ACIT Vs Delhi Airport Metro Express Private Limited (ITAT Delhi)
ITAT Delhi held that even though assessee is not the owner of the Airport Metro Express Line Project it has right to collect fare from commercial operations. Thus, depreciation is eligible on such intangible assets as per provisions of section 32(1)(ii).
Facts- The assessee was a concessionaire for the Airport Metro Express Project of Delhi Metro Rail Corporation (DMRC) and had, pursuant to Concession Agreement dated 25.08.2008, developed the Airport Metro Express Project under Build-Operate-Transfer (BOT) scheme.
The assessee company in its profit and loss account had debited amortization/depreciation of the cost of development incurred in Airport Metro Express Project at Rs.4,45,51,048/- whereas in the computation of income claimed depreciation at Rs. 297,86,65,783/-as per section 32 of Income Tax Act and declared loss of Rs.573,72,02,672/-in its return of income as against the loss of Rs.325,65,17,845/- as per its Profit and Loss Account.
According to the AO, the assessee being a concessionaire cannot claim depreciation on the assets developed by it under BOT scheme since the infrastructure developed by the concessionaire was not owned by it and, therefore, depreciation on such assets was not admissible to it. AO disallowed the claim of depreciation amounting to Rs.297,86,65,783/- and instead allowed the amortization of Rs.75,93,00,658/- for this year of entire expenditure over the period of concession agreement of 30 years and thereby made a net disallowance of Rs.221,93,65,125/- on account of depreciation claimed by the assessee company.
