Depreciation on right to build and operate tool road is admissible as intangible asset

DCIT Vs Telecommunication Consultants India Ltd. (ITAT Delhi)

ITAT Delhi held that right to build and operate toll road are considered to be an intangible assets and accordingly depreciation as admissible to intangible assets is available to it.

Facts- The assessee is engaged in the business of Prime multi-disciplinary organization providing a full range of consultancy, design & engineering services in various fields of telecommunications, IT, and civil construction in India as well as abroad.

The assessee has been granted the right to collect the toll from the user of the road and this right arises out of investment made by the assessee towards the construction of the road. The assessee had claimed depreciation at the rate of 25% on its right to build and operate in a transfer arrangement by treating the same as an intangible asset. AO restricted depreciation to 7.41%.

CIT(A) deleted the addition towards disallowance of depreciation on right to build and operate Toll Road. Being aggrieved, revenue has preferred the present appeal.

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