9911796707
TMI Blog2020 (10) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... lso the order of the Tribunal in the case of Container Corporation of India (supra), we allow Ground of the assessee s and direct that benefit of depreciation on the registration fee of ₹ 50 Crores paid to Indian Railways be allowed the benefit of depreciation. Disallowance on account of claim against Contractors/Third Parties - CIT-A allowed relief to assessee - HELD THAT:- CIT (A) has noted that the assessee s submission is tenable in as much as it has not accounted for the claim against Contractors/Third Parties pending its realization due to inherent uncertainty in the ultimate realization of the said amount.CIT (A) has also noted that the assessee has been consistently following Accounting Standard-9 dealing with Revenue Recognition issued by the Institute of Chartered Accountant of India. In the proceedings before us, the Ld. SR. DR could not bring to our notice any perversity in the said order of the CIT (A). We also note that a similar issue had been decided in favour of the assessee by the CIT (A) in Assessment Years 2003-04 and 2004-05 which have been accepted by the Department. Therefore, in such a situation, following the principle of consistency, we find no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71,395/- after a making a disallowance of alleged excess claim of depreciation amounting to ₹ 1,25,28,875/- and another addition of ₹ 3,00,49,000/- being claims against contractors/third parties. 2.4 Aggrieved, the assessee filed an appeal before the Ld. CIT (A) challenging the reopening and also challenged the additions on merits. The Ld. CIT (A), however, upheld the reopening. With reference to the additions of ₹ 3,0049,000/- pertaining to claim against Contractors and other parties, the Ld. CIT (A) noted that an identical issue had been decided in favour of the assessee in Assessment Year 2003-04 by the then Ld. CIT (A). Following the same, the Ld. CIT (A) given relief to the assessee and directed the Assessing Officer (AO) to delete the addition. With respect to the second issue pertaining to alleged excess depreciation claim of ₹ 1,25,28,875/- on registration and license fees paid to Indian Railways for running containers trains, the Ld. CIT (A) held that since the license was not owned by the assessee, depreciation had been rightly disallowed. The Ld. CIT (A) also noted that the Assessing Officer had committed a mistake apparent from record due to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for depreciation being allowed on ₹ 50 Crores being license fee paid for 20 years. In this regard, it was submitted that the assessee company has capitalized the registration fee paid to the Ministry of Railways as it was an intangible asset and has claimed depreciation on it. It was submitted that this fee was paid for the Concession Agreement for operation of container trains on Indian Railways Network and the said license dated 04.01.2007 had been granted to the assessee company for the said purpose. It was submitted that this license/agreement was to operate for 20 years and, therefore, the assessee had rightly claimed depreciation on it by treating it as an intangible asset. It was further submitted that the Assessing Officer, however, was of the opinion that the impugned fee paid to the Ministry of Railways cannot be considered as an intangible asset and, therefore, he had disallowed the depreciation claimed while allowing amortization @ 1/20 thereby making a net addition of ₹ 1,25,28,875/-. It was submitted that that Ld. CIT (A) had not only upheld the action of the Assessing Officer but had also directed the Assessing Officer to enhance the assessee s income by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as settled in favour of the assessee corporation. It was submitted that the assessee has being consistently following the policy of accounting and offering for tax, the amount in the year it is realized and this practice has been accepted even by the C AG which carries out the audit of the assessee corporation. The Ld. Authorized Representative also submitted that even as per Accounting Standard-9 dealing with Revenue Recognition, which has been issued by the Institute of Chartered Accountants of India, income which has to be credited to the profit and loss account should comply with the accrual norms i.e., the amount should be capable of being quantified and there should be no uncertainty in realization of the same. The Ld. Authorized Representative also submitted that identical issue had been allowed by the Ld. CIT (A) in Assessment Years 2003-04 2004-05 against which the Department had not filed any appeal before the Tribunal. 6.0.1 On a query from the Bench, the Ld. SR. DR accepted that no appeals had been preferred by the Department on the issue in Assessment Year 2004-05 and that also no appeal was pending for Assessment Year 2003-04 before the Tribunal. 7.0 We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought to our notice that an identical issue had been decided by this Tribunal in the favour of the assessee in the case of Container Corporation of India Ltd. vs. DCIT (supra) vide order dated 19.01.2017. It is seen that in this case, the assessee had paid the registration fee of ₹ 50 Crores to Ministry of Railways for movement of Container Train on Indian Railways Network as non refundable registration fees. The assessee claimed depreciation @ 25%. However, the Assessing Officer disallowed the claim of depreciation and allowed 1/20th of the amount as a deduction. When the matter came up before the Tribunal, the Co-ordinate Bench, in the said order placed reliance on the judgment of the Hon ble Delhi High Court in the case of Areva T D India Ltd. vs. DCIT reported in 345 ITR 420 wherein it had been held that intangible assets include business claims, business information, business records and assets which are invaluable for carrying on the business of the assessee. It was further held by the Hon ble Delhi High Court that intangible assets were comparable to a license to carry on the existing business and that in absence of such intangible asset, it would be difficult for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
