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TMI Blog2023 (2) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer having taken one of the plausible view, such view cannot be disturbed under Section 263 of the Income Tax Act, 1961 and therefore set aside the order of the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961. The Commissioner instead of giving final finding remitted back to the Assessing Officer to pass a fresh order. The issue was left open to be decided by the Assessing Officer vide order of the Commissioner while exercising power under Section 263 of the Income Tax Act 1961. It was open order of remand. Admittedly the Commissioner has refrained from passing any order on merits. Tribunal has erred in concluding that the Assessing Officer has taken one of the plausible view before for the benefit of depreciation at 25% on Toll Road as Plant . In our view, such view was not plausible as Toll Roads under the concessionaire agreement neither conferred upon the said assessee any Tangible Assets nor Intangible Assets in the light of answers given to the substantial question Nos.1 and 2 above. Decided in favor of Revenue. - T.C.A.Nos.868 to 870 of 2009 And T.C.A.Nos.756 & 1201 of 2010 And T.C.A.Nos.339 & 253 of 2013 And T.C.A.No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LTIDPL INDVIT SERVICES Ltd . 2002-03 The Asst. Commissioner of Income Tax Department, Chennai 34 I 358/2014 The Asst. Commissioner of Income Tax Department, Chennai 34 2002-03 LTIDPL INDVIT SERVICES Ltd . J 841/2014 The Asst. Commissioner of Income Tax Department, Chennai 34 2004-05 LTIDPL INDVIT SERVICES Ltd . i) L T Infrastructure Development Projects Ltd . (Formally M/s.Narmada Infrastructure Construction Enterprises Limited)#. ii)LTIDPL INDVIT SERVICES Ltd .(Formally M/s. L T Western India Toll bridge Ltd.) A Memo dated 21.4.2021 has been filed to that effect *. 3. We shall brief give the details of the respective cases before we proceed to answer the substantial question of law involved in the appeal. A , B C :- T.C.A.Nos.868, 869 870 of 2009:- ( Assessment Years 2 001-2002, 2002-2003 2003-2004) ( L T Infrastructure Development Projects Ltd vs. Asst.Commissioner of Income Tax ) 4. T.C.A.Nos.868, 869 870 of 2009 have been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer is restored. 7. In the result, the appeals of the Revenue are allowed . 10. Against the impugned common order dated 13.02.2009 passed by the Income Tax Appellate Tribunal, T.C.A.Nos.868, 869 870 of 2009 have been filed by the assessee. When these appeals were admitted following substantial questions of law were framed for being answered:-. i. Whether on the facts and the circumstances of the case, the Tribunal was right in law in not classifying the bridge as a Plant for the purpose of claim of depreciation under the Act? ii. Without prejudice to the above, whether after insertion of section 2(11)(b) read with section 32(1)(ii), the concessionaire right of the Appellant to construct a bridge over Narmada river can be considered as an intangible asset being a license or a business or commercial right similar thereto and thereby would the Appellant be eligible to claim depreciation on the same at the rate as applicable for intangible assets ? D:- T.C.A.No.756 of 2010 ( Assessment Year 2004-05) The Asst. Commissioner of Income Tax Department, Chennai 34 vs. L TIDPL INDVIT SERVICES Ltd . 11. T.C.A.No.756 of 2010 has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff over the period of lease as done in the books following consistent view for both book and income tax purpose. This could be better alternative to the claim of the depreciation on this investment which is not eligible for depreciation under the existing provisions of the Act. Without prejudice to the above stand that the assessee not being the owner of the bridge, is entitled to only amortise the cost of project and write it off over the period of lease, I would confine my finding to the rate of depreciation claimed by the assessee as applicable to 'plant' which in my view is erroneous and prejudicial to the interest of the Revenue . The assessing office has not examined in the course ofassessment, the assessee's claim of depreciation. Therefore instead of giving a final decision on this subject i consider it fit to set aside the assessment to enable the Assessing Officer to consider the issue afresh. The Assessing Officer is directed to issue a fresh assessment order in this case after giving a finding on assessee's claim of depreciation. 