BSC C&C KURALI TOLL ROAD LTD.,NEW DELHI vs. DCIT, NEW DELHI

ITA 1593/DEL/2017Status: DisposedITAT Delhi18 May 2021AY 2013-1424 pages
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What did the Tribunal hold?

The Tribunal held that the right to collect toll fees is an intangible commercial right eligible for depreciation at 25% under Section 32(1)(ii) of the Income Tax Act. The provision for major maintenance expenses was also allowed as it was in accordance with settled principles of law.

What were the facts?

The assessee company claimed depreciation at 25% on a toll road developed on a BOOT basis, treating it as an intangible asset. The Assessing Officer restricted depreciation to 10%, considering the road as a building or plant. The assessee also claimed a deduction for provision made for major maintenance expenses.

What were the issues?

Whether the right to collect toll is an intangible asset eligible for depreciation at 25%, and whether a provision for major maintenance expenses is allowable.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii)

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Income Tax Appellate Tribunal, DELHI “A” BENCH: NEW DELHI

Before: SHRI G.S. PANNU & SHRI KUL BHARAT

Hearing: 30.03.2021Pronounced: 18.05.2021

PER KUL BHARAT, JM :

Both appeals filed by the assessee for the assessment years 2012-

13 & 2013-14 are directed against the order of learned CIT(A)-35, New

Delhi both dated 02.02.2017. 2. Both appeals were taken up together and being disposed of by way

of a consolidated order. First we take up ITA No.1592/Del/2017

relating to Assessment Year 2012-13 wherein the assessee has raised

following grounds of appeal:-

1.

“That on the facts and circumstances of the case and in law, the Learned CIT (Appeals) has erred while confirming the reduction of depreciation on Toll Road developed by the appellant company from 25% to 10% and confirming addition of Rs.70,58,54,074/- (

The order continues below.

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