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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 ..... sessee while some of the other by the Income Tax Department. The details of these Appeals are as under:- Sl. No. T.C.A.No. Appellant A.Y Respondent A 868/2009 L & T Infrastructure Development Projects Ltd # 2001-02 The Asst.Commissioner of Income Tax Department, Chennai 34 B 869/2009 L & T Infrastructure Development Projects Ltd # 2002-03 -do- C 870/2009 L & T Infrastructure Development Projects Ltd # 2003-04 -do- D 756/2010 The Asst. Commissioner of Income Tax Department, Chennai 34 2004-05 LTIDPL INDVIT SERVICES Ltd. E 1201/2010 The Asst. Commissioner of Income Tax Department, Chennai 34 2005-06 LTIDPL INDVIT SERVICES Ltd. F 339/2013 The Asst. Commissioner of Income Tax Department, Chennai 34 2003-04 LTIDPL INDVIT SERVICES Ltd. G 253/2013 LTIDPL INDVIT SERVICES Ltd. 2003-04 The Asst. Commissioner of Income Tax Department, Chennai 34 H 206/2014 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 LTIDP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use or function if separated from road. It is a matter of fact that the bridge has a more durable life than the plant and machinery and depreciation represents the wear and tear in the asset by its use in the business for earning income and corresponds diminution in the capital applied for the said asset. When the life of a bridge is more than a plant or machinery and rather equal or more than a building then the bridge cannot be treated as a plant for the purpose of depreciation. Accordingly following the order of this Tribunal, we decide this issue against the assessee and in favour of the Revenue. The order of the Commissioner (A) is set aside and that 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961. The Commissioner of Income Tax vide Order dated 24.03.2009 revised the assessment order dated 27.11.2006 passed under Section 143(3) of the Income Tax Act, 1961. 15. Earlier, the Commissioner of Income Tax invoked Section 263 of the Income Tax Act, 1961 and issued a notice dated 21.01.2009 to revise the Assessment Order under Section 263 of the Income Tax Act, 1961. The assessee replied to the same on 20.02.2009. Thereafter, the Commissioner of Income Tax passed dated order dated 24.03.2009 with the following observations:- "3. The assessee perhaps could amortize this investment and write it off 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' w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is allowed." 20. By the impugned order dated 18.06.2010 in ITA.No.456/Mds/2010, the Income Tax Appellate Tribunal has allowed the appeal filed by the assessee. 21. The assessee filed its return for the Assessment Year 2005- 2006 on 30.10.2005. The return was processed under Section 143(1) of the Income Tax Act, 1961.A notice under Section 143(2) of the Income Tax Act, 1961 was issued to the assessee on 12.03.2007. The authorized representative of the assessee appeared from time to time and furnished the various details called for. An assessment order came to be passed 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 Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uildings. It is the case of the Revenue that the assessee is not entitled for any amount of depreciation, as the assessee is not the owner of the asset built in by it. But, as already pointed out by the Commissioner of Income-Tax(Appeals), the Tribunal has held in similar cases that the assessee is entitled for depreciation at the rate of 10%. This ground of the Revenue, therefore fails. 27. The assessee had filed a return of income for the Assessment Year 2003-2004 on 28.11.2003. An assessment order was passed on 15.02.2006 under Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets? H & I : - T.C.A.Nos.206 & 358 of 2014:- ( Assessment year 2002- 2003) L TIDPL INDVIT SERVICES Ltd. vs. The Asst. Commissioner of Income Tax Department, Chennai 34 and (The Asst. Commissioner of Income Tax Department, Chennai 34 vs. L TIDPL INDVIT SERVICES Ltd. ) 32. T.C.A.No.206 of 2014 has been filed by the assessee. T.C.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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent? i) Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee was entitled to depreciation at the rate of 15% on the project cost viz., bridges and roads treating the asset as plant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of construction, operation and maintenance of the respective toll bridges and roads under Build Operate & Transfer (BOT) Scheme. 