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TMI Blog2019 (12) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed and accordingly, the ground no. 2 raised by the assessee is allowed. Deduction on account of advance lease rent paid for the land taken on long term lease for business purposes on pro rata basis - HELD THAT:- In assessee s own case [ 2018 (9) TMI 142 - ITAT DELHI] dispute is set aside to the file of the AO with the direction to assessee to furnish all requisite details in respect of the claim of depreciation. The AO shall then verify the details to determine whether the claim of the assessee is allowable or not as per law. - I.T.A. No.748/DEL/2017, ITA NO. 2332/DEL/2017 - - - Dated:- 16-12-2019 - Shri H.S. Sidhu, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For the Assessee : M s . Nidhi Srivastava, CIT(DR) For the Revenue : Sh. S. Krishnan, Adv. ORDER PER H.S. SIDHU : JM The Assessee has filed the Appeal and Revenue has filed the Cross Appeal, as aforesaid, against the impugned Order of the Ld. CIT(A)-2, New Delhi relevant to assessment year 2012-13. Since the issues are inter-connected in these cross appeals, hence, the same were heard together and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of brevity. 5. At the time of hearing, Ld. Counsel for the assessee stated that the issues involved in both the appeals i.e. in Assessee s Appeal as well as Revenue s Appeal are squarely covered by the decisions of the Hon ble Supreme Court; Hon ble High Court as well as Hon ble Tribunal and decided in favour of the assesee and against the Revenue. To support his contention, he filed a copy of Synopsis, Chart listing grounds and precedents and supplied the copy thereof before the Bench as well as to the Ld. CIT(DR). Ld. CIT(DR) did not controvert the same. However, Ld. CIT(DR) on the issues raised in assessee s appeal has relied upon the order of the Ld. CIT(A) and on the issues raised in revenue s appeal has relied upon the order of the AO. 6. We have heard both the parties and perused the relevant records available with us, especially the impugned order as well as the copy of Synopsis, Chart listing grounds and precedents. 6.1 As regards ground no. 1 raised in assessee s appeal is concerned, we note that this issue is squarely covered by the decision of the Hon ble Supreme Court of India in the case of CIT vs. Container Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sways, bridges, airports, ports and rail system or any other public facility of similar nature as notified. 12. The relevant portion of Section 80lA (as it stood then) reads as under: Section 80-IA( 4A):This section applies to:--any enterprise carrying on the business of developing, maintaining and operating any infrastructure facility which fulfills the following conditions, viz., Section 80-IA(5) clause(ia): in the case of enterprise referred to in subsection (4A) hundred percent of profits and gains derived from such business for the initial five assessment years and thereafter thirty per cent of such profits and gains. 13. The term infrastructure facility had also been defined which at the relevant time stood as follows:- Section80-IA(l2)(ca): Infrastructure facility means:-a road, highway, bridge, airport, port or rail system or any other public facility of similar nature as may be notified by the Board in this behalf in Official Gazette; The said provision gives the power to the Board to notify certain other enterprises which can avail the benefit of Section 80-IA of the IT Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rward by learned senior counsel for the appellant does not have much force as the said amendment is silent with regard to any effect it would have upon the Notifications issued earlier by the Board in due exercise of its power. Had it been the intention of the legislature that the Notifications issued by the Board earlier are of no effect after 2002-03, it would have had found a place in the said amendment. In the absence of the same, we are unable to concur with learned senior counsel that the Notifications which were issued in legitimate exercise of the power conferred on the Board would cease to have effect after the Assessment Year 2002-03. 19. Learned senior counsel for the appellant contended that the High Court committed a grave error in holding ICDs as Inland Ports. It was further contended that the ICDs are never understood to fall in the category of 'Inland Port' under the scheme of the IT Act. The argument in support of this contention is that if the word 'Inland Port', as used in the Explanation attached to Section 80-IA( 4) of the IT Act defining 'infrastructure facility' includes ICDs, there would have been no need for the CB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inland Port' has been defined nowhere. But the Notification that has been issued by the Central Board of Excise Customs (CBEC) dated 24.04.2007 in terms holds that considering the nature of work carried out at these ICDs they can be termed as Inland Ports. Further, the communication dated 25.05.2009 issued on behalf of the Ministry of Commerce and Industry confirming that the ICDs are Inland Ports, fortifies the claim of the respondent herein. Though both the Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within the meaning of Section 80-IA of the IT Act, the appellant herein is unable to put forward any reasonable explanation as to why these notifications and communication should not be relied to hold ICDs as Inland Ports. Unless shown otherwise, it cannot be held that the term 'Inland Ports' is used differently under Section 80-IA of the IT Act. All these facts taken together clear the position beyond any doubt that the ICDs are Inland Ports and subject to the provisions of the Section and deduction can be claimed for the income earned out of these Depots. However, the actual computation is to be made in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for 20 years towards license for running container trains on Indian