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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 ..... rence between the depreciation claimed at Rs. 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. 20M at Rs. 18, 62, 32, 930/-. " 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in ignoring the Board's Circular No 9/2014 dated 23. 04. 2014 wherein it has clarified disputes arisen by referring the case law of Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. vs CIT in 225 ITR 802 wherein it has allowed spreading over of liability over a number of years on the ground that there was containing benefit to the company over a period. 2. The brief facts of the case are tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of Rs. 37. 35 crores and depreciation ofRs. 21. 73 crores including depreciation towards toll road which alone was Rs. 21. 47 crores. In the computation of income, total depreciation was claimed of Rs. 42, 49, 01, 720/- which contained Rs. 4, 24, 84, 205 being the depreciation in respect of toll road. Regarding charging of depreciation on toll road, the assessee submitted the details. The AO followed the circular No. 09/2014 dated 23. 04. 2014 of CBDT, wherein the Board observed as under : "6. The amortization allowable may be computed at the rate which ensures that the whole of the cost incurred in creation of infrastructural facility of road/highway is amortized evenly over the period of concessionaire agreement after excluding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of allowing depreciation u/s 32(1) of IT Act. 2. Reliance is placed upon Circular No. 09/2014 dated 23. 04. 2014 in which CBDT clarified as under: "6. The amortization allowable may be computed at the rate which ensures that the whole of the cost incurred in creation of infrastructural facility of road/highway is amortized evenly over the period of concessionaire agreement after excluding the time taken for creation of such facility. 7. In the case where an assessee has claimed any deduction out oj initial cost of development of infrastructure 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 may be deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional High Court in the case of Moradabad Toll Company Ltd. vs. ACIT has held that depreciation is allowable on toll road/bridges under Build-Operate-Transfer (BOT) arrangement @10%. The Hon'ble High Court of Allahabad in the case of Noida Toll Bridge Co. Ltd. had also held that depreciation is allowable on road constructed by respondent assessee under the concession agreement at the same rate i. e. 10%. In any case, the eligibility of the appellant company for claim of depreciation is not disputed by the AO. He has allowed the same on the basis of amortization over the balance period of the concessional agreement relying on Board's Circular referred above. The critical question, therefore, is whether the Board's Circular which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the above order that the assessee has rightly claimed depreciation and considered the circulars as quoted above which are applicable from their date. The ld. AR has relied on the judgment of Hon'ble Supreme Court (supra), wherein it has been held as under : "Leave granted. The question raised in this batch of Appeals is as to whether the instructions/circular issued by the Central Board of Direct Taxes on 9. 2. 2011 will have retrospective operation or not. This Court in Commissioner of Income Tax-VIII, New Delhi v. Suman Dhamija (Civil Appeal Nos. 4919-4920/2015) has held that instructions/circular dated 9. 2. 11 is not retrospective in nature and they shall not govern cases which have been filed before 2011, and that, the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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