ASSISTANT COMMISSIONER OF INCOME-TAX vs. M/S. ASHOKA INFRAWAYS PVT. LTD., NASHIK

आदेश / ORDER

PER SUSHMA CHOWLA, JM :

consolidated order of Commissioner of Income Tax (Appeals) – 12,

Pune dated 27.10.2015 relating to assessment years 2005-06 to

2011-12 against the order passed under Section 143(3) r.w.s. 153C

of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has

filed Cross-Objections against the appeals filed by the Revenue

relating to assessment years 2005-06 to 2010-11.

by the assessee were heard together and are being disposed of by

this consolidated order for the sake of convenience. However, in

order to adjudicate, we are referring to the facts and issue in ITA

No.60/PUN/2016 and C.O.No.114/PUN/2017.

following grounds of appeal :

“1. On the facts and circumstances of the case and in law the ld. CIT(A) has erred in deleting in allowing the depreciation at 25% on ‘Licence to collect toll’. 2. On the facts and circumstances of the case and in law the ld. CIT(A) was justified in holding that assessee was eligible to claim depreciation on ‘Licence to collect toll’ considering it as an intangible asset in terms of section 32(1)(ii) of the Act. 3. On the facts and circumstances of the case and in law the ld. CIT(A) has failed to appreciate that the department has not accepted the decision of the ITAT, Pune and an appeal has been filed under Section 260A of the Act before the Hon’ble Bombay High Court.

following Cross-Objections:

“The learned CIT(A) erred in not deciding the ground Nos.1, 2 and 3 relating to the validity of the Notice issued under Section 153C, the proceedings for assessment under Section 153C r.w.s. 143(3) and the assessment order passed under Section 153C r.w.s. 143(3), on the ground that, appellant’s appeal is allowed on merits. Therefore, it is prayed to allow appellant’s ground challenging the validity of Notice under Section 153C, assessment proceedings under Section 153C and the assessment order passed under Section 153C r.w.s 143(3). 2. Appellant craves leave to add, amend or modify any ground of appeal before or at the time of hearing.

the order of Commissioner of Income Tax (Appeals) in allowing the

depreciation at 25% on licence to collect toll. Despite service of

notice, none appeared on behalf of the assessee nor any application

has filed for adjournment. However, the issue arising in the

present appeal is squarely covered by the series of the decisions of

the Tribunal and also the case of the assessee itself. Hence, we

proceed to dispose of the present bunch of appeals and Cross-

Objections after hearing the Ld.D.R. for the Revenue.

filed the return of income declaring nil. The assessee was engaged

in infrastructure development and maintenance of toll stations.

The holding company M/s. Ashoka Buildcon was awarded the

construction of Dewas By-pass starting from k.m 159/4 of Bhopal–

Ujjain Road (SH-18) and joining km 577/6 of Agra Bombay Road,

(N.H.3) intersecting NH-3 in km 567/8 and SH 18 in km 151/8

(total length – 19.8 kms) including construction of one medium

bridge, 27 nos. of culverts, junctions and rotaries, protection work,

toll tax barriers and booth, plantation, fencing, truck parking lay-

bye and longitudinal drains etc. on BOT (Build Operate & Transfer)

basis. The said Ashoka Buildcon Ltd., had assigned all its rights

and obligation under the said contract in favour of the company.

The company was entitled to collect toll tax for 3999 days after Toll

notification date i.e. from 24th May 2014 till 6th May 2015. Thus

assessment year 2005-06 was the first year of operation of the

assessee’s business activity. As per director’s report, the assessee

Company had commissioned the project on 23rd May 2004. The

assessee company, as per directions of the PWD, MP, was collecting

Toll only at one plaza instead of 3 toll plazas and the company was

in the process of ascertaining the compensation receivable from

PWD for loss of toll. In the return of income the assessee had

claimed depreciation on ‘intangible asset’ being right to collect the

toll during the period involved in the Government Notification

granting such rights (11 years). Such depreciation was claimed at

25% on the reducing balance method for the income-tax purposes

at Rs.15,26,38,581/-. The amount of licence was included in the

gross block of assets Rs.61,05,54,325/- being the first year’s

opening value. The span of the said right as per the notification

was May, 2004 to May 2015, i.e. for the period of 136 months. The

Assessing Officer in the original assessment had denied the claim of

depreciation on the right to collect toll holding the same not to be

an intangible asset. However, the Commissioner of Income Tax

(Appeals) reversed the order of Assessing Officer.

carried out in the Ashoka Group of cases on 20.04.2010. During

the course of search, incriminating documents pertaining to the

assessee company were seized from the searched premises of M/s.

