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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI S.S.GODARA, JM & SHRI DR. DIPAK P. RIPOTE, AM
आदेश / ORDER PER S. S. GODARA, JM :
This Revenue’s appeal for A.Y. 2010-11 arises against the CIT(A), Pune’s order dated 26/02/2020 passed in ITBA/APL/S/250/2019- 20/1025796090(1) involving proceeding u/s. 143(3) r.w.s.147 of the Income Tax Act, 1961; in short "the Act”. Heard both the parties. Case file perused.
2 ITA No.431/PUN/2020 A.Y. : 2010-11 M/s. Jaora Nayagaon Toll Road Co. Pvt.Ltd.,
The Revenue pleads the following substantive grounds in the instant appeal.
“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO whereby the notional loss was reduced by Rs.41,36,07,374/-.
On the facts and circumstances of the case and in law, the Ld. CIT(A) fails to appreciate that Department has filed appeal to Hon’ble High Court against the decision of Tribunal in setting aside the order u/s 143(3) r.w.s. 153C of the Income Tax Act, 1961.
On the facts and circumstances of the case and in law, the ld. CIT(A) at best should have kept the appeal in abeyance, till the decision of appeal by Hon’ble High Court.”
It emerges at the outset in light of the Revenue’s above extracted second substantive ground that it has already lost on the sole issue of depreciation claimed by the taxpayer regarding its “right to collect toll” u/s.32(1)(ii) in the nature of an intangible asset. Learned co-ordinate bench’s order in ITA Nos. 379 and 380/Pune/2011 for A.Y. 2010-11 & 2011- 12 dated 29.11.2017 to this effect forms part of records before us.
Learned DR vehemently argued that hon’ble jurisdictional high court’s landmark decision in North Karanataka Toll Expresways V/s. CIT (2014) 51 taxmann.com 214 (Bom.) has decided the very issue in department’s favour. Be that as it may, the fact remains that the tribunal’s first round order on
3 ITA No.431/PUN/2020 A.Y. : 2010-11 M/s. Jaora Nayagaon Toll Road Co. Pvt.Ltd.,
the very issue has gone in the taxpayer’s favour. We therefore affirm the CIT(A)’s detailed discussion in assessee’s favour reading as under :-
“3.2 I have considered the materials placed before me. Brief facts are that the appellant filed original return of income on 08.10.2010 showing current year loss of Rs. 47,40,41,494/-. Consequent to search action u/s 132A of the Act on Ashoka Group on 20.04.2010 and simultaneous survey action u/s 133A of the Act on the appellant, assessment u/s 143(3) rws 153C of the Act was completed on 28.03.2013 determining total loss of Rs. 6,04,34,120/- by making disallowance of depreciation on license to collect tolls. Aggrieved by the Assessment Order passed u/s 153C of the Act, appellant filed appeal, which was allowed by the then CIT(A) - 12, Pune vide Order passed on 01.12.2015. Department had not accepted the decision of the CIT(A) and filed appeal against the Order of the CIT(A) to the ITAT, Pune which was dismissed by the ITAT, B Bench, Pune, vide its Order dated 29.11.2017. Meanwhile another search action was conducted on Ashoka Group on 05.04.2016 wherein it was found that appellant has given subcontract to M/s PNC Infratech Ltd which were allegedly involved in transaction with various bogus/jama-kharchi companies for inflating/booking bogus expenses. The case of the appellant was reopened u/s 147 of the Act to verify these aspects. The appellant in response to notice issued u/s 148 requested the AO the accept the return filed u/s 153C of the Act wherein the appellant declared loss of Rs. 47,40,41,494/-.
3.3 The AO in the order passed u/s 147 of the Act accepted the income returned by the appellant but determined the total loss as per order passed u/s 153C of the Act of Rs. 6,04,34,120/-. The appellant contended that by disallowing loss, the AO had made the same addition which was done in the order passed u/s 153C of the Act and the same
4 ITA No.431/PUN/2020 A.Y. : 2010-11 M/s. Jaora Nayagaon Toll Road Co. Pvt.Ltd.,
has already been deleted by the then CIT(A) and the order of the CIT(A) was also upheld by the ITAT Pune. The appellant claimed that no addition was made on the reasons for which the case was reopened u/s 147 of the Act and AO was incorrect to make same addition once again which was already decided in its favour by the appellate authorities. I find merit in the contentions raised by the appellant. No reason was assigned by the AO for not accepting the income returned. The AO has wrongly started computation of income of the assessee from the total income/loss, as per earlier order dated 28.03.2013 u/s 153C r.w.s. 143(3) of the Act while he should have taken income after considering the effect of appellate orders of the CIT(A) and the Hon’ble ITAT. In view of these facts, the Assessing Officer is directed to delete the disallowance made since the same was already decided by the then CIT(A)-12, Pune vide order dated 01.12.2015 and the order of the CIT(A)-12, Pune was upheld the ITAT, B Bench, Pune. Ground Nos. 3 & 4 raised by the appellant on this count are thus allowed.”
We further make it clear before parting that the assessee before hon’ble jurisdictional high court had sought for the impugned depreciation relief not u/s. 32(1)(ii) regarding its “right to collect toll” as an intangible asset u/s. 32(1)(ii) but in the capacity of “ owner” of the road project. The same stands distinguished therefore. We rather quote ACIT V/s. Progressive Construction Ltd. (2018) 191 TTJ 549 (Hyd.) (SB) deciding the very issue of depreciation on right to collect toll u/s.32(1)(ii) in assessee’s favour to uphold the CIT(A)’s findings under challenge.
5 ITA No.431/PUN/2020 A.Y. : 2010-11 M/s. Jaora Nayagaon Toll Road Co. Pvt.Ltd.,
This Revenue’s appeal is dismissed in above terms.
Order pronounced in the Open Court on this 29th day of August, 2022.
Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 29th August, 2022. Ashwini
आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : अपऩलधथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The CIT(A), Pune. 4. The Pr.CIT, Nagpur 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. गधर्ा फ़धइल / Guard File. 6. आदेशधनपसधर / BY ORDER, // True Copy //
Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune.
6 ITA No.431/PUN/2020 A.Y. : 2010-11 M/s. Jaora Nayagaon Toll Road Co. Pvt.Ltd.,
S.No. Details Date Initials 1 Draft dictated on 21.06.2022 2 Draft placed before author 23.08.2022 Draft proposed & placed before the Second 3 Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order