Kurukshetra Expressway Pvt Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi held that expenditure in Built Operate and Transfer (BOT) project giving rise to an intangible assets eligible for claiming depreciation @25% on road construction admissible.
Facts- The appellant/assessee is a Special Purpose Vehicle incorporated for carrying out construction, operation and transfer of a stretch of the Rohtak Bawal Highway Project on Built Operate and Transfer (BOT) basis.
Appellant claimed depreciation of Rs. 2,04,32,08,982/- viz. @25% on the right to collect toll granted to the appellant due to its capital investment in the BOT project-by treating the “right to collect toll” as intangible assets.
Vide the assessment proceedings u/s. 143(3), the claim of depreciation was not allowed. CIT(A) too denied the claim. Being aggrieved, the present appeal is filed.
Conclusion- Special Bench of ITAT Hyderabad in ACIT Hyderabad M/s. Progressive Construction Limited, Hyderabad held that the expenditure incurred by the assessee for construction of road under BOT contract by the Government of India has given rise to an intangible asset as defined under Explanation 3(b) r/w section 32(1)(ii) of the Act. Hence, assessee is eligible to claim depreciation on such asset at the specified rate.
Held that the appellant/Assessee is entitled to claim depreciation @25% on road construction as admissible on intangible assets. Therefore, the impugned orders are not legal and deserve to be set aside.
