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TMI Blog2017 (1) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... sued much after the completion of assessment proceedings under section 143(3) of the Act. 3. That the Ld. PCIT erred in initiating revisionary proceedings under section 263 of the Act merely on the basis of CBDT Circular dated 23.4.2014, without appreciating that CBDT circular is not binding on the Appellant and only on the basis of subsequent CBDT circular, the completed assessment cannot be reopened under section 263 of the Act. 4. That the Ld. PCIT erred in not appreciating that the CBDT Circular, which was not applicable to the facts of the appellant's case and was also contrary to the law laid down in various decisions, could not be the basis to set-aside the assessment concluded vide order dated 31.12.2013 under section 143(3) of the Act. 5. That the Ld. PCIT erred in invoking revisionary proceedings under section 263 of the Act ignoring the law laid down by the Hon'ble High Court which is binding on lower authorities in respect of eligibility of the assessee to claim depreciation under section 32(1) of the Act on expenditure incurred towards acquired/developed under the Build-Op erate-Transfer Scheme ("BOT Scheme"). 6. That the Ld. PCIT erred in not appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enjoyed the benefits arising from the use of asset through collection of fares for a specified period without having actual ownership over such assets. Therefore, the rights in the land remained vested with the Government/its agency(DMRC). Thus, as the assessee did not hold any rights in the project except recovery of fares to recoup the expenditure incurred, it cannot be treated as owner of the property, either wholly or partially for purpose of allowability of depreciation under Section 32(l)(iii) of the Act. The provisions of the Act do not allow claim of depreciation on the assets due to non-fulfillment of ownership criteria in BOT cases. 4. As the assessee had incurred expenditure on a project for development of Metro railways it was entitled to recover cost incurred towards development of such facility (comprising of construction cost and other pre-operative expenses) during the construction period. Further, expenditure incurred by the assessee on such BOT projects had brought an enduring benefit in the form of right to collect the fares during the period of the agreement. The Supreme Court in the case of Madras Industrial Investment Corporation Ltd vs CIT 225 ITR 802, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 9/2014 which is dated 23.04.2014, being subsequent to the assessment order passed. He submitted that since the circular issued prejudices the interest of the assessee and mandates/instructs the Assessing Officer to make an assessment in a particular manner, the instruction is beyond the scope and ambit of the powers conferred on the board under section 119 of the Act Ld. Counsel for the assessee submitted that the case of assessee was where assessment was completed at the time of issuance of show cause notice under section 263, and unless two preconditions of the assessment order being "prejudicial" as well as "erroneous" to the interest of the revenue are satisfied, Ld. PR. CIT does not have the jurisdiction to initiate proceedings under section 263 of the Act. 7. On merits Ld. Counsel for assessee argued that assessee had entered into a Concession Agreement with DMRC under the terms of the agreement expressly mentioned therein, and had constructed Airport Metro Express project under BOT scheme (Build Operate and Transfer). He further submitted that 30 years concession was granted to the assessee under the agreement to the assessee. The assessee had claimed depreciation of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee relied upon the following decisions to substantiate his preposition: * Malabar industrial Co Ltd reported in 243 ITR 83 (SC) * CIT versus Max India Ltd reported in 295 ITR 282 (SC) * CIT versus Kelvinator of India Ltd reported in 332 ITR 231 (Del) 10. He submitted that the view taken by the assessing officer was substantiated by the legal precedents and thus, the original assessment was in conformity with law it and therefore cannot be held to be erroneous and prejudicial to the interest of the revenue. 11. On the contrary the Ld. DR submitted that the assessee had entered into an agreement with DMRC, under BOT scheme for purposes of construction of the project. She submitted that the scheme does not actually transfer the ownership and assessee has only the right to develop and maintain the asset. She submitted that the assessee enjoys the benefits arising from the use of asset through collection of tool for a specified period without having actual ownership over such asset and for the purposes of allowability of depreciation under section 32 (1) (ii) of the Act, the assessee cannot be treated as owner of the property either wholly or partially. 12. Ld. DR submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aused by upholding the order of Ld. PR. CIT, as it is open for assessee to make submissions before the assessing officer afresh and in the event the claim of the assessee is found to be correct, will be allowed. She submitted that at this juncture it would be incorrect to hold the order passed by Ld. PR. CIT as unjustified because the assessment order passed by the Ld. AO is without verification of various issues in accordance with law. She placed her reliance upon the following decision to substantiate this preposition: * Rampyari Devi Sarogi vs. CIT reported in (1968) 67 ITR 84 (SC) * Tara Devi Agrawal vs CIT reported in (1973) 88 ITR 323 (SC) * Gee Vee Enterprises vs. ACIT reported in (1975) 99 ITR 375 (Del); * DG Housing Projects Ltd reported in (2012) 343 ITR 329 (Del) * CIT versus Goetz India Ltd reported in 361 ITR 505 (Del) 15. She thus, submitted that it is necessary that the assessing officer examines the factual matrix in the light of the legal provisions. 16. We have perused the records placed before us in the light of the submissions advanced by both the sides and the judicial proceedings relied upon by them. 17. Ground no. 1 that arises for our considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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