16. Aggrieved by the same, the assessee had preferred an appeal before the Income Tax Appellate Tribunal in I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 08.10.2007 under Section 143(3) of the Income Tax Act, 1961. 22. Thereafter, a notice under Section 263 of the Income Tax Act, 1961 was issued for revision of the assessment completed on 08.10.2007. By an order dated 27.01.2010 bearing reference C.No.218(19)/ CIT-I /263 /2009-10, the Commissioner of Income Tax, Chennai-I has set aside the assessment order dated 08.10.2007 and remitted the case back to the assessing officer to pass a speaking order considering the agreement entered into by the assessee. 23. Aggrieved by the same, the assessee has filed an appeal before the Income Tax Appellate Tribunal in ITA.No.456/Mds/2010 24. Thus, the Income Tax Department has filed the present T.C.A.No.1201 of 2010. This appeal was admitted and the following substantial questions of law were framed for being answered:- Whether on the facts and in the circumstances of the case, the Tribunal was right in setting aside the revision order passed by the Commissioner under Section 263 of the Act on the ground that CIT lacked jurisdiction since the assessment order was neither erroneous nor prejudicial to the interests of the revenue? F G :- T.C.A.Nos.339 253 of 2013-( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(3)(i) of the Income Tax Act, 1961. Thereafter, Section 148 of the Income Tax Act, 1961 was invoked. Pursuant to the above, a revised assessment order dated 31.12.2010 came to be passed by the Deputy Commissioner of Income Tax under Section 143(3) read with Section 147 of the Income Tax Act, 1961. 28. Aggrieved by the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) IV in ITA.No.401/11-12/A-IV. By an order dated 16.09.2011, the Commissioner of Income Tax (Appeals) IV has partly allowed the appeal filed by the assessee with the following directions:- 5.2. So, the Assessing Officer is directed to allow the depreciation @ 10% on Road for the following reasons: a) In the case of L T Transportation Infrastructure Ltd., the assessee company was claiming depreciation @ 10% on Road , but not @ 25% (in similar circumstances). b) In view of the above cited Honourable ITAT decisions of Chennai, the appellant claims that they are entitled to benefit under Section 80 IA. The Assessing Officer is directed to verify whether Appellant Company satisfies the conditions and take action accordingly. 6. The appeal is partly allowed. 29. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .A.No.358 of 2014 has been filed by the Income Tax Department. Both appeals have been filed against the impugned common order dated 20.08.2013 in I.T.A.No.1118/Mds/2012 and in I.T.A.No.1325/Mds/2012. Operative portion of the impugned order in ITA.No.1118/Mds/2012reads as under:- 14. On the other hand, the Id.DR has supported the order passed by the Assessing Officer. 15. We have heard both sides, perused the materials on record and also gone through the orders of authorities below as well as Tribunal order. We find that the issue involved is squarely covered by the decision of the Tribunal in assessee's own case. The Id.Counsel for the assessee, while relying on various case law on different structures, submitted that the assessee has already carried the matter in appeal before the Hon'ble Jurisdictional High Court and the same is admitted. However, no orders of any higher court have been placed on record to take a different view. In view of the above, we respectfully following the decision of the Tribunal in assessee's own case dismiss the grounds raised by both assessee and Revenue . 33. The assessee filed its return for the Assessment Year 2002- 2003 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and machinery? ii) Is not the finding of the Tribunal wrong by holding that depreciation was allowable on bridges and roads especially when the asset was not acquired by the assessee nor was it owned by the assessee? J : - T.C.A.No.841 of 2014:-( Assessment Year 2004-2005) T he Asst. Commissioner of Income Tax Department, Chennai 34 vs. L TIDPL INDVIT SERVICES Ltd . ) 38. T.C.A.No.841 of 2014 has been filed by the Income Tax Department against the order dated 12.12.2011 of the Income Tax Appellate Tribunal in I.T.A.No.679/Mds/2010.Operative portion of the impugned order reads as under:- 2........ After going through this order, we are satisfied that the order which resulted in passing the assessment order from which this appeal is stemmed-up will have no legs to stand as the consequential assessment made has become non-existent. Accordingly, this appeal of the Revenue stands dismissed as having become infructuous. 3. As a result, the cross objection which has been filed in respect of the appeal filed by the Revenue will also not survive. But, it was yelled by the Id.AR that merits of the grounds taken in the cross objection should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective assessee with the Government of India and Government of Gujarat asdetailed under:- Sl.No. Name of the Assessee Date of the Concession Agreement Period Name of the Bridge 1 i) L T Infrastructure Development Projects Ltd . (Formally M/s.Narmada Infrastructure Construction Enterprises Limited)#. 21.11.1997 15 Years (including the construction period of 3 years) A toll bridge across the Narmada river (in Gujarat) on National Highway 8. 2 LTIDPL INDVIT SERVICES Ltd. # (Formerly, L T Western India Toll Bridge Ltd.) Appellants/Respondents in rest of the appeals as in Table I. ) 01.03.1999 10 Years 8 Months (including the construction period of 2 Years) Two lane toll bridge across river Watrak near Kheda Village on the Ahmedabad- Vadodara section of the National Highway 8 44. The above Concessionaire Agreements under the Build-Operate- Transfer (BOT) Scheme were between the respective assessees and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to claim deprecation at all as roads and bridges are neither plant nor buildings. 54. The case of the respective assessees before the Income Tax Appellate Tribunal was that they were entitled for depreciation under plant and machinery at 25%. 55. The Tribunal has taken similar views in the case of the respective assessees. In the case of L T Infrastructure Development Projects Ltd. *(Formerly Narmada Infrastructure Construction Enterprises Limited) Appellants in TCA Nos. 868, 869 and 870 of 2009), it has held that the assessee was entitled for 10% depreciation. 56. In the case of LTIDPL INDVIT SERVICES L #(Formerly, L T Western India Toll Bridge Ltd.) rest of the appeals also as in Table I , the Tribunal has held that the assessee was entitled for 10% depreciation on roads as buildings under Section 32 of the Act. However, the department is seen taking a contra view in these appeals to deny depreciation to the above assessee. 57. The learned counsel for the assessee in the respective appeals would submit that the roads and bridges constructed by the assessee for the Government of Gujarat and the Government of India are to be treated as plant and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that this Court has very often referred to accounting practice for ascertainment of profit made by a company or value of the assets of a company. But when the question is whether a receipt of money is taxable or not or whether certain deductions from that receipt are permissible in law or not, the question has to be decided according to the principles of law and not in accordance with accountancy practice. Accounting practice cannot override Section 56 or any other provision of the Act. As was pointed out by Lord Russell in the case of B.S.C. Footwear Ltd. [(1972) 83 ITR 269 : (1971) 2 All ER 534, HL] , the Income Tax law does not march step by step in the footprints of the accountancy profession. 64. It is further submitted that the Department has taken a view under similar circumstances that the assessee was eligible for depreciation on building and therefore, in these appeals, it is not open for the Department to contend that the depreciation is not available. 65. In this connection, a reference was also made to the decision of the Hon'ble Supreme Court in Berger Paints India Limited Vs. Commissioner of Income Tax, Calcutta , (2004) 12 SCC 42 : [2004] 266 ITR 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax Vs. Shivalik Hatcheries (P.) Ltd. , [2010] 329 ITR 432 (Himachal Pradesh) : [2010] 186 Taxman 79 (Himachal Pradesh) xvi. Maharashtra State Road Development Corporation Ltd. Vs. Assistant Commissioner of Income Tax, Circle 5(2), Mumbai , [2010] 126 ITD 279 (Mumbai) : [2010] 128 TTJ 32 (Mumbai). xvii. Commissioner of Income Tax Vs. Podar Cement Pvt. Ltd. and others , (1997) 5 SCC 482. xviii. Cognizant Technology Solutions India Private Limited Vs. The Assistant Commissioner of Income Tax and another , dated 05.10.2021 in W.A.No.2521 of 2021. xix. Ashoka Info (P.) Ltd. Vs. Assistant Commissioner of Income Tax , [2010] 35 SOT 50 (Pune) (URO). xx. TANMAC India Vs. Deputy Commissioner of Income Tax, Circle 1, Pondicherry , [2017] 78 taxmann.com 155 (Madras). xxi. Commissioner of Income Tax-V Vs. Orient Craft Ltd. , [2013] 354 ITR 536 (Delhi) : [2013] 29 taxmann.com 392 (Delhi). xxii. Asian Paints Ltd. Vs. Deputy Commissioner of Income Tax , [2009] 308 ITR 195 : [2009] 223 CTR 141 (Bombay). xxiii. Income Tax Officer, Ward No.16(2) Vs. TechSpan India (P.) Ltd. , [2018] 92 taxmann.com 361 (SC) : [2018] 255 Taxman 152 (SC). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been executed and registered as contemplated by the Transfer of Property Act, the Registration Act etc. Building owned by the assessee - the expression as occurring in Section 32(1) of the Income Tax Act means the person who having acquired possession over the building in his own right uses the same for the purposes of the business or profession though a legal title has not been conveyed to him consistently with the requirements of laws such as the Transfer of Property Act and the Registration Act etc. but nevertheless is entitled to hold the property to the exclusion of all others. 69 .As far as the invocation of Section 263 of the Income Tax Act, 1961, it was submitted that the road and toll bridge constructed by the assessee are private earning apparatus and therefore, the assessee is entitled for depreciation at 25%. 70. In this connection, once again, a reference was made to the decision of the Bombay High Court in North Karnataka Expressway Ltd. case referred to supra and the decision of the Andhra Pradesh High Court in Warner Hindustan Ltd. case referred to supra , wherein, a well dug for purpose of carrying on business of manufacturing pharmaceuticals by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were awarded under the BOT Scheme to the respective assessees, were not the assets of the respective assesseee s to claim depreciation and therefore question of claiming depreciation at 25% either as plant or as 10% does not arise. 79.On behalf of the Income Tax Department, it is submitted that the cost of construction was borne by the Government and remuneration for the work was in the form of collection of toll for the period of 106 months under the agreement. 80. It is the case of the Income Tax Department that the roads and bridges are not been fixed assets of the respective assessees and therefore they are neither the buildings nor the plant or machinery and therefore question of claiming depreciation either as plant or machinery at 25% or as buildings at 10% does not arise. 81. The learned counsel for the Income Tax Department has relied on the following decisions:- i. North Karnataka Expressway Ltd. Vs. Commissioner of Income Tax , [2015] 372 ITR 145. ii. Commissioner of Income Tax-10 Vs. West Gujarat Expressway Ltd. , [2017] 82 taxmann.com 224 (Bombay). iii. Moradabad Toll Road Co.Ltd. Vs. Assistant Commissioner of Income Tax , [2014] 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave considered the arguments advanced by the learned counsel for the assessee and the learned counsel for the Income Tax Department. 85. As per Explanation 3 to Section 32 d the expression assets means- i) tangible assets , being buildings, machinery, plant or furniture; ii) intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature. 86. Section 32 of the Income Tax Act, 1961 as it stood during the relevant period read as under:- Depreciation. 32. (1) In respect of depreciation of- ( i ) buildings, machinery, plant or furniture, being tangible assets; ( ii )know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed- ( i ) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the assessment year commencing on the 1st day of April, 1991, the deduction in relation to any block of assets under this clause shall, in the case of a company, be restricted to seventy-five per cent of the amount calculated at the percentage, on the written down value of such assets, prescribed under this Act immediately before the commencement of the Taxation Laws (Amendment) Act, 1991: Provided also that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets or know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession referred to in clause ( xiii ), clause ( xiiib ) and clause ( xiv )] of section 47 or section 170 or to the amalgamating company and the amalgamated company in the case of amalgamation, or to the demerged company and the resulting company in the case of demerger, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery or plant shall be