09/19/2024

DND FLYOVER OPERATOR NOIDA TOLL BRIDGE COMPANY GETS MASSIVE ₹21,000 CRORE TAX RELIEF

The Income Tax Appellate Tribunal has quashed a tax demand of around ?21,000 crore against Noida Toll Bridge Company Limited (NTBCL). The tax claims, which spanned nine financial years, included alleged unpaid taxes and penalties.

NTBCL, which operates the Delhi-Noida-Delhi (DND) flyover, contested the claims, questioning the jurisdiction of the reassessment notices. The Tribunal's decision marks a significant win for the company, which is part of the IL&FS Group.

The tax demand covered financial years 2006 to 2015 and included ?10,893 crore in alleged unpaid taxes and an equal amount in penalties. The Income Tax department had accused NTBCL of concealing income and not submitting accurate financial details.

The assessment order was first issued on December 31, 2008, followed by reassessment proceedings. These proceedings disallowed the amortization of interest on zero-coupon bonds, taxed designated returns as income, classified leased land as a subsidy, and disallowed depreciation on the DND Toll Bridge. NTBCL challenged both the jurisdiction and merits of these claims.

In its ruling on August 8, 2023, the Tribunal cancelled the reopening and enhancement of tax assessments for six out of nine assessment years (FY 2006 to FY 2012), resulting in the removal of approximately ?16,000 crore in tax demands. The penalty orders were also overturned on May 17, 2024.

On August 20, 2024, the Tribunal granted relief for the remaining three years, and the penalties for these years were dismissed on September 4, 2024.

“Considering the fact that the Co-ordinate Bench of the Tribunal in the quantum Appeal deleted the additions made against the assessee, the order of the penalty proceedings being consequential to the said additions will not sustain. Accordingly, the impugned orders of the penalty are hereby quashed,” the ITAT stated in its order.

“With this order, the complete demand and penalty of approximately ?21,000 crore has been fully addressed in favor of the company,” said an NTBCL spokesperson.

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