By Order Dated 06.03.2012, This Court Admitted Theaforesaid Tax Case Appeal On The Following Substantial Questionof Law v. Gvk Jaipur Expressway Ltd.,Reported In [(2018) 100 Taxmann.com (Sc) ], The Relevant Passageof Which, Is Usefully Extracted Hereunder

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 08.02.2022CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVANAND THE HON'BLE MR. JUSTICE J.SATHYA NARAYANA PRASAD T.C.A.NO.17 OF 2012 Commissioner of Income Tax-I,Chennai.... AppellantVersus M/s.L&T TransportationInfrastructure Limited,Post Box No.979,Mount Poonamallee Road,Manapakkam,Chennai – 603 089. ... Respondent Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Chennai, “A” Bench, dated 22.07.2011 in I.TA.No.1696/Mds/2010Assessment year 2007-2008. Prayer in T.C.A.17/2012:- Preferred against the order dated 30.07.2010 made inITA.No.567/09-10/A-III on the file of the Commissioner of IncomeTax (Appeals)-III, No.121, Mahatma Gandhi Road, Chennai-34, PANNo.AAACL1912F year of Assessment 2007-2008. And against the order dated 18.12.2009 on the file of theIncome Tax Officer, Company Ward II(1), Room No.515, New Block,No.121, M.G.Road, Chennai-34, GIR.No./PAN. andAssessment Year 2007-2008. For Appellant : Mr.Karthik Ranganathan,Senior Standing CounselFor Respondent :Mr.N.V.Balaji J U D G M E N T (Judgment of the Court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant /Revenue, challenging the order dated 22.07.2011 passed by theIncome Tax Appellate Tribunal, Bench 'A', Chennai, inI.TA.No.1696/Mds/2010, relating to the assessment year 2007-08. 2. By order dated 06.03.2012, this court admitted theaforesaid tax case appeal on the following substantial questionof law: “Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal was rightin holding that the assessee was entitled claimdepreciation at the rate of 10% applicable tobuildings on the roads and bridge developed andmaintained by the assessee under the terms of “Build,Operate and Transfer (BOT) agreement with theGovernment even though as per the terms of theagreement the assessee could not be considered as theowner of the assets?”. 3. When the matter was taken into consideration, thelearned counsel for the appellant/Revenue as well asrespondent/assessee jointly submitted that the substantialquestion of law involved in this appeal has already beenconsidered and decided in favour of the assessee, in the lightof the judgment of the Hon'ble Supreme Court in PrincipalCommissioner of Income Tax Vs. GVK Jaipur Expressway Ltd.,reported in [(2018) 100 taxmann.com (SC) ], the relevant passageof which, is usefully extracted hereunder: “14. In our opinion the term owned asoccurring in Section 32 (I) of the Income-taxAct, 1961 must be assigned a wider meaning. Anyone in possession of property in his own titleexercising such dominion over the property aswould enable other being excluded therefrom andhaving right to use and occupy the propertyand/or to enjoy its usufruct in his own rightwould be the owner of the buildings though aformal deed of title may not have been executedand registered as contemplated by Transfer ofProperty Act, Registration Act, etc. 'Buildingowned by the assessee' the expression asoccurring in Section 32(1) of the Income-tax Actmeans the person who having acquired possessionover the building in his own right uses the same for the purposes of the business or professionthough a legal title has not been conveyed tohim consistently with the requirements of lawssuch as Transfer of Property Act, andRegistration Act, etc. but nevertheless isentitled to hold the property to the exclusionof all others. 15. Generally speaking depreciation is anallowance for the diminution in the value due towear and tear of capital asset employed by anassessee in his business. Black's LawDictionary (Fifty Edn.) defines depreciation tomean, inter alia: for the purposes of the business or professionthough a legal title has not been conveyed tohim consistently with the requirements of lawssuch as Transfer of Property Act, andRegistration Act, etc. but nevertheless isentitled to hold the property to the exclusionof all others. 15. Generally speaking depreciation is anallowance for the diminution in the value due towear and tear of capital asset employed by anassessee in his business. Black's LawDictionary (Fifty Edn.) defines depreciation tomean, inter alia: A fall in value, reduction of worth. Thedeterioration or the loss or lessening in value,arising from age, use, and improvements, due tobetter methods. A decline in value of propertycaused by wear or obsolescence and is usuallymeasured by a set formula which reflects theseelements over a given period of useful life ofproperty.... Consistent gradual process ofestimating and allocating cost of capitalinvestments over estimated useful life of assetin order to match cost against earnings..... 19. It is well-settled that there cannot betwo owners of the property simultaneously and inthe same sense of the term. The intention ofthe Legislature in enacting Section 32 of theAct would be best fulfilled by allowingdeduction in respect of depreciation to theperson in whom for the time-being vests thedominion over the building and who is entitledto use it in hos own right and is using the samefor the purposes of his business or profession.Assigning any different meaning would notsubserve the legislative intent. To take thecase at hand it is the appellant-assessee whohaving paid part of the price, has been placedin possession of the houses as an owner and isusing the buildings for the purpose of itsbusiness in its own right. Still the assesseehas been denied the benefit of Section 32. Onthe other hand, the Housing Board would bedenied the benefit of Section 32 because inspiteof its being the legal owner it was not usingthe building for its business or profession. Wedo not think such a benefit-to-none situation could have been intended by the Legislature.The finding of fact arrived at in the case athand is that though a document of title was notexecuted by Housing Board in favour of theassessee, but the houses were allotted to theassessee by the Housing Board, part paymentreceived and possession delivered so as toconfer dominion over the property on theassessee whereafter the assessee had in its ownright allotted the quarters to the staff andthey were being actually used by the staff ofthe assessee. It is common knowledge, under thevarious scheme floated by bodies like housingboards, houses are constructed on large scaleand allotted on part payment to those who havebooked. Possession is also delivered to theallottee so as to enable enjoyment of theproperty. Execution of document transferringtitle necessarily follows if the schedule ofpayment is observed by allottee. If only theallottee may default the property may revertback to the Board. That is a matter onlybetween the Housing Board and the allottee. Nothird person intervenes. The part payment madeby allottee are with the intention of acquiringtitle. The delivery of possession by HousingBoard to allottee is also a step towardsconferring ownership. Documentation is delayedonly with the idea of compelling the allottee toobserve the schedule of payment.” 4. Following the aforesaid decision, wherein, it wascategorically held by the Hon'ble Supreme Court that “theassessee is entitled to claim depreciation of public roadstreating it as building”, we answer the substantial question oflaw raised herein against the appellant/Revenue and in favour ofthe respondent / assessee and accordingly, dismiss the tax caseappeal. No costs. Assistant Registrar //True Copy// vm/kas To 4. Following the aforesaid decision, wherein, it wascategorically held by the Hon'ble Supreme Court that “theassessee is entitled to claim depreciation of public roadstreating it as building”, we answer the substantial question oflaw raised herein against the appellant/Revenue and in favour ofthe respondent / assessee and accordingly, dismiss the tax caseappeal. No costs. Assistant Registrar //True Copy// vm/kas To 1. The Income Tax Appellate Tribunal, Chennai, “A” Bench.2. The Commissioner of Income Tax - I , Chennai.3. The Income Tax Officer, Company Circle II(4), Chennai 600 034. 4. The Income Tax Officer, Company Ward- II(1), Chennai. 5. The Commissioner of Income Tax(Appeals)-III, Chennai. +1cc to Mr.N.V.Balaji, Advocate, S.R.No.8730 T.C.A.No.17 of 2012 JPII(CO)PM/16/03/2022