Ashoka Buildcon Ltd. The proceedings were initiated against the

assessee under Section 153C of the Act. In response to notice

issued by the Assessing Officer under Section 153C of the Act, the

assessee filed return of income declaring total income at nil. The

assessment proceedings were taken up for scrutiny. During the

course of the proceedings, the assessee vehemently stated that

when the Commissioner of Income Tax (Appeals)’s order reversing

the order of the Assessing Officer in the original assessment had

attained finality, the decision becomes binding as far as the

Assessing Officer was concerned. The Assessing Officer rejecting

the said plea of the assessee and in view of the fact that the order of

CIT / ITAT were subjudiced before the higher Appellate Forum held

that the matter had not reached finality. Hence, the depreciation

claimed on the right to collect toll was held not to be allowable to

the assessee.

validity of the notice issued under Section 153C of the Act and held

the same against the assessee. In response to the issue raised on

merits, the Commissioner of Income Tax (Appeals) observed that the

Tribunal in assessee’s own case in ITA Nos.185 and 186/PN/2012

for assessment years 2006-07 and 2007-08, order dated

29.04.2013 had held the assessee to be entitled to claim

depreciation @ 25% on the right to collect toll by treating the same

as intangible asset. The assessee was eligible for depreciation. The

relevant findings of the Tribunal are reproduced at Pages 11 and 12

of the Appellate Order. The Commissioner of Income Tax (Appeals)

following the same, directed the Assessing Officer to allow the

depreciation @ 25% as claimed by the assessee and also directed

the Assessing Officer to withdraw the reduction allowed on

amortization of costs for assessment year 2005-06.

of Income Tax (Appeals). On perusal of the records, we find that the

assessment in the present case was completed under Section 153C

of the Act r.w.s. 143(3) of the Act. Though, the assessee did not put

in an appearance before the Tribunal, however, the assessee has

filed the Paper Book which is available on record. The issue which

is raised in the appeal of Revenue is against the claim of

depreciation on the right to collect toll, being an intangible asset.

The Assessing Officer was of the view that no such depreciation was

allowable. Whereas, the Commissioner of Income Tax (Appeals)

following the earlier order of the Tribunal (supra) in assessment

years 2006-07 and 2007-08 allowed the claim of the assessee. The

copy of the said order of the Tribunal is available at Pages 45 to 51

of the Paper Book. The year under appeals are starting from

assessment years 2005-06 to 2011-12. The assessment has been

completed as pointed earlier under Section 153C r.w.s 143(3) of the

Act. In the first instance, we hold that the assessee is entitled to

the claim of depreciation at 25% on the right to collect toll being an

intangible asset. Accordingly, we uphold the order of Commissioner

of Income Tax (Appeals) in this regard and also uphold the direction

to the Assessing Officer to withdraw the deduction allowed on

amortization of the costs for assessment year 2005-06. The

relevant portion of the order of the Tribunal are reproduced in the

order of the Commissioner of Income Tax (Appeals) at

Pages 11 and 12 and the for the sake of brevity, though we are

referring to the same but are not reproducing the same.

Tribunal in the case of Ashoka Infrastructure Ltd., in ITA Nos.1452

to 1457/PN/2014 relating to assessment years 2006-07 to 2011-

favour of the assessee. The copy of the said order is available at

Pages 54 to 93 of the Paper Book filed by the assessee.

Accordingly, we dismiss the grounds of the appeal of Revenue.

Officer passed under Section 143(3) r.w.s 153C of the Act where he

has raised an issue of disallowance of depreciation as right to

collect toll which was already adjudicated in the 143(3) proceedings

against the assessee. Once the issue had already been decided

then on similar ground, the Assessing Officer is precluded from

again disallowing claim of the assessee in the order passed under

Section 143(3) r.w.s 153C of the Act.

66/PUN/2016 are identical to the facts and issues raised in ITA

No.60/PUN/2016 and accordingly, our decision in ITA

No.60/PUN/2016 would apply mutatis-mutandis to ITA

Nos.61/PUN/2016 to 66/PUN/2016.

which are against the invoking of jurisdiction under Section 153C

of the Act. The said issue becomes academic in view of our deciding the issue on merits in favour of the assessee and in the absence of the assessee raising any argument in this regard. We dismiss the same being academic. Therefore, all the C.O. Nos.114/PUN/2017 to 119/PUN/2017 are dismissed as academic.

14 In the result, the appeals filed by the Revenue and the Cross- Objections filed by the assessee are dismissed.

Order pronounced on 28th day of March, 2018.

Sd/- Sd/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER

पुणे Pune; �दनांक Dated : 28th March, 2018. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy //

व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.