43. Concessionaire Agreements were entered into between the respective 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 the Government of India and Government of Gujaratwere for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the respective assessees had rightly claimed depreciation at 25% in terms of Rule 5 of the Income Tax Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 99. It is submitted that if in three cases cited above, it has been accepted that under similar circumstances, the depreciation for building is available, then th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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). xxiv.Income Tax Officer Vs. LakhmaniMewal Das, [1976] 103 ITR 437 (SC). xxv. Principal Commissioner of Income Tax-6, Chennai Vs. Santech Solutions (P.) Ltd., [2018] 409 ITR 301 (Madras). 68. A reference was also made to the decision of the Hon'ble Supreme Court in Mysore Minerals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 the assessee was held to be a "plant". 71. A further reference was made to the decision of the Hon'ble Supreme Court in Dr.B.Venkata Rao case referred to supra, wherein, even a "nursing home building" equipped with facility to sterilize surgical instruments and bandages and also with operation theater, was held to be a "plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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] 52 taxmann.com 21 (Delhi). iv.Commissioner of Income Tax, Corporate Circle 3, Chennai - 34 Vs. M/s.Tamil Nadu Road Development Company Ltd., [2021] 130 taxmann.com 63 (Madras). v.Commissioner of Income Tax Vs. Bangalore Turf Club Ltd., [1983] 15 Taxman 221 (Kar.). vi.Commissioner of Income Tax Vs. Periyar Chemicals Ltd., [1987] 33 Taxman 331 (Ker.). vii.Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. 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 assessee as may be prescribed; (ii) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed: Provided that no deduction shall be allowed under this clause in respect of- a. any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28th day of February, 1975 but before the 1st day of April, 2001, unless it is used- (i) in a business of running it on hire for tourist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urniture, 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 the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, or the demerged company and the resulting company, as the case may be, in the ratio of the number of days for which the assets were used by them. Explanation 1.-Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 the written down value thereof: Provided that such deficiency is actually written off in the books of the assessee. Explanation.-For the purposes of this clause,- (1) "moneys payable" in respect of any building, machinery, plant or furniture includes- a.any insurance, salvage or compensation moneys payable in respect thereof; b.where the building, machinery, plant or furniture is sold, the price for which it is sold, so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority 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 wholly or partly, for purposes of allowability of depreciation under section 32(1)(ii) of the Act. Thus, present provisions of the Act do not allow claim of depreciation on Toll ways due to non-fulfilment of ownership criteria is such cases." 88. In paragraph No.6 of the same Circular No.9/2014 [F.No.225/182/2013/ITA.II] dated 23.04.2014, it has been further clarified as follows:- "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 concessionair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion "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 mainly for residential purposes and not covered by sub-items (1) above and (3) below (3) Buildings acquired on or after the 1st day of September, 2002 for installing machinery and plant forming part of water supply project or water treatment system and which is put to use for the purpose of business of providing infrastructure facilities under clause (i) of sub-section (4) of section 80-IA (4) Purely temporary erections such as wooden structures 5 10 [40] [40] (1) Machinery and plant other than those covered by sub-items (2), (3) and (8) below : [(2)(i) Motor cars, other than those used in a business of running them on hire, acquired or put to use on or after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed 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) Water pollution control equipment, being - (a) Mechanical screen systems (b) Aerated detritus chambers (including air compressor) (c)Mechanically skimmed oil and grease removal systems (d) Chemical feed systems and flash mixing equipment (e)Mechanical flocculators and mechanical reactors (f)Diffused air/mechanically aerated activated sludge systems (g) Aerated lagoon systems (h) Biofilters (i) Methane-recovery anaerobic digester systems (j) Air floatation systems (k) Air/steam stripping systems (l) Urea Hydrolysis systems (m) Marine outfall systems (n) Centrifuge for dewatering sludge (o) Rotating biological contractor or bio-disc (p) Ion exchange