Railways facilities in terms of policy statement dated 09.01.2006. According to that policy it was permitted to move various operators container trains on Indian Railways. The registration fee of applicants who are not eligible would be refundable without interest. No such refund has been received by the assessee and therefore, it is apparent that appellant has been granted that new license. According to that license,it is flexible permission to run trains between any pairs of trains to any points in the entire country and there will be no limit on number of trains on any of the routes. The above permission was valid for a period of 20 years and further extendable by 10 years. Such permission is transferable from one operator to another operator subject to rules and conditions. On reading of the above policy documents it is apparent that assessee has acquired a commercial right to operate trains on the Indian Railway Track for 20 years by payment of ₹ 50 crores and which is transferable. The Hon'ble Delhi High Court in case of Areva T D India Ltd Vs. DCIT 345 ITR 421 has held that intangible assets incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng disallowance of depreciation on the amount described as goodwill. It was thus argued on behalf of the assessee-company that section 32(1)(ii) would mean rights similar in nature as the specified assets, viz., intangible, valuable and capable of being transferred and that such assets were eligible for depreciation. On behalf of the respondent it was argued that applying the doctrine of noscitur sociis the expression any other business or commercial rights of similar nature used in Explanation 3(b) to section 32(1) has to take colour from the preceding words know-how, patents, copyrights, trade marks, licences, franchises . It was urged that the Supreme Court had clearly held in Techno Shares and Stocks Ltd. [2010] 327 ITR 323 (SC) that Our judgment should not be understood to mean that every business or commercial right would constitute a licence or a franchise in terms of section 32(1)(ii) of the 1961Act . 13. In the present case, applying the principle of ejusdem generis, which provides that where there are general words following particular and specific words, the meaning of the latter words shall be confined to things of the same kind, as specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hno Shares and Stocks Ltd. [2010] 327 ITR 323 (SC) wherein it was held that intangible assets owned by the assessee and used for the business purpose which enables the access the market and has an economic and money value is a licence or akin to a licence which is one of the items falling in section 32(1)(ii) of the Act. 14. In view of the above discussion, we are of the view that the specified intangible assets acquired under slump sale agreement were in the nature of business or commercial rights of similar nature specified in section 32(1)(ii) of the Act and were accordingly eligible for depreciation under that section. 15. As Assessee has earned a benefit of enduring nature of plying on Indian Railway tracks for a period of 20 years, we do not have any hesitation to hold that it is a capital asset in the form of right to operate. It is a valuable commercial right available to the assessee for a considerable long period therefore, following the decision of the Hon'ble Delhi High Court we are of the view that the assessee has acquired a commercial right‟ which is eligible for depreciation u/s 32(1)(ii) of the Income Tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of disallowance of deduction on account of lease rent paid in advance against the land taken on long-term lease for business purposes on pro rata basis. 12.1.Ld.Counsel submitted that this issue is also covered by order of this Tribunal in assessee s own case for Assessment Year 2008-09 and 2009-10 wherein following view has been taken: 52.We have carefully considered the rival contentions and also noted the para extracted by Ld CIT(A) in para No. 7.1 of his order of AY 2004-05. The ld Assessing Officer has followed the decision of Hon ble Bombay High Court in case CIT Vs. Indian Oil Corporation wherein premium paid on leasehold land is disallowed and also it was held that such premium said cannot be included in the cost of the building constructed thereon. The Ld.CIT(A) followed his own decision for AY 2004-05 which was in respect of amortization of leasehold land and it is not the issue of deprecation on leasehold land. The decision of Hon ble Delhi High Court relied upon by the Ld AR also do not apply to the facts of the ease because that decision also do not apply to the leasehold land. We are conscious about the difference between amor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Pr. CIT vs. Container Corporation vide SLP (Civil) Diary No. 13966/2018 which arises out of impugned final judgment and order dated 31.01.2017 passed in ITA No. 917/2017 passed by the Hon ble High Court of Delhi, wherein the Hon ble Supreme Court of India has dismissed the Special Leave Petition filed by the Department. The relevant portion of the Hon ble Delhi High Court decision are reproduced hereunder:- 3. The second question urged is with respect to depreciation of claim in respect of assets not registered in the name of the assessee. Here the ITAT factually found that the assessee had paid all amounts to the transferor and had obtained possession. The assessee was also using the premises for its business purposes. The determination of this question is, therefore, essentially factual. No question of law arises. 4. The third question relates to the exemption under Section 80IA. The exemption claimed for the Inland Container Depot (ICD), Container Freight Stations (CFS) and rolling stock. Here again the Revenue s contentions were rejected for previous years in Container Corporation of India Ltd. v. ACIT, 346 ITR 140. So far as the ro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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