Patna Bakhtiyarpur Tollway Limited Vs ACIT (ITAT Hyderabad)
ITAT Hyderabad held that in the present case immovable asset belongs to the NHAI and the assessee was merely a licensee for the limited purpose of claiming depreciation. Thus, since assessee is not the owner of the structure it is not entitled to any depreciation within the meaning of section 32 of Income Tax the Act.
Facts- The assessee is into development and construction of a project. The case was selected for scrutiny and AO issued notices u/s 142(1) and 143(2) of the Act, calling for certain details. AO disallowed the depreciation on the intangible asset amounting to Rs.162,48,67,242/-and has only restricted to the amortization of Rs.58,16,55,020/-. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that in the present case as is clear from the terms of the concessional agreement, the immovable asset belongs to the NHAI and the assessee was merely a licensee for the limited purpose of claiming depreciation. In our view, it is necessary that the assessee should be owner of the property and owner of the building machinery, plant or furniture, either wholly owned by it or partially owned by it and is used for business purpose. In the present case the infrastructure is not either owned wholly or partially by the assessee. Merely the assessee has raised some construction with the permission of the licensor as a licensee. As per section 52 of Indian Easements Act, 1882, if the construction is in the nature of permanent and is erected with the permission of the licensor then the assessee would not become owner of the structure. In view of the above, we are of the considered opinion that the assessee is not the owner of the structure and is not entitled to any depreciation within the meaning of section 32 of the Act.