resin column (q) Activated carbon column (x)(a) Solidwaste, control equipment being - caustic/lime/chrome/ mineral/cryolite recovery systems (b)Solid waste recycling and resource recovery systems (xi) Machinery and plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and condensers, etc., made of earthy, sandy or clayey material or any other similar material (vi)Flour mills - Rollers (vii) Iron and steel industry - Rolling mill rolls (viii) Sugar works - Rollers (ix) Energy saving devices, being- A. Specialised boilers and furnaces : (a) Ignifluid/fluidized bed boilers (b) Flameless furnaces and continuous pusher type furnaces (c) Fluidized bed type heat treatment furnaces (d) High efficiency boilers (thermal efficiency higher than 75 per cent in case of coal fired and 80 per cent in case of oil/gas fired boilers) B. Instrumentation and monitoring system for monitoring energy flows: (a) Automatic electrical load monitoring systems (b) Digital heat loss meters (c)Micro-processor based control systems (d)Infra-red thermography (e)Meters for measuring heat losses, furnace oil flow, steam flow, electric energy and power factor meters (f) Maximum demand indicator and clamp on power meters (g)Exhaust gases analyzer (h) Fuel oil pump test bench C. Waste heat recovery equipment: (a) Economisers and feed water heaters (b) Recuperators and air pre-heaters (c) Heat pumps (d)Thermal energy wheel for high and low temperature waste hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lauses (a) and (b)] (xiii) Renewable energy devices being - (a) Flat plate solar collectors (b) Concentrating and pipe type solar collectors (c) Solar cookers (d) Solar water heaters and systems (e) Air/gas/fluid heating systems (f) Solar crop driers and systems (g) Solar refrigeration, cold storages and air conditioning systems (h) Solar steels and desalination systems (i) Solar power generating systems (j) Solar pumps based on solar- thermal and solarphotovoltaic conversion (k) Solar- photovoltaic modules and panels for water pumping and other applications (l) Wind mills and any specially designed devices which run on wind mills [installed on or after the 1st day of April, 2014] (m) Any special devices including electric generators and pumps running on wind energy [installed on or after the 1st day of April, 2014] (n)Biogas-plant and biogas-engines (o)Electrically operated vehicles including battery powered or fuel-cell powered vehicles (p) Agricultural and municipal waste conversion devices producing energy (q) Equipment for utilising ocean waste and thermal energy (r) Machinery and plant used in the manufacture of any of the above subitems (9)(i) Books owned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in or in relation to which the renovation or improvement is effected. Where the structure is constructed or the work is done by way of extension of any such building, the percentage to be applied would be such percentage as would be appropriate, as if the structure or work constituted a separate building. 96. A reading of the above definition makes it clear that neither a "Toll Road" nor a "Toll Bridge" is neither a "Plant" or "Building". 97. As such the claim for depreciation either as a "Plant" or "Building" ought not to have been claimed by the respective assessees as "Toll Road" and "Toll Bridge" do not come within the definition of "Tangible Assets" in Explanation 3 to Section 32 of the Income Tax Act, 1961. Ownership is a sine quo non for availing depreciation under Section 31 of the Income Tax Act, 1961. In our view, to claim depreciation, the respective assessees ought to have been the owners of the respective toll roads/ toll bridges. 98. The Honourable Supreme Court in CIT v.Podar Cement Private Limited [1997] 226 ITR 625, nterpreted the meaning of the word "owned" in section 32(1) of the Income Tax Act, 1961. The Court held that anyone in possession of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from vehicles was merely a deferred consideration for putting up the Road and for maintaining them during the term under the respective concessionaire agreements. No separate consideration was paid to the respective assessees by the respective Governments. 106. The rights that were conferred under the respective concessionaire agreements signed between the respective government with the respective assessees was in lieu of the consideration for completing the aforesaid road infrastructure which would have otherwise not been made available to them. 107. It is a mechanism adopted to recuperate the expenses incurred by the respective assessees as contractee's under the respective concessionaire agreement with a scope for making reasonable profit over a period of such agreement for having put up the aforesaid road infrastructure and for maintaining them during such period. 