9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 73 - HC - Income TaxDepreciation on roads in the category of plant and machinery - whether roads developed and maintained by the assessee by agreement with the Government on the State/National Highway is eligible for depreciation as building ? - HELD THAT - As relying on M/S. TAMILNADU ROAD DEVELOPMENT COMPANY LTD., CHENNAI 2021 (2) TMI 548 - MADRAS HIGH COURT development done by the assessee by forming the road would qualify as a plant so as to be entitled to depreciation under Section 32 - substantial question of law as answered against the Revenue and in favour of the assessee and it is held that the assessee is entitled for depreciation at the rate of 10%.
Issues Involved:
1. Eligibility of roads for depreciation as "building" or "plant and machinery." 2. Interpretation of relevant legal provisions and precedents regarding depreciation on roads developed and maintained by the assessee. 3. Applicability of judicial decisions on similar cases to the present matter. Issue 1: Eligibility of roads for depreciation as "building" or "plant and machinery." The case involves a dispute over whether roads developed by the assessee are eligible for depreciation as a "building" or "plant and machinery." The Assessing Officer initially disallowed depreciation on roads, considering them neither as plant and machinery nor as a building. The Commissioner of Income Tax (Appeals) upheld this decision, stating that the roads were State Highways and not owned by the assessee. However, the Income Tax Appellate Tribunal allowed depreciation on roads as a building based on the rate of depreciation prescribed in the Appendix. The Revenue challenged this decision, arguing that roads constructed under agreements with the Government cannot be considered buildings for depreciation purposes. Issue 2: Interpretation of relevant legal provisions and precedents regarding depreciation on roads developed and maintained by the assessee. The Tribunal's decision was based on the assessee's claim that roads should be treated as plant and machinery for depreciation purposes. The Revenue cited the Bombay High Court's ruling in a similar case to argue against granting higher depreciation rates for roads developed under agreements with governmental authorities. The Rajasthan High Court's decision in another case supported the assessee's position, emphasizing that roads developed under agreements with rights to use and collect fees should qualify for depreciation. The Tribunal's decision was upheld based on these legal interpretations and precedents, rejecting the Revenue's appeal against granting depreciation at a rate of 10%. Issue 3: Applicability of judicial decisions on similar cases to the present matter. The Division Bench of the High Court had previously ruled on a similar question of law in another case involving the same assessee, where depreciation on roads was allowed. The present case raised the same question, and the Division Bench's decision was cited as a precedent. Following the Division Bench's ruling, the Court decided against the Revenue and in favor of the assessee, dismissing the Tax Case Appeals based on the established legal principles and interpretations regarding depreciation on roads developed and maintained by the assessee. This detailed analysis of the judgment highlights the key issues, legal interpretations, and precedents considered in the case, providing a comprehensive understanding of the dispute and its resolution.
|
