The Income Tax Appellate Tribunal, Pune Bench, has recently, in an appeal filed before it, held that the right to collect toll falls within the definition of commercial rights or intangible asset, and hence that the same is eligible for depreciation.
The aforesaid observation was made by the Tribunal, when an appeal was preferred before it by the Revenue, for Assessment Year 2017-18, as against the Commissioner of Income Tax(Appeal), Pune12’s order dated 28.02.2021, in proceedings u/s.250 of the Income Tax Act, 1961.
The Revenue’s sole substantive grievance raised in the appeal being the correctness of the CIT(A)’s action reversing assessment findings dated 21.12.2019 which disallowed the assessee’s depreciation claim amounting to Rs.3,47,61,85,194, /- pertaining to its right to collect toll as an intangible asset under section 32(1)(ii) of the Income Tax Act, the ITAT Bench consisting of Inturi Rama Rao, the Accountant Member and S.S.Godara , the Judicial Member, observed as follows :
“We have given our thoughtful consideration to vehement rival contentions and find no merit in the Revenue’s stand. A perusal of the case file (pages 42 to 45) indicates that the very issue had arisen between these parties in Revenue’s appeals ITA No’s.157, 187 & 188/PUN/2018 for AY’s 2014-15 & 2015-16, which stand adjudicated against the department”
“The Revenue is fair enough in its pleadings in not pin-pointing any distinction of facts or law in all these assessment years so far as the assessee’s treatment of its right to collect toll as an intangible asset under section 32(1)(ii), is concerned”, the ITAT Bench added.
Thus dismissing the Revenues appeal, the Pune ITAT ruled:
“Faced with this situation, we affirm the CIT(A)’s findings under challenge.”
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