allowed as deduction under clause ( ii ): Provided that no deduction shall be allowed in respect of- A. any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or B. any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or C. any office appliances or road transport vehicles; or D. any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any one previous year; ( iii ) in the case of any building, machinery, plant or furniture in respect of which depreciation is claimed and allowed under clause ( i ) and which is sold, discarded, demolished or destroyed in the previous year (other than the previous year in which it is first brought into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years. 87. In the context of Build-Operate-Transfer ('BOT') arrangements in Paragraph No.3 of Circular No.9/2014 [F.No.225/182/2013/ITA.II] dated 23.04.2014, it has been clarified as follows:- 3. In BOT arrangements for development of roads/highways, as a matter of general practice, possession of land is handed over to the assessee by the Government / notified authority for the purposes of construction of the project without any actual transfer of ownership and such assessee has only a right to develop and maintain such asset. It also enjoys the benefits arising from use of asset through collection of Toll for a specified period without having actual ownership over such asset. Therefore, the rights in the land remain vested with the Government or its agencies. Thus, as assessee does not hold any rights in the project except recovery of toll fee to recoup the expenditure incurred, it cannot therefore be treated as an owner of the property, either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil-well or other sources of mineral deposits (including searching for discovery or testing of deposits for the winning of access thereto). 94. The above definition of Plant in section 43(3) of the Income Tax Act, 1961, makes it clear that neither the Toll Bridge constructed nor the Toll Road laid by the respective assessee are a plant for the purpose of Section 32 of the Income Tax Act, 1961. Thus, a claim for depreciation under Section 32 of the Income Tax Act, 1961 by the respective assessees are misplaced. 95. The expression building has not been defined in the Income Tax Act, 1961. Part A of Appendix 1 merely specifies types of buildings and Machinery Plant. They read as under:- Building Depreciation allowance as percentage of written down value Machinery and Plant Depreciation allowance as percentage of written down value 1) Buildings which are used mainly for residential purposes except hotels and boarding houses (2) Buildings other than those used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the 1st day of April, 2000 in replacement of condemned vehicle of over 15 years of age and is put to use before the 1st day of April, 2000 for the purposes of business or profession in accordance with the second proviso to clause (ii) of sub- section (1) of section 32 [See Note 6 below this Table] (vi)New commercial vehicle which is acquired on or after the 1st day of April, 2001 but before the 1st day of April, 2002 and is put to use before the 1st day of April, 2002 for the purposes of business or profession [See Note 6 below this Table] (via) New commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of [October], 2009 and is put to use before the 1st day of [October], 2009 for the purposes of business or profession [See paragraph 6 of the Notes below this Table] (vii) Moulds used in rubber and plastic goods factories (viii) Air pollution control equipment, being - (a)Electrostatic precipitation systems (b)Felt-filter systems (c) rust collector systems (d) Scrubber-counter current/venturi/packed bed/cyclonic scrubbers (e) Ash handling system and evacuation system (ix) W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single incision) (4) Containers made of glass or plastic used as re-fills (5) Computers including computer software (See Note 7 below this Table) (6) Machinery and plant, used in weaving, processing and garment sector of textile industry, which is purchased under TUFS on or after the 1st day of April, 2001 but before the 1st day of April, 2004 and is put to use before the 1st day of April, 2004 [See Note 8 below this Table] (7) Machinery and plant, acquired and installed on or after the 1st day of September, 2002 in a water supply project or a water treatment system and which is put to use for the purpose of business of providing infrastructure facility under