Thiruvananthapuram Road Development Company Limited Vs. PCIT, Mumbai-6

Parties Involved

Facts Summary

The assessee company, Thiruvananthapuram Road Development Company Limited, is engaged in the business of developing, widening, strengthening, operating, constructing, and maintaining the Thiruvananthapuram City Roads Improvement Project (TCRIP) under an Annuity Concession Agreement dated 16 March 2004 entered into with the Government of Kerala. For Assessment Year 2020-21, the assessee filed its return of income declaring Nil income after claiming depreciation of ₹25,77,02,696/- on the project cost by treating the same as an intangible asset. The Assessing Officer (AO) completed the assessment under section 143(3) of the Income-tax Act, 1961 and accepted the returned income. However, the Learned Principal Commissioner of Income Tax (Ld. PCIT) observed that the AO had allowed depreciation without examining whether the assessee was the owner of the underlying road asset and set aside the assessment order with a direction to the AO to conduct fresh enquiries and reassess the income.…

Legal Issues

• 1. Whether the order passed by the Principal Commissioner of Income Tax under section 263 of the Act is without jurisdiction, bad in law, and void ab-initio.
• 2. Whether the Principal Commissioner of Income Tax erred in holding that the assessment order is erroneous and prejudicial to the interest of revenue on the issue of claim of depreciation.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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