108. Therefore, even otherwise respective assessees are not eligible to claim depreciation under the provisions of section 32 of the Income Tax Act, 1961 109. Further, depreciation is given for an asset owned by an assessee to reduce the tax liability considering the expenses incurred on "such asset" and its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the view of the Tribunal holding that the assessing officer there had allowed depreciation in a very mechanical manner to the assessee therein without examination of the issue. 116. The Bombay High Court also distinguished the views taken by the Allahabad High Court in CIT v. Noida Toll Bridge Company Limited [2013] 213 Taxman 333 by holding that the Allahabad High Court failed to take note of Section 5 of the National Highways Act, 1956, which reads as under:- 5. Responsibility for development and maintenance of national highways.- It shall be the responsibility of the Central Government to develop and maintain in proper repair all national highways;but the Central Government may, by notification in official Gazette, direct that any function in relation to the development or maintenance of any National Highway shall, subject to such conditions, if any, as may be specified in the notification, also be exercisable by the Government of the State within which the national highway is situated or by any officer or authority subordinate to the Central Government or to the State government." 117. The Court also took note of section 8-A of the National Highways Act, 1956, in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general words have been used following particular and specific words of the same nature on the established rule of construction that the Legislature presumed to use the general words in a restricted sense, that is to say, asbelonging to the same genus as the particular and specific words. Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it. But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general import, it becomes the duty of the Courts to give these words their plain and ordinary meaning. In our opinion, in the context of the object and the-mischief of the enactment there is no room for the application of the rule of ejusdem generis. Hence it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words "or otherwise"." 126. Therefore, it cannot be construed that the respective assessees had acquired "intangible assets" within the meaning of the definition in Explanation 3(b) to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versed by the Appellate Commissioner vide order dated 11.01.2008 was accepted. It was incumbent on the part of the Income Tax Department to have invoked Section 263 of the Income Tax Act 1961 against the common Assessment Orders dated 30.11.2005 for the Assessment years 2001-2002 to 2003-2004 in the case of the assessee viz., L&T Infrastructure Development Projects Ltd.*(Formerly Narmada Infrastructure Construction Enterprises Limited) the Appellants in TCA No. 868,869 and 870 of 2009. 134. Having failed to invoke power under Section 263 of the Income Tax Act 1961 and since the decision of the Assessing Officer was not challenged by the Income Tax Department, the benefit already conferred on the said Assessee cannot be disturbed notwithstanding the fact that substantial questions of law 1 and 2 have been answered against the appellant. Therefore, we do not wish to disturb the benefit that has been conferred on the appellant by the Assessing officer which has been affirmed by the Tribunal. 135. In the light of the above discussion, T.C.A.Nos.868 to 870 of 2009 and 206 of 2014 are liable to be dismissed by affirming the impugned order of the Tribunal dated 13.02.2009 in ITA.Nos.617 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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. 143. We are therefore of the view, the order passed by the Income Tax Appellate Tribunal vide orders dated 17.12.2009 and 18.06.2010 in ITA.No.857 /Mds/2009 and ITA.No.456/Mds/2010 which has been impugned in T.C.A.Nos.756 and 1201 of 2010 are to be interfered in the light of our answers given to the substantial question Nos.1 and 2. Therefore, the T.C.A.No.756 of 2010 deserves to be allowed. 144. Therefore, T.C.A.No.206 of 2014 which arises out of order passed by the Income Tax Appellate Tribunal in respect of the Assessment Year 2002-2003 is liable to be dismissed. Consequently, T.C.A.No.358 of 2014 filed by the Revenue deserves to be allowed. 145. Since the impugned orders in all the four appeals i.e. T.C.A.Nos.206 and 358 of 2014 for the Assessment Year 2002-2003 and T.C.A.Nos.253 and 339 of 2013 for the Assessment Year 2003-2004 are to be answered against the assessee and are liable to be dismissed. 146. In the light of the above discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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