BSC C and C Kurali Toll Road Ltd. Vs ACIT (ITAT Delhi)
BSC C and C Kurali Toll Road Ltd. (the appellant) contested a decision made by the Commissioner of Income-tax (Appeals) (CIT(A)) for the Assessment Year 2014-15. The dispute revolves around several issues concerning the treatment of toll collection rights and associated costs.
Key issue: Depreciation on Toll Collection Rights:
The appellant claimed depreciation on the toll collection rights at a rate of 25% under the category of intangible assets, as specified under Section 32(1)(ii) of the Income Tax Act. However, the CIT(A) allowed depreciation at a lower rate of 10%. The appellant argued that the toll collection rights should be categorized as intangible assets and thus eligible for a 25% depreciation rate, based on precedents set by previous tribunal decisions.
The ITAT Delhi upheld the appellant’s claim for depreciation at 25% on the toll collection rights, treating them as intangible assets. The tribunal referenced previous rulings, including those from its own benches and other judicial precedents. Notably, decisions from ITAT Pune and other cases involving toll collection rights confirmed that such rights qualify as intangible assets under Section 32(1)(ii) of the Income Tax Act, allowing for a depreciation rate of 25%. The tribunal rejected the CIT(A)’s reliance on conflicting judgments and supported the claim based on established judicial precedents.
