Amortization on berthing wharf owned by Port Trust
Facts:
Assessee
had an agreement with Vizag port trust where they would construct and operate
the vessel berthing/wharfage infrastructure on Build Operate and Transfer basis
(BOT) for a after using and maintaining it for a period of 30 years. It was the
case of the revenue that the assessee is never the owner of the berth/wharf and
accordingly depreciation on the same was denied to the assessee by
reopening the case of the assessee. On further appeal -
Held
in favour of the assessee that they were entitled to amortize the cost of the
wharf/berth over a period of 30 years. CBDT circular no. 09/2014 dt. 23-04-2014
will need to be read retrospectively as it is a beneficial circular.
Applied:
Madras Auto Services Limited reported in (1998) 233 ITR 468
(SC) : 1998 TaxPub(DT) 1407 (SC)
CBDT
Circular No. 09/2014 dt. 23-04-2014
7.
In the case where an assessee has claimed any deduction out of initial cost of
development of infrastructure facility of roads/highways under BOT projects in
earlier years, the total deduction so claimed for the Assessment Years prior to
the Assessment Year under consideration may be deducted from the initial cost
of infrastructure facility of roads/highways and the cost so reduced shall be
amortized equally over the remaining period of toll concessionaire agreement.
Case: Vizag Seaport (P) Ltd. v. Asstt. CIT 2023 TaxPub(DT) 4383 (Viz-Trib)