ROADSTAR INVESTMENT MANGERS LTD,MUMBAI vs. ACIT CIRCLE 14 (1)(1), MUMBAI

This appeal is filed by Assessee M/s. Roadstar Investment Managers Ltd earlier known as North Karnataka Expressway Ltd., [Assessee/Appellant] against appellate order passed by The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi[Ld.

During the course of appeal assessee raised the additional ground before ld CIT (A) pertaining to the claim of allowance of depreciation at the rate of 25% treating to right to collect the toll on the road under the category as intangible asset under section 32(1)(ii) of the Act. Vide Para No.5.3, the Ld. CIT (A) did not admit the same holding that this was not raised by the Ld. AO during the assessment proceedings or at the time of filing of the appeal hence, it was dismissed.

Assessee is aggrieved by the same and claims that right to collect toll on the roads is an intangible assets on which depreciation at the rate of 25% should be allowed. In the grounds of appeal, itself the Assessee has stated that the Assessee has been allowed such claim from assessment year 2005-06 till 2010-11 by the co-ordinate bench in Assessee’s own case.

The Assessee has raised the following grounds of appeal:-

The brief facts of the case shows that the Assessee is a Public Limited company engaged in the business of infrastructure development project. It filed its return of income on 30.11.2014 as total income of Rs.13,04,73,586/-. The return of income was picked up for scrutiny. The claim of the Assessee for deduction under section 80IA (4) amounting of Rs.19,26,32,423/- was examined. The same was allowed to the extent of Rs.19,24,97,698/-. During the assessment proceedings as well as in the return of income, the Assessee has claimed amount of deduction on expenditure on road constructed for which right to collect toll was allotted to the Assessee on amortized value there was no claim before the Ld. AO to consider the depreciation on such intangible asset.

The assessment order dated 28.12.2016 passed under section 143(3) of the Act was challenged before the Ld. CIT(A) wherein the Assessee raised an additional ground of appeal that the Assessee should be granted

We have heard the rival contentions and perused the orders of the lower authorities. Whether the Assessee is eligible for depreciation on right to collect toll tax on road developed by the Assessee or not is already decided by the co-ordinate bench in Assessee’s own case bearing and 4373/MUM/2012 for assessment year 2005-06 and 2006-07. These orders of ITAT were followed by the co-ordinate benches in Assessee’s case for assessment year 2008-09, 2009-10 and 2010-11. Thus, it is clear that the right to set up infrastructure facility and collect toll on that is a commercial right, which is an intangible asset in terms of provisions under section 32(1) (ii) of the Act. Therefore, the Assessee is entitled to claim depreciation. Before the Ld. CIT (A), the Assessee has made the claim by raising an additional ground, which was incorrectly not admitted. As the issue is squarely covered in favour of the Assessee and the ground should have been admitted by the Ld. CIT (A), therefore this non- admission is not sustainable. On the merits, respectfully following the decision of the co-ordinate benches in Assessee’s own case we direct the Ld. AO to grant depreciation on the right to collect toll tax on infrastructure facilities considering same as

In the result, ground No.1 of the appeal of the Assessee is allowed.

In the result, appeal of the Assessee is allowed. .