Baleshwar Kharagpur Expressway Limited Vs PCIT (ITAT Mumbai)
Toll Road Belongs to NHAI, but Who Owns the Right to Collect Toll? ITAT Quashes Section 263 Revision
Summary: The National Highways Authority of India owned the highway. The company that built and operated it under a concession agreement claimed depreciation on something different: its 24-year right to operate the project and collect toll. The Assessing Officer examined that claim in reassessment and accepted it. The Principal Commissioner then invoked section 263, holding that the company should receive amortisation of its project cost instead of depreciation.
The Mumbai Tribunal quashed the revision. The reassessment had been opened for the very purpose of examining the depreciation claim, and the Assessing Officer had considered it before taking a view. The Tribunal also held that the concession gave the company a licence and a toll-collection right capable of being treated as an intangible asset under section 32(1)(ii).
How the Depreciation Dispute Arose
Baleshwar Kharagpur Expressway Ltd. was a special purpose vehicle promoted for infrastructure development. Under a concession agreement dated 24 March 2012, it undertook work on the Kharagpur–Baleshwar highway, including construction, strengthening, operation and maintenance. In return, NHAI granted it the right to operate the project and collect toll for 24 years, subject to the agreement’s terms.
