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TMI Blog2018 (9) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... d cost is to be amortized equally over the remaining period. There is nothing in the Circular to suggest and the same shall be applicable on retrospective basis. In view thereof, the action of the AO in applying the Circular retrospectively is not in order. The disallowance of ₹ 23, 85, 71, 095/- made by the AO on account of difference between the depreciation claimed at ₹ 42. 48. 04. 025/- and depreciation allowed on the basis of amortization for the remaining part of the concessionaire agreement i. e. from 01. 04. 2011 to 24. 03. 2034 at ₹ 18, 62, 32, 930/- is directed to be deleted. These grounds of appeal are ruled in favour of the appellant. - ITA No. 2689/Del/2016 - - - Dated:- 4-9-2018 - Shri Bhavnesh Saini, Judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. The assessee company has been set up to develop, establish, construct, operate and maintain a project relating to construction operation and maintenance of Paradip Port connectivity project under the Build Operate Transfer (BOT) basis. For this purpose a concession agreement was entered into between the assessee company and National Highways Authority of India (NHAI) on 24. 02. 2004. By this agreement, NHAI conferred the right to the assessee company to implement the project and levy toll/user charges over the long concession period after completion of construction. The project was completed on 15. 06. 2009. The toll collection started w. e. f. 04. 07. 2009. Subsequently, the assessee company entered into another agreement with M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astructure facility of roads highways under BOT projects in earlier year, the total deduction so claimed for the Assessment Years prior to the Assessment Year under consideration maybe deducted from the initial cost of infrastructure facility of roads /highways and the cost so reduced' shall be amortized equally over the remaining period of toll concessionaire agreement. Accordingly, the AO disallowed the depreciation claimed of ₹ 23, 85, 71, 095/-. Aggrieved by the order of the AO, the assessee appealed before the ld. CIT(A) and made written submissions also and relied on some case laws. The ld. CIT(A), after considering the submissions of the assessee allowed the appeal of the assessee. Aggrieved from the order of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the remaining period of toll concessionaire agreement. 3. The case laws relied upon by the assessee and CIT(A) are not applicable to facts of the case Reliance is placed on the following decisions : (i). Madras Industrial Investment Corpn. Ltd. vs. CIT, 91 Taxman 340 (SC). (ii). Moradabad Toll Road Co. Ltd. vs. ACIT, 52 taxmann. com 21 (Delhi) (iii). Indore Municipal Corpn vs. CIT, 124 Taxman 128 (SC) 4. On the other hand, the ld. AR relied on the order of the ld. CIT(A) and she also reiterated the submissions made before the ld. CIT(A). She has also relied on the decision of Hon ble Supreme Court in the case of CIT vs. M/s. Gemni Distilleries others and submitted that the case laws relied by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed by the appellant on 28. 09. 2012 when the subject Circular was not available. The Ld. AR has stated that following the Circular, the appellant company has amortized WDV on 01. 04. 2014 over the remaining life of asset. A close reading of the Circular also shows that deduction claimed out of initial cost of development of infrastructure, facility of roads/highway under BOT projects in earlier year may be deducted from the initial cost of infrastructure facility of roads/highway and the cost so reduced shall be amortized equally over the remaining period of the toll concessionaire agreement. This effectively means that the reduced cost is to be amortized equally over the remaining period. There is nothing in the Circular to suggest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctions dated 9. 2. 2011. Learned counsel for the respondents relied upon circular dated 10thDecember, 2015 and specifically relied upon paragraph 10. We are of the considered opinion that the central board of direct taxes cannot issue any circular having retrospective operation. Respectfully following the above decision, we allow the instant Appeals. The impugned order passed by the High Court dated 2. 11. 2011 in ITA No. 887/2006 is set aside. The matter(s) is/are remitted back to the High Court for re-adjudication on merits and in accordance with law. The Civil Appeals are allowed in the above terms. From the above order, it is clear that the circular issued by the CBDT cannot be applied retrospectively. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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