CONTAINER CORPORATION OF INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

3. The l.d. CTT(A) has erred on facts and in law in directing the AO to allow deduction claimed by the assessee at Rs. 50,96,729/- on account of amortization of expenditure incurred on lease hold land. The l.d. CIT(A) has erred on facts and in km in directing the AO to allow 1/20th of Rs. 4. 50 crores as the deferred revenue expenditure for the relevant assessment year on account of commercial rights as granted by the Ministry of Railways of Railways to the assessee.

Page 3 of 21 5. The Ld. CIT(A) has erred on facts and in law in deleting addition of Rs.7,84,00.00 made by the AO on account of income from undelivered container. 6. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”

4. We first take up the appeal of the assessee. The ground No. 1 of the appeal of the assessee is general in nature and therefore same is dismissed.

5. Ground No. 2 of the appeal of the assessee was against the confirmation of the disallowance of claim of deduction of Rs. 812083246/- u/s 80(IA) of the Act on Inland Container Depot and Container Freight stations which are claimed to be „inland port‟. The brief facts are that the appellant is a govt company working under the Ministry of Railways and is engaged in the business of handling and transportation of container cargo. Its operating activities are mainly carried out at ICDS, CFS, and Port side container terminals (PSCT) across the country. Its wagons are running on Indian Railway tracks for container traffic and therefore, appellant claims that it is engaged in developing, operating and maintaining infrastructure facilities and income derived from these activities are eligible for deduction u/s 80IA of the Income Tax Act. For the year assessee has claimed deduction of Rs. 812083246/-. The ld Assessing Officer disallowed the claim holding that ICDS and CFS are not inland ports and therefore, they do not fall under the definition of infrastructure facility, hence, income derived from those facilities are not eligible for deduction. Aggrieved by the order of the Assessing Officer assessee carried the matter before the ld CIT(A), who in turn confirmed the decision of AO based on the decision of the coordinate bench in appellant‟s own case for AY 2003-04 to 2005-06. Therefore, in appeal before us this ground is raised. 6. The ld AR of the assessee submitted that now this issue is squarely covered in favour of the assessee in view of the decision of the Hon'ble Delhi High Court in its own case therefore submitted claim of the assessee is allowable. 7. The ld Departmental Representative fairly conceded that the issue is now squarely covered in favour of the assessee in views of the decision of Hon'ble Delhi High Court in its own case but the matter is pending before honourable supreme court. 8. We have carefully considered the rival contentions and we are of the view that Hon'ble Delhi High Court in assessee‟s own case in Container Corporation of India Ltd Vs. ACIT 346 ITR 140 covers the issue in favour of the assessee wherein, Hon'ble High Court has held as under:-

5. We may now notice the relevance of section 80-IA of the Act. The Finance Act, 1995, with effect from April 1, 1996, for the first time brought in a provision under which a percentage of the profits derived from the operation of any infrastructure facility" was allowed a deduction in computing the income of the assessee. This was allowed for a Page 4 of 21 period of ten consecutive assessment years. According to Circular No. 717, dated August 14, 1995, reported in [1995] 215 ITR (St.) 17, 70, 92, which explained the rationale behind the provision, the following was the objective : "34.2 Industrial modernisation requires a massive expansion of, and qualitative improvement in infrastructure. Our country is very deficient in infrastructure such as expressways, highways, airports, ports and rapid urban rail transport systems. Additional resources are needed to fulfil the requirements of the country within a reasonable time frame. In many countries the BOT (build-operate-transfer) or the BOOT (build-own-operate-transfer) concepts have been utilised for developing new infrastructure. 34.3 Applying commercial principles in the operation of infrastructure facilities can provide both managerial and financial efficiency. In view of this, a ten-year concession including a five-year tax holiday has been allowed for any enterprise which develops, maintains and operates any new infrastructure facility such as roads, highways, expressways, bridges, airports, ports and rail systems or any other public facility of similar nature as may be notified by the Board on BOT or BOOT or similar other basis (where there is an ultimate transfer of the facility to a Government or public authority). The enterprise has to enter into an agreement with the Central or State Government or a local authority or any other statu tory authority for this purpose. The period within which the infrastructure ture facility has to be transferred needs to be stipulated in the agreement between the undertaking and the Government concerned. The enter prise has to be owned by a company registered in India or a consortium of such companies. The tax holiday will be in respect of income derived from the use of the infrastructure facilities developed by them."

