. The Revenue contended that the Tribunal's decision was erroneous. The Court, in a separate order for the previous case, had already ruled in favor of the Revenue. Consequently, in this appeal, the Court upheld the previous decision and answered the question in the negative, favoring the appellant-Revenue and against the respondent-assessee. 2. The second issue revolved around the classification of toll roads as plant and machinery, which was challenged by the Revenue. The Tribunal's decision to treat toll roads as such was questioned based on the rules specified in the Income-tax Rules. The Court, following its previous ruling in a similar case, answered this question in the negative as well, favoring the appellant-Revenue and ruling against the respondent-assessee. The judgment concluded by disposing of the appeal in line with the decisions on the substantial questions of law raised in the case, with no specific order regarding costs.
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