MAHAKALESHWAR TOLLWAYS PRIVATE LIMITED,UJJAIN vs. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -1, NASHIK

These assessee’s twin appeals for A.Y. 2012 -13 & 2013-14 are directed against the CIT(A)-, Pune’s order’s dated 28/01/2020 CIT(A),Pune-12/10260- 10261/2016-17 involving proceeding u/s. 143(3) of the Income Tax Act, 1961; in short "the Act”.

We note with the able assistance coming from the Revenue side that the assessee’s identical sole substantive grievance challenges correctness of the CIT(A)’s action rejecting its depreciation claim(s) of Rs.183,678,752/- & Rs.12,64,68,843/- ; assessment year wise, respectively, followed by non- condonation of delay for 420 days each therein.

It emerges first of all that the CIT(A)’s identical detailed discussion in para 3.1 to 3.4 has considered the assessee’s condonation averments of communication gap at various levels. Suffice to say, hon’ble apex court’s land mark decision in the Collector Land Acquisition V/s. v/s Mst. Katiji & Others (1987) 167 ITR 471 (SC) holds that all technical aspects must make way for the cause of substantial justice. We conclude in light thereof the impugned delay of 420 days each in filing of assessee’s lower appeals before the CIT(A) was neither intentional nor deliberate on account of circumstances beyond its control. The CIT(A)’s action refusing the condon the same stands reversed accordingly.

Next comes assessee’s identical grievance on merits that both the lower authorities have erred in law and on facts in not treating its right to collect toll as an intangible asset entitled for depreciation in light of section 32(1)(ii) of the Act. The Assessing Officer appears to have place reliance on the CBDT Circular No. 2014 dated 23.04.2014 that cost of construction of development of infrastructure facilities / roads/ highways under BOT projects is to be amortized and claimed as the eligible business expenditure. Needless to say, the CIT(A) has nowhere adjudicated the issue on merits.

We have given our thoughtful consideration to the assessee’s forgoing depreciation claim disallowance on merits and find no substance in Revenue’s stand. This tribunals Special Bench’s decision in ACIT V/s Progressive Constructions Ltd. (2018) 161 DTR 289 (HYD)(SB) has already decided the issue in the taxpayer’s favour and against the department. Mr. Desai vehemently quoted (2014) 51 taxmann.com 214(Bom.) North Karnataka Expressway Pvt. Ltd. V/s CIT that hon’ble jurisdictional high court has already decided the issue in Revenue’s favour. He fails to rebut the clinching fact their lordships had not considered the assessee’s “right” to collect toll as an intangible asset u/s.32(i)(ii) of the Income Tax Act but decided it qua ownership claim of the project land. The Revenue’s instant arguments are rejected therefore.

Delay of 133 days in filing institued on 10.08.2020 on account of covid-19 pandemic outbreak is condoned.

These assessee’s appeals are allowed in above terms. A copy of this common order be placed in the respective case files.