6. The term "infrastructure facility" was defined in section 80-IA(12)(ca) to mean a road, highway, bridge, airport, port or rail system or any other public facility of a similar nature as may be notified by the Central Board of Direct Taxes in the Official Gazette.

7. The Finance (No. 2) Act, 1996, expanded the definition of the "infrastructure facility", to include water supply project, irrigation project, sanitation and sewerage system. The Income-tax (Amendment) Act, 1998, made several changes all of which are not relevant for our purpose. It may only be noted that again the definition of "infrastructure facility" was expanded to include a highway project including housing or other activities being integral part of the highway project.

9. In paragraph 43 of Circular No. 772, dated December 23, 1995, reported in [1999] 235 ITR (St.) 35, 67, the Board explained the inclusion of "inland waterways and inland ports" in the definition of "infrastructure facility" as follows : "43. Inland port and waterways regarded as infrastructure facility :

Page 5 of 21 43.1 Under the existing provisions of section 80-IA, roads, high ways, bridge, airport, port and rail system are regarded as infrastructure facilities and the undertakings engaged in developing, maintaining or operating such infrastructure facility are entitled to a tax holiday for 5years and a deduction of 30 per cent. of profits for the next 5 years. These companies have the choice of availing of such benefits in any 10 consecutive years out of initial 12 years from the year in which they commence production. 43.2 The Government has identified national waterways, the fourth mode of transport, for improving the transport infrastructure in the country. Inland waterways and inland ports play a vital role in improving a country's infrastructure. With the objective of improving the transport infrastructure, the Act has included inland waterways and inland ports in the definition of 'infrastructure facility' as given in section 80-IA. The undertakings engaged in the development of such infrastructure would be entitled to two-tier fiscal benefits as out lined above." (underlining ours) 10. Thus, it was for the first time from the assessment year 1999-2000 that inland ports started enjoying the deduction under section 80-IA as an "infrastructure facility". The object of the Government was to strengthen and improve the country's infrastructure in general and the transport infrastructure in particular. Inland ports facilitate the transport infrastructure by taking care of the transport of the customs-cleared goods meant for export from the inland container depot to the sea-port and the imported goods directly from the sea-port to the inland container depot where they can be customs- cleared. When the entire section was recast by the Finance Act, 1999, with effect from April 1, 2000, and even after several amendments were thereafter made to the section, inland ports continued to enjoy the deduction as infrastructure facility.

12. The power to notify infrastructure facilities for the purpose of the section was taken away from the Central Board of Direct Taxes with effect from April 1, 2002. The first argument of the learned counsel for the assessee is that once the inland container depots have been notified validly by the Central Board of Direct Taxes by virtue of the powers conferred upon them, the fact that at a later point of time the power was taken away does not put an end to the validity or effect of the notification and as per the relevant Page 6 of 21 section as it stood at the time when the notification was issued, the assessee was eligible for the deduction for a period of 10 successive assessment years which covers the assessment years 2003-04 to 2005-06 which are the years under appeal.

