Claim Depreciation on Road under BOT Scheme.

S. 32 : Depreciation -Owner assets– Road constructed by assessee on BOT basis - Eligible for

depreciation ,even though he is not legal owner of the road.

Assessee a Special Purpose Vehicle (SPV) was awarded contract by NHAI for widening, rehabilitation

and maintenance of existing two lane highways into a four lane one on BOT basis. Entire cost of

construction was borne by assesse, after completion of construction, highway was opened to traffic for

use and assessee started claiming depreciation. Disallowed depreciation holding that no ownership,

leasehold or tenancy rights were ever vested with assessee for roads, in respect of which it had claimed

depreciation. CIT(A) and honourable ITAT reversed the order of A.O. holding that assessee was entitled

for depreciation as, though NHAI remained legal owner of site with full powers to hold, dispose of and

deal with site; assessee had been granted not merely possession but also right to enjoyment of site and

NHAI was obliged to defend this right and assessee had power to exclude others. 'Owner' is a person who

is entitled to receive income from property in his own right, though a formal deed of title may not have

been executed. Assesseecompany entitled to claim depreciation u/s. 32. (AY. 2005-06 -2010-11)

Dy. CIT .v. SwarnaTollway (P.) Ltd.(2014) 150 ITD 26 (Hyd.)(Trib.)