Income Tax Officer, Bangalore V. M/s Fibres and Fabrics International Private Limited, Bangalore

ITA 105/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7041 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR ACIT
• Keywords: Depreciation
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE S HRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI JASON P BOAZ , ACCOUNTANT MEMBER I.T . A. NO S . 105 & 106 /BANG/20 17 (ASSESSMENT YEAR S : 20 06 - 07 & 2007 - 08 ) INCOME TAX OFFICER, WARD 3(1)( 1), BANGALORE. . APPELLANT. VS. M/S. FIBRES & FABRICS INTERNATIONAL PVT. LTD., NO.21, E1, II PHASE, INDL. AREA, PEENYA, BANGALORE - 560 058 . .. RESPONDENT. APPELLANT BY : DR. P.V. PRADEEP KUMAR, ACIT (D.R) R E SPONDENT BY : SHRI NAGESHWAR RAO, ADVOCATE. DATE OF H EARING : 21.12.2017. DATE OF P RONOUNCEMENT : 22 .12 .201 7 . O R D E R PER SHRI JASON P BOAZ, A .M . : TH E S E TWO APPEAL S BY REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 , BANGALORE DT. 31.10.2016 FOR THE A SSESSMENT YEAR S 20 06 - 07 & 2007 - 08. 2. BRIEFLY STATED, THE FACTS OF THE CASE RELEVANT FOR DISPOSAL OF THESE APPEALS ARE AS UNDER : - 2.1 THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFACTURE AND EXPORT OF READYMADE GARMENTS. THE PRE SENT ORDERS OF ASSESSMENT FOR 2 IT A NO S . 105 & 106 /BANG/201 7 ASSESSMENT YEARS 2006 - 07 & 2007 - 08 WERE COMPLETED UNDER SECTION 143(3) R.W.S. 263 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') VIDE ORDERS DT.30.08.2013, WHEREIN THE ONLY DISALLOWANCE MADE WAS IN RESPECT OF THE ASSESSEE'S CLAIM FOR DEPRECIATION ON GOODWILL FOR BOTH ASSESSMENT YEARS. AGGRIEVED BY THE AFORESAID ORDERS OF ASSESSMENT FOR ASSESSMENT YEARS 2006 - 07 & 2007 - 08, THE ASSESSEE FILED APPEALS BEFORE THE CIT (APPEALS) - 3, BANGALORE, WHO VIDE THE IMPUGNED ORDERS DT.30.10 .2016 ALLOWED THE ASSESSEE'S APPEAL ON THE SOLE ISSUE RAISED I.E. CLAIM OF DEPRECIATION ON GOODWILL. IN DOING SO, THE LEARNED CIT (APPEALS) FOLLOWED THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEARS 20 08 - 09 & 2009 - 10 IN ITA NOS.918 & 919/BANG/2013 WH I CH HAD TAKEN INTO ACCOUNT AND FOLLOWED , INTER ALIA, THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF SMIFFS SECURITY LTD. REPORTED IN 348 ITR 362 (SC). 3.1 REVENUE, BEING AGGRIEVED BY THE ORDERS O F THE CIT (APPEALS) FOR ASSESSMENT YEARS 2006 - 07 & 2007 - 08, HAS FILED THESE TWO APPEALS BEFORE THE TRIBUNAL WHEREIN IT HAS RAISED THE FOLLOWING IDENTICAL GROUNDS : 3 IT A NO S . 105 & 106 /BANG/201 7 3.2 THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE WAS HEARD IN SUPPORT OF T HE GROUNDS RAISED (SUPRA) AND FILED SUBMISSIONS. 3. 3 PER CONTRA, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ISSUE OF THE ASSESSEE'S CLAIM OF DEPRECIATION ON GOODWILL HAS BEEN CONSIDERED AND HELD IN FAVOUR OF THE ASSESSE E BY A CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEARS 2008 - 09 & 2009 - 10 IN ITA NOS.918 & 919/BANG/2013. IN VIEW OF THE ABOVE, IT WAS PRAYED THAT THE IMPUGNED ORDERS OF THE LEARNED CIT (APPEALS) ON THIS ISSUE BE UPHELD AND REVENUE S APPEAL S BE DISMISSED. 3.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THE ONLY ISSUE FOR CONSIDERATION AND ADJUDICATION BEFORE US IN THESE TWO APPEALS FOR ASSESSMENT YEARS 2006 - 07 & 2007 - 08 IS WITH REGARD TO THE ALLOWABILITY OR OTHERWISE OF THE ASSESSEE'S CLAIMS FOR DEPRECIATION ON GOODWILL. WE FIND THAT THIS VERY ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN ASSE SSEE'S OWN CASE FOR ASSESSMENT YEARS 2008 - 09 & 2009 - 10 IN ITA NOS.918 & 919/BANG/2013; BY FOLLOWING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. SMIFFS SECURITY LTD. (SUPRA) AND THAT OF THE HON'BLE KARNATAKA HIGH COURT IN THE 4 IT A NO S . 105 & 106 /BANG/201 7 CASE OF CIT V S. MANIPAL UNIVERSAL LEARNING (P) LTD. IN ITA NO.61 OF 2007 DT.1.4.2013 . NO CONTRARY DECISION OF THE HON'BLE APEX COURT ON THIS ISSUE WAS PLACED BEFORE US BY REVENUE. IN ITS ORDER IN ITA NOS.918 & 919/BANG/2013 IN ASSESSEE'S OWN CASE FOR ASSESSMENT YE ARS 2008 - 09 & 2009 - 10, THE CO - ORDINATE BENCH OF THIS TRIBUNAL HELD AS UNDER AT PARAS 20 & 26 THEREOF : 5 IT A NO S . 105 & 106 /BANG/201 7 3.3.2 RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. SMIFFS SECURITY LTD. (SUPRA), THE HON'BLE HIGH COUR TS REFERRED TO (SUPRA) AND THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEARS 2008 - 09 & 2009 - 10 (SUPRA), WE HOLD THAT THE ASSESSEE IN THE CASE ON HAND IS ENTITLED TO BE ALLOWED DEPRECIATION ON GOODWILL. IN THIS VIEW OF THE MATTER, WE UPHOLD THE IMPUGNED ORDERS OF THE CIT (APPEALS) FOR THE TWO CONCERNED ASSESSMENT YEARS AND DIRECT THE ASSESSING OFFICER TO ALLOW THE ASSESSEE'S CLAIM OF DEPRECIATION ON GOODWILL. CONSEQUENTLY, THE GROUND S NOS.1 TO 7 RAISED BY REVENUE ARE DISMISSED. 4. IN THE RESULT, REVENUE S APPEALS FOR ASSESSMENT YEARS 2008 - 09 & 2009 - 10 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 22ND DAY OF DEC., 201 7 . SD/ - ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER SD/ - ( JASON P BOAZ ) JUDICIAL MEMBER BANGALORE, DT. 22 .12.2017. *REDDY GP