13. We have examined the contention. Prior to the amendment made with effect from April 1, 2002, by the Finance Act, 2001, as noticed earlier, the Board was empowered to notify any public facility of a similar nature, other than what was mentioned as infrastructure facility. But an amendment was made and the power to notify was dropped. There was no provision made in the Act saying that the notification issued earlier would cease to have effect from April 1, 2002. Since the notification continued to have effect even beyond April 1, 2002, there is merit in the contention of the learned counsel for the assessee. Circular No. 7 of 2002, dated August 26, 2002, reported in [2002] 257 ITR (St.) 28 clarified as under : "Such projects, for which agreements have been entered into on or after April 1, 1995, but on or before March 31, 2001, and which have been notified by the Board on or before March 31, 2001, would conti nue to be exempt, subject to the fulfilment of the conditions prescribed in section 80-IA(4)(i)(b), as it existed prior to its substitution by the Finance Act, 2001." This circular fortifies the assessee's claim.

14. The next question that arises is whether the inland container depots can be considered to be inland ports. There is no definition of an inland port in the Act. However, a "port", which also qualifies for the deduction is defined in section 3(4) of the Indian Ports Act, 1908 (Act 15 of 1908), to include "also any part of a river or channel" in which the said Act is for the time being in force. The word "port" is defined in T. Ramanatha Aiyar's Law Lexicon, fourth edition (2010) in a number of ways. The most general meaning which is given is that it denotes a harbour or shelter to the vessels from a storm or as a place with a harbour where ships load or unload. It has also been defined in the commercial sense as an enclosed place where vessels load and unload goods for export or import. Commercially considered, "a port is a place where vessels are in the habit of loading and unloading goods". The law lexicon also refers to a judgment of the Bombay High Court in the case of Amership Management P. Ltd. v. Union of India [1996] 86 ELT 15 (Bom). The Bombay High Court has explained the word "port" as under : "Port is a place for loading and unloading of cargoes of vessels. The word 'port' must be construed in its usual and limited popular or commercial sense as a place where ships are in the habit of coming for the purpose of loading or unloading, embarking or disembarking. It does not mean the physical port. On this basis, it has been held that an oil rig stationed outside territorial waters is a port where ships call for loading or unloading the goods. Amership Management P. Ltd. v. Union of India [1996] 86 ELT 15 (Bom)."

15. It is interesting to note that the word "port approaches" is defined as those ports of the navigable channels leading to the port in which the Indian Ports Act is in force. There are several other definitions such as port call, port charges, port mark, port of arrival, port of entry, port of departure, port of call and so on and so forth. The whole emphasis, however, is that whenever the word "port" is used, it carries with it a maritime connection or connotation. That is perhaps why the section refers separately to airport. An airport does not have a maritime connection. But an airport is also a place where customs clearance are made both for import and export. It would be difficult to put the assessee's case as falling within the word "port" having regard to the fact that the word carries with it a maritime connotation. The inland container depots are land- Page 7 of 21 locked and it is nobody's case that they are located in such a place where ships or vessels have direct access to them. The goods which are either removed from or brought into the inland container depots are brought or taken away either by railway wagons or by container trucks, as the case may be. But it is common ground that customs clearances take place in the inland container depots.

17. On May 25, 2009, an office memorandum was issued by the Infrastructural Division, Department of Commerce, Ministry of Commerce and Industry of the Government of India which is as follows : "No. 16/9/2009-Infra-I Government of India, Ministry of Commerce and Industry, Department of Commerce, Infrastructure Division, New Delhi, The 21st May, 2009. Office memorandum Subject : Reference from Concor and CFS Association of India regarding confirming that inland container depots/container freight stations are inland ports regarding The undersigned is directed to refer to this Department's O. M. of even number dated September 1, 2008, on the above subject. In this regard, Concor and CFS Association of India have represented that in order to accord tax benefit under section 80-IA of Income-tax Act, 1961, the Ministry of Finance required a more specific reply clarifying the status of inland container depots/container freight stations in the country. A copy of the representation is enclosed. 3. The matter has been examined in this Department and it is clarified that inland container depots/container freight stations are inland ports. The Central Board of Direct Taxes may accordingly take decision for the purpose of exemption of inland container depots/container freight stations of Concor or a private party under section 80-IA of Income-tax Act. (S. G. Sood) Under Secretary to the Govt. of India, Department of Revenue, (Shri Padam Singh, Under Secretary (ITA-I) Central Board of Direct Taxes, North Block, New Delhi. Fax : 23095417"

