Noida Toll Bridge Company Secures Rs 21,000 Crore Tax Relief On DND Flyover Operations

The demand, which spanned nine financial years from 2006 to 2015, included Rs 10,893 crore in alleged unpaid taxes and an equal amount in penalties

Noida Toll Bridge Company Limited (NTBCL), a subsidiary of the IL&FS Group and operator of the Delhi-Noida-Delhi (DND) flyover, has won a significant legal battle against the Income Tax department, with the Income Tax Appellate Tribunal (ITAT) quashing a tax demand of about Rs 21,000 crore, according to a report by ET.

The demand, which spanned nine financial years from 2006 to 2015, included Rs 10,893 crore in alleged unpaid taxes and an equal amount in penalties. The Income Tax department had accused NTBCL of concealing income and failing to accurately report its earnings.

The dispute began after the Income Tax department issued an assessment order on December 31, 2008, which led to a series of reassessment proceedings. These proceedings sought to disallow NTBCL's amortization of interest on zero-coupon bonds and taxed designated returns as income. Additionally, the department classified land provided by NOIDA/DDA on lease as a subsidy and disallowed depreciation on the DND Toll Bridge.

NTBCL contested the reassessment, challenging both the jurisdiction and the merit of the disallowances and additions made by the Income Tax department.

In a key ruling on August 8, 2023, the ITAT cancelled the reopening and enhancement of NTBCL’s tax assessments, providing relief for six out of the nine disputed financial years (FY06 to FY12), effectively wiping out Rs 16,000 crore in tax demands. This was followed by another victory for NTBCL on May 17, 2024, when the Tribunal overturned the penalty orders related to these years.

Finally, on August 20, 2024, the Tribunal ruled in favour of NTBCL for the remaining three years, settling the entire nine-year tax dispute. The penalties for these years were also dismissed on September 4, 2024.

The ITAT, in its ruling, noted: "Considering the fact that the Co-ordinate Bench of the Tribunal in the quantum Appeal deleted the additions made against the assesses, 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." This decision marks the end of a lengthy tax dispute, offering a major financial relief to NTBCL.