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TMI Blog2012 (7) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... essary deduction of TDS was made at the time of payment of fee to the auditors only in next F.Y. - Held that:- neither the expenditure pertained to the A.Y. under consideration nor any liability for the same was incurred during the F.Y. relevant to the A.Y. under consideration - disallowance confirmed - appeal filed by the assessee is dismissed. - I.T.A. No. 1426/Del/2011 - - - Dated:- 15-6-2012 - A. D. Jain And Shamim Yahya, JJ. Assessee by :. S. C. Gupta, CA Department by : Raj Tondon, Sr. D.R. ORDER Per Shamim Yahya: AM This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-VIII, New Delhi dated 28.1.2011 pertaining to assessment year 2007-08. 2. The groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities either because proper and sufficient opportunity was not provided or because it was not solicited or its need was not appreciated. 3. Apropos issue of depreciation:- Assessee company is 100% subsidiary of NHAI and formed with the sole objective of constructing the highway and bypass at Moradabad and the assessee company executed the project on Build- Operate-Transfer (BOT) basis. Assessing Officer noted that since earlier years, the assessee company had been claiming the depreciation on roads @ 25%, whereas in all the assessment as well as in the appeal orders, the same was held to be @ 10%. Assessing Officer further found that assessee had calculated the amount depreciation on the original cost in case of all the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted the orders of the authorities below. He placed reliance upon the following case laws:- - Tamilnadu Road Development Co. Ltd. vs. ACIT (2009) 120 ITD 20 (Chennai). - C.I.T. vs. Gwalior Rayon Silk Mfg. Co. Ltd. (1992) 196 ITR 149 (SC). - C.I.T. vs. Mahindra Sintered Products (1993) 201 ITR 605 (Bom). - C.I.T. vs. Gujrat State Fertilizers Co. Ltd. (1993) 203 ITR 526 (Guj.) 6.3 We have carefully considered the submissions and perused the records. The question before us is whether road are to be granted depreciation at the rate of plant or building. While the assessee is seeking depreciation as applicable to plants, revenue authorities have allowed depreication as applicable to buiding. We discuss below the case laws cited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to carry on the business activity of the assessee and would be building within the meaning of section 32 of the Act, 1961. The depreciation is admissible on the capital expenditure incurred thereon as building. 6.7 In the case of Maharasthra State Road Development Corpn. Ltd. vs. ACIT, the tribunal had held that if the functional test for a plant enunciated by the Apex Court and jurisdictional Court in their decisions referred to supra is applied to the facts of the present case, we have no hesitation in holding that roads, flyovers, bridges etc., constructed and owned by the assessee and utilized in its business of providing infrastructure is the tool of its trade and an essential adjunct to its business and not merely a setting in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and accordingly the depreciation is to be allowed. We further note that after the assessment year 1988-89, all the appendices prescribing the table or rates of depreciation had the note that building would include road. 6.12 In the background of the aforesaid discussion and precedents we do not find any infirmity in the order of the Ld. C.I.T.(A). Accordingly, we uphold the same. 7. Apropos issue of audit fee On this issue the AO noted that a sum of ₹ 86224/- was debited for audit fee on which TDS was not deducted. Hence the claim was disallowed u/s. 40(a). 8. Before the Ld. CIT(A) assessee submitted that the payment of audit fee of ₹ 86224/- was neither accounted for nor actually made during the year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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