Page 9 of 21 eliminating customs formalities at the sea port. Alternatively also known as 'inland customs depot' (see also dry port). It further goes on to give a more elaborate definition under the heading "dry ports defined" as under : An early definition of dry port which appeared in a United Nations text in 1982 was :

'An inland terminal to which shipping companies issue their own import bills of lading for import cargoes assuming full responsibility of costs and conditions and from which shipping companies issue their own bills of lading for export cargoes'. It further goes to add as under : Recently a dry port or inland clearance depot (ICD) was defined as :

'A common user inland facility with public authority status, equipped with fixed installations and offering services of handling and temporary storage of any kinds of goods (including containers) carried under customs transit by any applicable mode of inland surface transport, placed under customs control and with customs and other agencies competent to clear goods for home use, ware housing, temporary admissions, re-export, temporary storage for onward transit and outright exports.' (ECE/UNCTAD/CCC)." The above extracts from the hand book supports the claim of the assessee.

21. The Tribunal erred in holding that because of the change made by the Finance Act, 2001, with effect from April 1, 2002, by dropping the power of the Central Board of Direct Taxes to notify any other public facility of similar nature for the purpose of section 80-IA of the Act, the inland container depot cannot be considered as inland port. The error committed by the Tribunal is to overlook that both before and after the above amendment, inland ports were specifically mentioned as an infrastructure facility in the statutory provision and in the understanding of the CBEC, which administers the Customs Act, an inland container depot was actually an inland port. There is also no dispute that even in 1983 amendments had been made to the Customs Act by treating the inland container depots as part of the customs port for purpose of customs formalities and clearances. In these circumstances, the real question was not whether the Central Board of Direct Taxes notified the inland container depot as an inland port but whether the inland container depot can be considered to be an inland port. In our opinion, having regard to the provisions of the Customs Act, the communications issued by the CBEC as well as the Ministry of Commerce and Industry, the object of including "inland port" as an infrastructure facility and also having regard to the fact that customs clearance also takes place in the inland container depot, the assessee's claim that the Page 10 of 21 inland container depots are inland ports under Explanation (d) to section 80-IA(4) requires to be upheld.

11. Ground No. 3 and 4 of the appeal of the assessee are against confirmation of the disallowance of a sum of Rs. 50 crores being registration fees paid to the Ministry of Railways for movement of container trains on India Railways. The ld Assessing Officer allowed 1/20th of the amount as deduction. The ground No. 4 was against denying the claim of depreciation of Rs. 82031250/- being 20% of the amount of Rs. 50 crores. Brief facts of the case is that appellant company has paid Rs. 50 crores to Ministry of Railways as non refundable registration fees towards license for running container trains on India Railways. The appellant claimed depreciation @25% on the above sum. In its annual accounts it has also mentioned as significant accounting policy that registration fee paid to Railway Ministry for approval of movement of container on Indian Railway facilities is capitalized as an intangible asset to be amortized over a period of 20 years. According to the assessee the license or any other business or commercial rights of similar nature is „intangible assets‟ , therefore the right to ply on Indian Railways is a „commercial right‟ and therefore depreciation @25% was claimed. The ld Assessing Officer disallowed the same holding that it is deferred revenue expenditure and not an intangible asset. On an appeal before the ld CIT(A), who confirmed the finding of the ld Assessing Officer and therefore the assessee is in appeal before us.

13. The ld Departmental Representative submitted that as the assessee has not incurred any capital expenditure but only paid non refundable fee and therefore there is no capital assets coming in to existence and depreciation on this has rightly been disallowed by lower authorities.

