BANGALORE INTERNATIONAL AIRPORT LTD vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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ITA/543/2022HC KarnatakaKAHC01051872202206 December 2022Bench: P.S.DINESH KUMAR,T.G. SHIVASHANKARE GOWDA4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, answering both questions of law in favor of the assessee. The court directed the assessee to demonstrate the actual expenditure for depreciation claims, but otherwise upheld the assessee's right to depreciation on leasehold rights.

What were the facts?

The assessee, Bangalore International Airport Ltd., challenged the ITAT's order upholding the disallowance of depreciation on leasehold rights. The disallowance was based on the grounds that the assessee had not acquired business and commercial rights and that leasehold rights are akin to land, thus not eligible for depreciation.

What were the issues?

Whether depreciation is allowable on leasehold rights and whether the assessee acquired the necessary business and commercial rights to claim depreciation.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

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ITA No. 543 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF DECEMBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE T G SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 543 OF 2022 BETWEEN: BANGALORE INTERNATIONAL AIRPORT LTD A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 ADMINISTRATION BLOCK BIAL, DEVANAHALLI BANGALORE-560 300 REPRESENTED BY ITS CHIEF FINANCIAL OFFICER BHASKAR ANAND RAO …APPELLANT (BY SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1)(2), (FORMERLY ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2 (1)(1), BANGALORE) BMTC BUILDING, 80 FEET ROAD KORAMANGALA BANGALORE-560 085 2. THE COMMISSIONER OF INCOME TAX -I BMTC BUILDING, 80 FEET ROAD KORAMANGALA BANGALORE-560 085 …RESPONDENTS (BY SHRI. M. DILIP, ADVOCATE)

Digitally signed by YASHODHA N Location: High Court Of Karnataka

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ITA No. 543 of 2022

THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 21.06.2022 PASSED IN ITA NO.567/BANG/2020, FOR THE ASSESSMENT YEAR 2012-2013 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU PRONOUNCED ON 21.06.2022 IN ITA NO.567/BANG/2020 (ANNEXURE-C) ASSESSMENT YEAR 2012-2013 TO THE EXTENT QUESTIONED HEREIN AND ETC.

THIS INCOME TAX APPEAL, COMING ON FOR ADMISSION, THIS DAY, P.S.DINESH KUMAR J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal by the Assessee challenging the order dated 21.06.2022 in ITA No.567/Bang/2020 passed by the ITAT1, "A" Bench, Bangalore, has been filed to consider following two questions of law: "(i) Whether on the facts and circumstances of the case, the Tribunal was correct in upholding the disallowance of the depreciation to the extent of Rs.2,25,00,657/- on the basis that the Appellant had not acquired any business and commercial rights without appreciating the material on record in the right perspective?

(ii) Whether on the facts and circumstances of the case, the Tribunal was right in holding that leasehold

1 Income tax Appellate Tribunal, Bengaluru Bench

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ITA No. 543 of 2022

rights partakes the character of land and would not be entitled to depreciation under Section 32 of the Act?

2.

Heard Ms.Tanmayee Rajkumar, learned advocate for the appellant-Assessee and Shri M.Dilip, learned advocate for the respondents-Revenue.

3.

Ms.Tanmayee Rajkumar submits that questions of law raised in this appeal have been answered in favour of the Assessee by this Court in Assessee's own case in Bangalore International Airport Ltd. Vs. The Deputy Commissioner of Income Tax and another2 4. The said submission is not disputed by Shri M.Dilip.

5.

In view of the above, the following:

(i) Appeal is allowed;

(ii) The first question of law is answered in favour of the Assessee subject to Assessee demonstrating before the Income Tax Officer the actual expenditure upon which depreciation of Rs.2,25,00,657/- has been claimed; and

2 ITA No.115/2017 DD 19.09.2022

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ITA No. 543 of 2022

(iii) The second question of law is answered in favour of the Assessee and against the Revenue.

No costs.

Sd/- JUDGE

Sd/- JUDGE

YN List No.: 1 Sl No.: 13

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