Tax Relief: DND Flyway builder gets Rs 16k cr tax relief

NEW DELHI: The Revenue Tax Appellate Tribunal (ITAT) has given a Rs 16,000-crore aid to the beleaguered IL&FS arm Noida Toll Bridge Firm – the particular objective car that constructed and runs the Delhi-Noida Direct Flyway – dismissing the enhancement, deserves of addition and reopening of the evaluation by the tax division.

The demand of Rs 7,983 crore, and an equal quantity of penalty, pertained to evaluation years 2006-07 to 2011-12. Whereas the unique evaluation order was issued on December 31, 2008, reassessment proceedings to disallow amortisation of curiosity on zero coupon bonds have been initiated on March 28, 2013, which the tribunal stated occurred “past 4 years”. It stated that for evaluation yr 2004-05, the problem of amortisation of curiosity was determined in favour of the corporate.

Capture 5

Noida Toll Bridge Firm had additionally challenged the enhancement of the evaluation by the commissioner of earnings tax on three counts – arrear of designated return (round Rs 180 crore), lease of land handled as income subsidy (Rs 1,730 crore) and disallowance of depreciation (round Rs 16 crore). The tribunal concluded that the commissioner (appeals) can not “make an enhancement by exploring a brand new supply of earnings” if the assessing officer has not assessed any earnings.
“… the assessing officer has by no means thought-about the three points talked about herein on which the CIA(A) has made enhancement, nor have been they part of the return of earnings. Due to this fact, in our thought-about view, the enhancement is dangerous in legislation,” the tribunal stated in an order.
It then went on to dismiss the idea on which the commissioner (appeals) enhanced the evaluation. The commissioner held that the corporate was entitled to a return of 20% from the federal government, which was primarily based on a report by the chartered accountant. Noting that the certificates doesn’t entitle the corporate to a return of 20% of the venture price, the tribunal famous that the commissioner (appeals) had “utterly misunderstood the whole association” between Noida and IL&FS and dismissed the addition of Rs 180 crore.
The commissioner (appeals) had additionally enhanced the evaluation by Rs 1,730 crore by concluding that the land was transferred to the Noida Toll Bridge Firm as a right to commercially exploit and this was not disclosed within the books. After arriving on the market worth of the land, the remaining quantity was taken to be compensation for a potential shortfall in income and handled as income subsidy for which the enhancement was made. “The lands got on lease and, due to this fact, there isn’t any query of possession being transferred to the assessee and due to this fact, there isn’t any query of any addition on this account,” the tribunal dominated.
It additionally dismissed the disallowance of depreciation, concluding that no capital subsidy is concerned since part of the land with the corporate was handled as capital receipt.

Source Link

Spread the love

Leave a Reply