“12. In the present case, it is seen that the assessee, vide slump sale agreement dated June 30, 2004, acquired, as a going concern, the transmission and distribution business of the transferor company with effect from April 1, 2004. As a result thereof, the running business of transmission and distribution was acquired by the transferee lock, stock and barrel minus the trade mark of the transferor which was retained by the transferor, for lump sum consideration of Rs. 44.7 crores. It is further seen that the book value of the net tangible assets (assets minus liabilities) acquired was recorded in the balance-sheet of the transferor as on the date of transfer as Rs. 28.11 crores. The said assets and liabilities were recorded in the books of transferee at the same value as appeared in the books of the transferor. The balance payment of Rs. 16,58,76,000 over and above the book value of net tangible assets, was allocated by the transferee towards acquisition of bundle of business and commercial rights, clearly defined in the slump sale agreement, compendiously termed as "goodwill" in the books of account, which comprised, inter alia, the following : (i) business claims, (ii) business information, (iii) business records, (iv) contracts, (v) skilled employees, (vi) know-how. It is also observed that the Assessing Officer accepted the allocation of the slump consideration of Rs. 44.7 crores paid by the transferee, between tangible assets and intangible assets (described as goodwill) acquired as part of the running business. The Assessing Officer, however, held that depreciation in terms of section 32(1)(ii) of the Act was not, in law, available on goodwill. The Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal approved the reasoning of the Assessing Officer thereby holding disallowance of depreciation on the amount described as goodwill. It was thus argued on behalf of the assessee-company that section 32(1)(ii) would mean rights similar in nature as the specified assets, viz., intangible, valuable and capable of being transferred and that such assets were eligible for depreciation. On behalf of the respondent it was argued that applying the doctrine of noscitur sociis the expression "any other business or commercial rights of similar nature" used in Explanation 3(b) to section 32(1) has to take colour from the preceding words "know-how, patents, copyrights, trade marks, licences, franchises". It was urged that the Supreme Court had clearly held in Techno Shares and Stocks Ltd. [2010] 327 ITR 323 (SC) that "Our judgment should not be understood to mean that every business or commercial right would constitute a "licence" or a "franchise" in terms of section 32(1)(ii) of the 1961 Act".

14. In view of the above discussion, we are of the view that the specified intangible assets acquired under slump sale agreement were in the nature of "business or commercial rights of similar nature" specified in section 32(1)(ii) of the Act and were accordingly eligible for depreciation under that section.”

16. Now we come to the appeal of the revenue.

is against the addition deleted by ld CIT(A) of Rs. 636287/- on assets retired from active use on account of obsolescence and condemnation.

18. The brief facts of the issue is that the assessee has reduced from the gross block of plant and machinery the above sum stating that it was retired from active use. Therefore, the ld Assessing Officer disallowed the depreciation claimed on the above assets. On appeal before the ld CIT(A), he deleted the addition for the reason that the above issue was covered by the Page 14 of 21 decision in earlier years. He allowed the claim following the decision of the Hon'ble Delhi High Court in case of CST Vs. Bharat Aluminium 187 Taxmann 111.

19. The ld Departmental Representative relied on the order of the AO. Whereas the ld AR submitted that the issue is now squarely covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in case of CIT Vs. Yamaha Motor India Pvt. Ltd 328 ITR 297.

20. We have carefully considered the rival contentions. The first appellate authority has allowed the claim of the assessee who following the decision of the earlier years in its own case and further following the decision of the Hon'ble Delhi High Court. The Hon'ble Delhi High Court in case of CIT Vs. Yamaha Motor India Pvt. Ltd has considered an identical issue in 328 ITR 297 as under:-

10. We, therefore, answer the two questions of law by holding that the Income-tax Appellate Tribunal was correct in law in directing the Assessing Officer to recompute depreciation after reducing the scrap value of the assets which have been discarded and written off in the books of account for the year under consideration from the written down value of the block of assets. Actual user of the machinery is not required with respect to discarded machinery and the condition for eligibility for depreciation that the machinery being used for the purpose of the business would mean that the discarded machinery is used for the purpose of the business in the earlier years for which depreciation has been allowed.”