clause (i) of subsection (4) of section 80- IA [See Notes 4 and 9 below this Table] (8) (i) Wooden parts used in artificial silk manufacturing machinery (ii)Cinematograph films - bulbs of studio lights (iii) Match factories - Wooden match frames (iv) Mines and quarries : (a) Tubs winding ropes, haulage ropes and sand stowing pipes (b) Safety lamps (v) Salt works Salt pans, reservoirs and condensers, etc., made of earthy, sandy or clayey material or any other s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectronic devices, computer hardware/software, router/bridges, other required equipment and associated communication systems for supervisory control and data acquisition systems, energy management systems and distribution management systems for power transmission systems (l) Special energy meters for Availability Based Tariff (ABT) F. Burners: (a) 0 to 10 per cent excess air burners (b) Emulsion burners (c) Burners using air with high pre-heat temperature (above 300 C) G. Other equipment : (a) Wet air oxidation equipment for recovery of chemicals and heat (b) Mechanical vapour re-compressors (c) Thin film evaporators (d) Automatic microprocessor based load demand controllers (e) Coal based producer gas plants (f) Fluid drives and fluid couplings (g) Turbo charges/supercharges (h) Sealed radiation sources for radiation processing plants (x) Gas cylinders including valves and regulators (xi) Glass manufacturing concerns - Direct fire glass melting furnaces 60 (xii) Mineral oil concerns: (a) Plant used in field operations (above ground) distribution - Returnable packages (b)Plant used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [40] [40] [30] 40 [40] [40] [40] [40] [40] [40] [40] [40] [40] [40] [40] [40] [40] [40] 15 [40] [40] [40] [40] [40] [20] 20 20 Notes: 1. Buildings include roads, bridges, culverts, wells and tubewells. 2. A building shall be deemed to be a building used mainly for resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transfer of Property Act and the Registration Act etc. However, it should be borne in mind that the said decision was rendered in the context of allotment of houses by the Housing Boards. There the intention was to convey the property at a later point of time, once all the payment dues are paid to the Housing Board. 100. There the possession was transferred in presenti while the transfer of ownership was deferred to a future date after full payment of the installment was made. The reasoning and the ratio adopted by the Hon ble Supreme Court in the context of housing sites and houses in CIT v.Podar Cement Private Limited [1997] 226 ITR 625 therefore cannot be imported to the facts of the present case. 101. Under the BOT arrangement/scheme, it can never be impugned and conceived that the respective assessee were the owners of the respective Toll Roads and Toll Bridges In fact, these infrastructures on the National Highway or State Highway or public road can never be treated as Assets of a private individual. 102. Public properties such as Toll Roads and Toll Bridges on the State/National Highways are never intended to be transferred at any point of time to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agreements were to be in force as per the relevant Accounting Standards. 111. The Delhi High Court in Moradabad Toll Road Co. Ltd.v. Assistant Commissiner of Income Tax , 2014 SCC OnLine Del 2286has concluded that Toll roads executed under Build, Operate and Transfer Basis (BOT) was a capital asset which when used by any person, who makes payment for the said use, generates and results in accrual of income and will be a part of the business of the assessee and not a implement or a tool used by an assessee for his business. However, it is hardly a criteria for granting depreciation. 112. Though the Delhi High Court noted several decisions of various Courts including that of the Allahabad High Court in CIT v. Noida Toll Bridge Company [2013] 213 Taxman 333 and that of the decision of the Hon'ble Supreme Court in CIT v. Anand Theatres [2000] 244 ITR192, it has come to an erroneous conclusion by conferring the benefit of depreciation on Toll Road as Building . We are however unable to persuade ourselves to accept the views taken by the Delhi High Court in the above case. 113. In our view, the Delhi High Court erred when it concluded that the Toll Road was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respective assessees in terms of Explanation 3(a) to Section 32 of the Income Tax Act, 1961. Accordingly, we answer the first part of the substantial question formulated by us in para 82 against the respective assessees. 