Rs 16,000 Crore Tax Relief Granted to DND Flyway Builder by ITAT
ROADS & HIGHWAYS

Rs 16,000 Crore Tax Relief Granted to DND Flyway Builder by ITAT

The Income Tax Appellate Tribunal (ITAT) has granted relief of Rs 160 billion to the troubled IL&FS subsidiary, Noida Toll Bridge Company, which operates the Delhi-Noida Direct Flyway. This relief stems from the dismissal of the tax department's efforts to increase the assessment, justify additional charges, and reopen the evaluation.

The original demand amounted to Rs 79.83 billion, accompanied by an equivalent sum in penalties, spanning the assessment years 2006-07 to 2011-12. While the initial assessment was issued on December 31, 2008, the decision to initiate reevaluation proceedings, aimed at disallowing the amortization of interest on zero coupon bonds, occurred on March 28, 2013. The tribunal noted that this action took place "beyond four years" and stated that the issue of interest amortization had already been settled in favor of the company for assessment year 2004-05.

Noida Toll Bridge Company also contested the commissioner of income tax's heightened assessment on three grounds: an outstanding designated return (approximately Rs 180 crore), the treatment of leased land as revenue subsidy (Rs 17.3 billion), and the disallowance of depreciation (around Rs 160 million).

The tribunal determined that the commissioner (appeals) lacked the authority to "introduce a new income source" when the assessing officer had not evaluated any income. It pointed out that the three issues raised by the commissioner (appeals) were never considered by the assessing officer and were not part of the income return. Therefore, the tribunal deemed this enhancement legally flawed.

Furthermore, the tribunal rejected the commissioner (appeals)'s rationale for boosting the assessment. The commissioner had asserted that the company was entitled to a 20% return from the government, based on an accountant's report. Dismissing this, the tribunal emphasized that the certificate did not grant the company a 20% return on project costs. It clarified that the commissioner (appeals) misunderstood the arrangement between Noida and IL&FS and dismissed the Rs 180 crore addition.

The commissioner (appeals) also increased the assessment by Rs 17.3 billlion, contending that the land was transferred to Noida Toll Bridge Company without any consideration for commercial exploitation, a fact undisclosed in the books. The tribunal ruled against this, stating that the lands were leased and ownership transfer did not occur, thus negating the addition.

Lastly, the tribunal rejected the disallowance of depreciation, as it concluded that no capital subsidy was involved, since a portion of the land owned by the company was treated as a capital receipt.

See also:
Delhi High Court orders NHAI to pay Rs 12.04 bn to R-Infra's Subsidiary
Mumbai Tribunal approves Streamline Industries' acquisition

The Income Tax Appellate Tribunal (ITAT) has granted relief of Rs 160 billion to the troubled IL&FS subsidiary, Noida Toll Bridge Company, which operates the Delhi-Noida Direct Flyway. This relief stems from the dismissal of the tax department's efforts to increase the assessment, justify additional charges, and reopen the evaluation. The original demand amounted to Rs 79.83 billion, accompanied by an equivalent sum in penalties, spanning the assessment years 2006-07 to 2011-12. While the initial assessment was issued on December 31, 2008, the decision to initiate reevaluation proceedings, aimed at disallowing the amortization of interest on zero coupon bonds, occurred on March 28, 2013. The tribunal noted that this action took place beyond four years and stated that the issue of interest amortization had already been settled in favor of the company for assessment year 2004-05. Noida Toll Bridge Company also contested the commissioner of income tax's heightened assessment on three grounds: an outstanding designated return (approximately Rs 180 crore), the treatment of leased land as revenue subsidy (Rs 17.3 billion), and the disallowance of depreciation (around Rs 160 million). The tribunal determined that the commissioner (appeals) lacked the authority to introduce a new income source when the assessing officer had not evaluated any income. It pointed out that the three issues raised by the commissioner (appeals) were never considered by the assessing officer and were not part of the income return. Therefore, the tribunal deemed this enhancement legally flawed. Furthermore, the tribunal rejected the commissioner (appeals)'s rationale for boosting the assessment. The commissioner had asserted that the company was entitled to a 20% return from the government, based on an accountant's report. Dismissing this, the tribunal emphasized that the certificate did not grant the company a 20% return on project costs. It clarified that the commissioner (appeals) misunderstood the arrangement between Noida and IL&FS and dismissed the Rs 180 crore addition. The commissioner (appeals) also increased the assessment by Rs 17.3 billlion, contending that the land was transferred to Noida Toll Bridge Company without any consideration for commercial exploitation, a fact undisclosed in the books. The tribunal ruled against this, stating that the lands were leased and ownership transfer did not occur, thus negating the addition. Lastly, the tribunal rejected the disallowance of depreciation, as it concluded that no capital subsidy was involved, since a portion of the land owned by the company was treated as a capital receipt. See also: Delhi High Court orders NHAI to pay Rs 12.04 bn to R-Infra's SubsidiaryMumbai Tribunal approves Streamline Industries' acquisition

Next Story
Infrastructure Urban

Coal Ministry Achieves Milestones under Special Campaign 5.0

The Ministry of Coal and its Public Sector Undertakings (PSUs) have achieved notable milestones under the Special Campaign 5.0, focusing on cleanliness, operational efficiency, and sustainability across the coal sector. During the implementation phase from 2–31 October 2025, over 1,205 sites were cleaned, covering 68,04,087 sq ft, nearing the target of 82,51,511 sq ft. Scrap disposal of 5,813 MT against a target of 8,678 MT generated Rs 228.7 million in revenue. In addition, 1,11,248 physical and 30,331 electronic files were reviewed, with 74,123 weeded out or closed. Key initiatives showc..

Next Story
Infrastructure Energy

Vesting Orders Issued for Three Coal Blocks under Commercial Auctions

The Ministry of Coal’s Nominated Authority has issued vesting orders for three coal blocks under commercial coal block auctions on 23 October 2025. The Coal Mine Development and Production Agreements (CMDPAs) for these mines were earlier signed on 21 August 2025. The three blocks include Rajgamar Dipside (Deavnara), Tangardihi North, and Mahuagarhi. Of these, two are partially explored while one is fully explored, with a combined peak rated capacity of around 1 MTPA and geological reserves of approximately 1,484.41 million tonnes. These mines are expected to generate annual revenue of abou..

Next Story
Infrastructure Urban

TEC, IIT-Hyderabad Partner to Boost 6G and Telecom Standards

The Telecommunication Engineering Centre (TEC), technical arm of the Department of Telecommunications (DoT), has signed a Memorandum of Understanding (MoU) with the Indian Institute of Technology Hyderabad (IIT Hyderabad) for joint research and technical collaboration in advanced telecom technologies and standardisation. The partnership focuses on developing India-specific standards and test frameworks for next-generation networks, including 6G, Artificial Intelligence (AI), and Non-Terrestrial Networks (NTNs). It also aims to enhance India’s participation in international standardisation f..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?