22. Ground No. 2 of the appeal of the revenue is pertaining to deletion of the addition of 43.78 crores on termination of contracts.

Page 17 of 21 deleted the above addition that the assessee has shown Rs. 2.54 crores under the head „current liability‟ and is liable to refunded back to the customers and with respect to Rs. 5.30 crores he held that it is a custom duty which has been paid to the Govt. on various dates.

2. That on the facts and in the circumstances of the case and in law the ld CIT(A) has erred both on facts and in law in partly confirming the disallowance by the AO,, and restricting the allowance of deduction at 1/20th of the amount of Rs. 50 crores being registration fee paid to the Ministry of Railways for approval of movement of container trains on India Railways.

3. That on the facts and in the circumstances of the case and in law the ld CIT(A) has erred both on facts and in law in denying the claim of deduction of Rs. 6,15,23,438/- being 25% of the amount of Rs. 50 crores which is allowable in full as per the law/ rules.”

38. The first ground of the appeal of the assessee is general in nature and therefore same is dismissed.

39. Ground No. 2 and 3 of the appeal of the assessee are with respect to disallowance of depreciation on intangible assets being a sum of Rs. 50 cores as registration fees paid to the Ministry of Railways for approval of movement of container trains. The parties confirmed Page 18 of 21 before us that the facts and circumstances of these ground are similar to the ground No. 3 and 4 of the appeal of the assessee in AY 2008-09. Therefore, we also hold in this year that assessee has acquired commercial rights which is eligible for depreciation as an intangible asset u/s 32(1)(ii) of the Income Tax Act. Therefore we also hold accordingly in ground No. 2 and 3 of the appeal of the assessee. In the result ground No. 2 and 3 of the appeal of the assessee are allowed.

2. The Ld. CIT(A) has erred in law and on facts in deleting the addition amounting to Rs. 84,84,10,427/-made on account of disallowance of deduction claimed u/s 80IA on rolling stock ignoring that the same cannot be included within the meaning of "infrastructure facility" as per explanation under subsection (4)(c) of section 80IA of the Act as the rolling stock does not form part of rail system.

3. The Ld. CIT(A) has erred in law and on facts in deleting the addition amounting to Rs. 5,67,216/-made on account of disallowance of assets retired from active use ignoring the fact that once the individual asset is not put to use, which is pre-quisite condition for availing depreciation u/s 32 of the l.T. Act, the same becomes ineligible/disqualified for block of assets on which depreciation is allowed as per Rule-5 and appendix IA of the Income Tax Rules 1962 but shall continue to remain the part of the block of assets for all other purpose except for the purpose of claiming depreciation unless put to use.

4. The Ld. CIT(A) has erred in law and on facts in deleting the addition amounting to Rs. 16.00,030/-made on account of disallowance of assets retired from active use ignoring the fact that once the individual asset is not put to use, which is pre-quisite condition for availing depreciation u/s 32 of the l.T.Act , the same becomes ineligible/disqualified for block of assets on which depreciation is allowed as per Rule-5 and appendix IA of the Income Tax Rules 1962 but shall continue to remain the part of the block of assets for all other purpose except for the purpose of claiming depreciation unless put to use.

5. The Ld. CIT(A) has erred in law and on facts in deleting the addition amounting to Rs. 6,15,23,438/-made on account of disallowance of depreciation on registration fee ignoring the fact that the assessee has itself declared the same as deferred revenue expenditure as per para 3(ii) of schedule 10(Significant Accounting Policies) and hence the same cannot be treated as intangible asset and accordingly no depreciation is allowable on the same.

Page 19 of 21 6. The Ld. CIT(A) has erred in law and on facts in deleting the addition amounting to Rs. 2,59,12,954/-made on account of disallowance of depreciation on land ignoring that land cannot be considered as a depreciable asset and no depreciation rates are prescribed as per I-T Act Rules.

