The Appellant Has Raised The Following Substantialquestion Of Law In The Above Appeal v. M/S. L & Ttransportation Infrastructure Ltd., Chennai], Wherein Thisbench Held As Follows

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 20.07.2021 CORAM: THE HON'BLE MR.JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE R.HEMALATHA The Commissioner of Income Tax II, 121, Nungambakkam High Road,Chennai - 600 034. ... Appellant .vs. M/s.L & T Transportation Infrastructure Ltd.,PB No.979, Mount Poonamallee Road,Manapakkam, Chennai - 600 089PAN : AAA CL 1912 F ... Respondent PRAYER:- Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Chennai, "B" Bench, dated 20.02.2015 in I.T.A.No.2005/Mds/2014for the Assessment Year 2005-2006. Appeal against the Orderdated 19/02/2014 made in I.T.A.No.421/13-14 on the file of theCommissioner of Income Tax (Appeals)-II, Chennai & against theOrder dated 24/11/2010 made in PAN No. on the file ofthe Income Tax Officer, Company Ward II(1) Chennai for theassessment year 2005-2006. JUDGMENT (Judgment was delivered by M. DURAISWAMY, J.) Challenging the order passed in I.T.A.No.2005/Mds/2014 inrespect of the Assessment Year 2005-2006 on the file of theIncome Tax Appellate Tribunal, Chennai, "B" Bench (for brevity,the Tribunal), the Revenue has filed the above appeal. https://hcservices.ecourts.gov.in/hcservices/ 2. The assessee is engaged in the business of developmentof infrastructural facilities and developed a bye-pass roadbridge in Coimbatore. The assessee has claimed depreciation onroad/bridge. In the assessment order, the Assessing Officer hasheld that the assessee is not entitled for depreciation onroad/bridge, since the assessee itself amortized the cost of theroad/bridge over the construction period of 30/20 years anddenied the claim of the assessee. Challenging the order ofassessment, the assessee preferred an appeal before theCommissioner of Income Tax directed the Assessing OFficer toallow the claim of the assessee. Aggrieved over the same, theRevenue preferred an appeal before the Income Tax AppellateTribunal, and the Tribunal, dismissed the appeal. Challengingthe order passed by the Income Tax Appellate Tribunal, theRevenue has filed the above appeal. 3. The appellant has raised the following substantialquestion of law in the above appeal:- “Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding that theassessee was entitled claim depreciation at therate of 10% applicable to buildings on the roadsand bridge developed and maintained by theassessee under the terms of "Build, Operate andTransfer (BOT) agreement with the Government eventhough as per the terms of the agreement theassessee could not be considered as the owner ofthe assets?". 4. When the appeal is taken up for hearing, Mr.KarthikRanganathan, learned Senior Standing Counsel appearing for theappellant fairly submitted that the substantial question of lawthat arise for consideration in the above appeal has alreadybeen decided against the Revenue and in favour of the Assesseein the Judgment dated 29.06.2021 made in TC.A. Nos.355 to 358 of2011 [Commissioner of Income Tax-I, Chennai. v. M/s. L & TTransportation Infrastructure Ltd., Chennai], wherein thisBench held as follows:- "......... 3. Heard Mr.Karthik Ranganathan,learned Standing Senior Counsel for the appellantand Mr.V. Balaji, learned counsel for therespondent. 4. Both the counsels contended that theHon'ble Supreme Court in the decision inPrincipal Commissioner of Income Tax Vs. GVKJaipur Expressway Ltd., reported in [2018] 100 taxmann.com 96 (SC) has settled the presentsubstantial question of law in favour of theassessee. The relevant portions of the decisionof the Hon'ble Supreme Court is extractedhereunder. "......... 3. Heard Mr.Karthik Ranganathan,learned Standing Senior Counsel for the appellantand Mr.V. Balaji, learned counsel for therespondent. 4. Both the counsels contended that theHon'ble Supreme Court in the decision inPrincipal Commissioner of Income Tax Vs. GVKJaipur Expressway Ltd., reported in [2018] 100 taxmann.com 96 (SC) has settled the presentsubstantial question of law in favour of theassessee. The relevant portions of the decisionof the Hon'ble Supreme Court is extractedhereunder. "14. In our opinion, the term ownedas occurring in Section 32 (1) of theIncome-tax Act, 1961 must be assigned awider meaning. Any one in possession ofproperty in his own title exercising suchdominion over the property as would enableother being excluded therefrom and havingright to use and occupy the property and/orto enjoy its usufruct in his own rightwould be the owner of the buildings thougha formal deed of title may not have beenexecuted and registered as contemplated byTransfer of Property Act, Registration Act,etc. 'Building owned by the assessee' theexpression as occurring in Section 32(1) ofthe Income-tax Act means the person whohaving acquired possession over thebuilding in his own right uses the same forthe purposes of the business or professionthough a legal title has not been conveyedto him consistently with the requirementsof laws such as Transfer of Property Act,and Registration Act, etc. but neverthelessis entitled to hold the property to theexclusion of all others. 