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TMI Blog2019 (2) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... ali Swaroop, CIT DR ORDER PER SUCHITRA KAMBLE, JM These two appeals are filed by the assessee and the Revenue against the order dated 6/10/2015 passed by the CIT(A)-5, New Delhi for Assessment Year 2011-12. 2. The grounds of appeal are as under:- I.T.A. No. 6771/DEL/2015 (Assessee s appeal) 1. That on facts and circumstances of the case the Ld.CIT(A) erred in upholding the act of A.O of denying the appellant carry forward of unabsorbed depreciation of ₹ 6,96,52,145/- for Assessment Year 2009-10 ₹ 14,34,52,539/- for Assessment Year 2010-11 aggregating to ₹ 21,31,04,684/-. 2. That on facts and circumstances of the case the Ld.CIT(A) erred in upholding A.O s act of taxing income of ₹ 8,20,74,197/- despite the fact that this amount was also taxed in Assessment Year 2012-13. I.T.A. No. 6860/DEL/2015 (Revenue s appeal) 1. That the order of the learned CIT(Appeals)is erroneous contrary to facts law. 2. That On the facts and in the circumstances of the case and in law, the learned CIT (A] has erred in allowing the claim of depreciation during the year even when in the balance sheet, it is showing all the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Company and has been promoted by Rail Vikas Nigam Ltd, a 100% Subsidiary of Ministry Railways (MOR), Govt, of Andhra Pradesh, Krishnapatnam Port Ltd. National Mineral Development Corporation Ltd. The concession to built, run and maintain the railway line was granted to assessee by MOR vide concession agreement dated 23/11/2007. One of the terms of the concession agreement was that the Operation Maintenance (O M) of the proposed line was to be handed over to South Central Railway (SCR) on the terms as may be decided in accordance with Railway Rules. Kindly see clause (p) of sub article 4.3 under the heading Obligations of KRCL of Concession Agreement. As per Constitution of India only Central Government can run Railways in India as per entry 22 of List I, of the Constitution of India. The assessee company got the Railway line constructed and handed over the same to South Central Railway (SCR) for Operation Maintenance (O M) of the aforesaid railway line. This Railway line came into operation in November 2008. The same was pointed out by the Ld. AR at note no 2A of Schedule 7 being Notes to Accounts as given in B/sheet. Sharing of revenues between the assessee company, SCR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e passing the assessment order for the impugned year AO treated Net receipts of ₹ 8,20,74,197/- earned from running of Railway line during the year as income of the assessee company but at the same time did not allow depreciation of ₹ 15,16,86,505/- computed on assets owned used in earning the income, for the year. The Assessing Officer also denied the assessee company the claim of unabsorbed depreciation for AY 09-10 AY10- 11 Depreciation of ₹ 15,16,86,505/- for the impugned year was computed on WDV of assets as reduced by depreciation claimed for AY 09-10 AY 10-11. 6. The Ld. AR in respect of Department s Appeal submitted that the Assessing Officer was informed about entire revenue expenditure pertaining to 2008 to 2011 which was disclosed in the accounts for the year ending 31/3/2012 and offer to tax in that year and there has been no loss of Revenue. This aspect was taken note by the Assessing Officer in his order. Thus, the Assessing Officer on the basis of South Central Railway Letter taxed income of ₹ 8,20,74,197/- pertaining to the Assessment Year 2011-12 under the head business. Thus, the Ld. AR submitted that when Assessing Officer is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Madeva Upendra Sinai Vs. UOI 98 ITR 209 Supreme Court as well as CIT(A) Vs. Doom Doma India Ltd 310 ITR 392. As regards assessee s appeal is concerned. The Ld. AR submitted that the assessee relied upon the order of the CIT(A). 7. The Ld. DR submitted that the order of the CIT(A) as well as the Assessing Officer. 8. We have heard both the parties and perused the material available on record. The CIT(A) held as under: 5.1.2. I have given careful consideration to the submissions of the appellant. The operation income of the appellant is earned from revenue generated from freight transportation. Revenue has been generated only when the assets in the form of station building, permanent way, plant and machinery and other assets have been put to use. Therefore, even though in the original return as well as revised return, the appellant has shown the entire fixed assets as capital work in progress, the depreciation thereon is still allowable under the provisions of Explanation 5 to section 32 wherein the legislature clarified by Finance Act, 2001 w.e.f. 01.04.2002, as a matter of abundant precaution, that depreciation is allowable, irrespective of the fact as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation for those years. This position arises because of definition of WDV given in section 43(6) as reproduced above in the appellant s written submissions. No depreciation has been allowed to the appellant for AYs 2009-10 2010-11, therefore that amount cannot be reduced while computing WDV for the year. The appellant s case is also supported by the Supreme Court decision in the case of Madeva Uppendra Sinai v UOI 98 ITR 209, 233 (SC) as relied by appellant. 6.2.4. In conclusion while ground 2(i) and (iii) are allowed, ground 2(ii) is dismissed. In other words, the AO would allow depreciation on the WDV for A.Y. 2011-12 without reducing any depreciation for earlier years. Cumulatively, therefore, ground no 2 is treated as partly allowed. 8.1.2. Therefore, so far as the charge to tax of the income for the year is concerned the AO s action is confirmed. Since I have allowed depreciation to the appellant for the year under challenge, all the other limbs of the grounds stands answered. As far the question of taxing income of ₹ 8,20,74,197/- in AY 2011-12 2012-13 twice is concerned, I agree with the appellant that it amounts to double taxation which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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