7. The Ld. CIT(A) has erred in law and on facts in deleting the addition amounting to Rs. 26,14,345/-made on account of disallowance of extra depreciation claimed on computer peripherals ignoring the fact that as per the provisions of section 32 of the I- T Act computer peripherals are out of ambit of the term "computer including computer software" used exhaustively for the purpose of claiming depreciation @60% of block 6(i) of block of assets as specified in the Act.”

is on the issue of claim of the assessee of Rs. 848410427/- u/s 80IA on ICDs and CFS. The above issue has been decided by us in favour of the assessee in ground No. 2 and 3 of the appeal of the revenue for AY 2008-09. We have held that assessee is eligible for deduction u/s 80IA on income derived from infrastructure facilities of ICDs and CFS. We also hold similarly for this year too. In the result ground No. 1 revenue is dismissed.

44. Ground No. 2 of the appeal of the revenue is with respect to claim of deduction u/s 80IA for rolling stock. The parties before us have confirmed that this issue is covered in favour of the assessee by the decision of the coordinate bench in appellant‟s own case for AY 2003-04 to 2005-06. The ld CIT(A) has also follow that decision in and 3680/Del/2007 wherein in para No. 31 it has been held that rolling stock is part and parcel of rail system and accordingly, it is eligible for claim of deduction u/s 80IA of the Income Tax Act. in views of this we respectfully following the decision of the coordinate bench filed no infirmity in the order of the ld CIT(A) and dismiss ground No. 2 of the appeal of the revenue.

45. Ground No. 3 and 4 of the appeal of the revenue are against deletion of disallowance of assets retired from active use.

46. The parties have stated that these grounds are identical to ground No. 1 of the appeal of the revenue for AY 2008-09. We have relying on the decision of the Hon'ble Delhi High Court in CIT Vs. Yamaha Motor Co. Ltd has held that depreciation on assets retired from active use cannot be disallowed. Therefore, following our own decision for AY 2008-09 we dismiss ground No. 3 and 4 of the appeal of the revenue.

47. Ground No. 5 of the appeal of the revenue is against disallowance of depreciation on registration fees of Rs. 61523438/-.

48. The parties submitted that above issue is with respect to intangible assets on registration fees paid to Ministry of Railways. The above issue has already been decided by us by deciding ground No. 3 and 4 of the appeal of the assessee wherein we have held that the assessee is eligible for depreciation on intangible assets of registration fees paid to Ministry of Railway u/s 32(1)(ii) of the Income Tax Act. Therefore, we hold the same for ground No. 5 of the appeal of the revenue and dismiss the ground of appeal.

Page 20 of 21 49. Ground No. 6 of the appeal of the revenue is against the deletion of disallowance of depreciation on land amounting to Rs. 25912954/-. The ld AO stated that as deprecation on land is not allowable and same was disallowed. The ld CIT(A) allowed the claim of the assessee following his own order for AY 2004-05.

of the revenue back to the file of Assessing Officer with a direction to the assessee to furnish the complete details of the claim of the assessee clearly bringing out the facts whether it is a claim of the depreciation or whether it is a claim of the allowability of expenditure.

53. Ground No. 7 of the appeal of the revenue is against disallowance of depreciation at higher rate on computer peripherals @60% instead of 25%.

54. The ld AO has disallowed depreciation on the same holding that computer accessories and peripherals are not eligible for depreciation at the higher rate whereas the ld CIT(A) allowed the claim of the assessee following the decision of the tribunal in the own case of the assessee for earlier years. Now the issue is squarely cover in favour of the assessee by the decision of the Hon'ble Delhi High Court in case of CIT Vs. BSES Yamuna power Ltd 358 ITR 47 Del) depreciation @60% on account of computer peripherals is allowed. Therefore, we dismiss ground No. 7 of the appeal of the revenue.