15. Generally speaking depreciationis an allowance for the diminution in thevalue due to wear and tear of capitalasset employed by an assessee in hisbusiness. Black's Law Distionary (FiftyEdn.) defines depreciation to mean, interalia: A fall in value, reduction ofworth. The deterioration or the lossor lessening in value, arising fromage, use, and improvements, due tobetter methods. A decline in valueof property caused by wear orobsolescence and is usually measuredby a set formula which reflectsthese elements over a given periodof useful life of property.... Consistent gradual process ofestimating and allocating cost ofcapital investments over estimateduseful life of asset in order tomatchcostagainstearnings............ 15. Generally speaking depreciationis an allowance for the diminution in thevalue due to wear and tear of capitalasset employed by an assessee in hisbusiness. Black's Law Distionary (FiftyEdn.) defines depreciation to mean, interalia: A fall in value, reduction ofworth. The deterioration or the lossor lessening in value, arising fromage, use, and improvements, due tobetter methods. A decline in valueof property caused by wear orobsolescence and is usually measuredby a set formula which reflectsthese elements over a given periodof useful life of property.... Consistent gradual process ofestimating and allocating cost ofcapital investments over estimateduseful life of asset in order tomatchcostagainstearnings............ 19. It is well-settled that therecannot be two owners of the propertysimultaneously and int he same sense ofthe term. The intention of theLegislature in enacting Section 32 of theAct would be best fulfilled by allowingdeduction in respect of depreciation tothe person in whom for the time-beingvests the dominion over the building andwho is entitled to use it in his own rightand is using the same for the purposes ofhis business or profession. Assigning anydifferent meaning would not subserve thelegislative intent. To take the case athand it is the appellant-assessee whohaving paid part of the price, has beenplaced in possession of the houses as anowner and is using the buildings for thepurpose of its business in its own right.Still the assessee has been denied thebenefit of Section 32. On the other hand,the Housing Board would be denied thebenefit of Section 32 because inspite ofits being the legal owner it was not usingthe building for its business orprofession. We do not think such abenefit-to-none situation could have beenintended by the Legislature. The findingof fact arrived at in the case at hand isthat though a document of title was notexecuted by Housing Board in favour of theassessee, but the houses were allotted tothe assessee by the Housing Board, partpayment received and possession deliveredso as to confer dominion over the propertyon the assessee whereafter the assesseehad in its own right allotted thequarters to the staff and they were beingactually used by the staff of theassessee. It is common knowledge, underthe various scheme floated by bodies likehousing boards, houses are constructed onlarge scale and allotted on part payment to those who have booked. Possession isalso delivered to the allottee so as toenable enjoyment of the property.Execution of document transferring titlenecessarily follows if the schedule ofpayment is observed by allottee. If onlythe allottee may default the property mayrevert back to the Board. That is a matteronly between the Housing Board and theallottee. No third person intervenes. thepart payment made by allottee are with theintention of acquiring title. the deliveryof possession by Housing Board to allotteeis also a step towards conferringownership. Documentation is delayed onlywith the idea of compelling the allotteeto observe the schedule of payment." 5. After discussing the various decisions,the Hon'ble Supreme Court clearly held that theassessee is entitled to claim depreciation ofpublicroads,treatingthesameasbuilding. .........." 5. Mr.N.V.Balaji, learned counsel appearing for therespondent submitted that in view of the ratio laid down by theDivision Bench of this Court in T.C.A. Nos.355 to 358 of 2011[cited supra], the appeal may be dismissed. 6. Having regard to the submissions made by the learnedcounsel on either side, following the ratio laid down in theJudgment dated 29.06.2021 made in T.C.A. Nos.355 to 358 of 2011[cited supra], the question of law is decided against theRevenue and in favour of the assessee. Accordingly, the Tax CaseAppeal is dismissed. No costs. //True Copy// 5. After discussing the various decisions,the Hon'ble Supreme Court clearly held that theassessee is entitled to claim depreciation ofpublicroads,treatingthesameasbuilding. .........." 5. Mr.N.V.Balaji, learned counsel appearing for therespondent submitted that in view of the ratio laid down by theDivision Bench of this Court in T.C.A. Nos.355 to 358 of 2011[cited supra], the appeal may be dismissed. 6. Having regard to the submissions made by the learnedcounsel on either side, following the ratio laid down in theJudgment dated 29.06.2021 made in T.C.A. Nos.355 to 358 of 2011[cited supra], the question of law is decided against theRevenue and in favour of the assessee. Accordingly, the Tax CaseAppeal is dismissed. No costs. //True Copy// Sub Assistant Registrar 1. The Income Tax Appellate Tribunal, Chennai,"B" Bench. Chennai,"B" Bench. https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Income Tax (Appeals)-II, Chennai.3. The Income Tax Officer, Compay Ward II(1), Chennai. +1cc to Mr.N.V.Balaji, Advocate, S.R.No.35184 T.C.A.NO.566 OF 2016 CP(CO)PBS/06/08/2021