120. We are of the view that the second part of the 1st substantial question of law as to whether the respective assessees have any Intangible Assets under the respective Concessionaire Agreements as per the definition in Explanation 3(b) to Section 32 of the Income Tax Act, 1961 also requires to be answered against the assessee. The definition of the above expression has already been extracted above. 121. The expression used in the last part of the definition of Intangible Asset is licenses, franchises or any other business or commercial rights of similar nature . 122. The meaning of the above expression licenses and the phrase any other business or commercial rights of similar nature has to be inferred from the meaning of the words along with which they have been used. Their meaning has to be inferred from the meaning of the expression know-how , patents , copy rights , trademark , franchises by applying the principle of noci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the revenue. 129. In view of the above answer, the 2nd substantial question of law is also to be answered against the assessees and in favor of the revenue. 130. In our view, impugned orders of the Income Tax Appellate Tribunal upholding claim of the assessee for depreciation at 10% on the Toll Bridges and Toll Roads to the respective assessees were erroneous. Such findings were unwarranted under the scheme of the Income Tax Act, 1961. 131. In our view, the case of L T Transportation Infrastructure Ltd. in ITA.No.1692 vide order dated 30.11.2010 and M/s.T.N.Road, Development Company in ITA.No.2082/Mds/2008 dated 24.10.2008 cannot be accepted by this Court. In the light of the above discussion, by answering to the substantial questions of law Nos.1 and 2 above. 132. This leaves us with the 3rd substantial question of law framed by us. The Assessing Officer while passing the assessment orders dated 30.11.2005 in I.T.A.Nos.617/Mds/2008, 618/Mds/2008 619/Mds/2008 for the Assessment Years 2001-02 to 2003-04 have conferred the benefit of depreciation on the Toll Bridge by treating as Buildings eligible for depreciation at the rate of 10% as ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 253/2013 2003-2004 4 339/2013 2003-2004 5 756/2010 2004-2005 6 841/2014 2004-2005 7 1201/2010 2005-2006 137. T.C.A.Nos.756 of 2010 for the Assessment Year, 2004-05 and T.C.A.No.1201 of 2010 for the Assessment year 2005-06, pertain to the order passed by the Tribunal setting aside the order passed by the Commissioner in the exercise of power conferred under Section 263 of the Income Tax Act, 1961. In the light of the decision of the Commissioner of Income Tax Department in Tamil Nadu Road Development Co., Ltd., vs. ACIT 120 ITD and in the case of L T Transportation and Infrastructure Co., Ltd. , and another decision of the Hon ble Supreme Court in the case of Commissioner of Income Tax vs. Anand Theatres, 244 ITR 192. 138. The Assessing Officer had accepted the contention of the assessee that the assessee was entitled to depreciation at 25% by treating the Toll Road as a Plant even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion:- i) T.C.A.Nos.868 to 870 of 2009 filed by the Assessee, viz., L T Infrastructure Development Projects Ltd. (Formerly Narmada Infrastructure Construction Enterprises Limited) against common impugned order passed by the Income Tax Appellate Tribunal dated 13.02.2009 in ITA.Nos.617 to 619/Mds/2008 ) for the Assessment Years 2001-02; 2002-03 2003-04 are hereby confirmed and accordingly these Income Tax Appeals of the assessee are dismissed. ii) T.C.A.Nos.253 of 2013 and 206 of 2014 filed by the Assessee, viz., LTIDPL INDVIT SERVICES Ltd .(Formally M/s. L T Western India Tollbridge Ltd.) against impugned orders passed by the Income Tax Appellate Tribunal dated 08.12.2011 and 20.08.2013 in ITA.Nos.1971/Mds/2009 and I.T.A.No.1118/Mds/2012 for the Assessment Years 2003-2004 and 2002-2003 are hereby confirmed and accordingly these Income Tax Appeals of the assessee are dismissed. iii) T.C.A.Nos.756 and 1201 of 2010 , 339 of 2013 , 358 and 841 of 2014 filed by the Revenue against impugned order passed by the Income Tax Appellate Tribunal dated 17.12.2009, 18.06.2010, 22.11.2012 , 20.08.2013 and 12.12.2011 in ITA.Nos.857/ Mds/2009, 456/Mds/2010, 2105/Mds/2011, 1325 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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