Case Law Details
CIT Vs GVK Jaipur Kishangarh Expressway Ltd. (Rajasthan High Court)
Conclusion: Depreciation was allowable @10% on public highway road treating the same as building.
Held: Assessee-company was engaged in construction, operations and maintenance of highways. It entered into a concession agreement with the National Highways Authority of India (NHAI) for widening of two lane road to six lane roads on Build operate Transfer (BOT) basis. The work of the widening of the Highway was completed by assessee and the road was opened to the public on 9-4-2005 and since then the assessee was maintaining the said road on toll basis. In the computation of income, assessee had claimed depreciation of Rs. 29,71,10,536/@10% on account of road, treating the same as building. During the course of the assessment proceeding, AO asked assessee as to why the depreciation claimed at road should not be disallowed by the following decision of the Apex Court in the case Indore Municipal Corporation (2001) 247 ITR 803 (SC). It was held assessee was granted license for construction against which it had right to use and collect license fee to use of the land. It had right to restrict the people without non payment of toll tax. It was not only road, they had to construct toll booth and provide facilities for the staff for the purpose of their accommodation. Thus, Supreme Court judgment which was sought to be relied upon by department would not apply and Tribunal had rightly interpreted the change in law and more particularly under the law which had been inducted after year 1983.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
In all these appeals common questions of law and facts are involved hence they are decided by this common judgment.
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