Deputy Commissioner of Income-tax, V. M/s. Johnson Matthey Chemicals (I) Pvt. Ltd., Raigad

ITA 1669/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1625 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O A MAO
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1669 /P U N/20 16 / ASSESSMENT YEAR : 20 07 - 08 THE DY. COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, NEW PANVEL . / APPELLANT VS. M/S. JOHNSON MATTHEY CHEMICALS (I) PVT. LTD., PLOT NO.6, MIDC INDUSTRIAL ESTATE, TALOJA, DIST. RAIGAD 410208 . / RESPONDENT A PPELLANT BY : SHRI O.A. MAO RE SPONDENT BY : SHRI RAJENDRA AGIWAL / DATE OF HEARING : 2 8 . 0 8 .201 8 / DATE OF PRONOUNCEMENT: 30 . 0 8 .201 8 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE REVENUE IS AGAINST ORDER OF CIT(A) - 2 , AURANGABAD , DATED 02.05.2016 RELATING TO ASSESSMENT YEAR 20 07 - 08 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT GROUNDS OF APPEAL RAISED BY THE REVENUE DO NOT ARISE FROM THE ORDER OF CIT(A) AS THE SAID ORDER WAS AGAINST ASSESSMENT ORDER PASSED UNDER 2 ITA NO. 1669 /PUN/20 16 M/S. JOHNSON MATTHEY CHEMICALS (I) PVT. LTD. SECTION 143(3) OF THE ACT, WHERE AS THE GROUNDS OF APPEAL RELATE TO THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE ACT WHICH WAS PASSED LATER ON. HE FURTHER POINTED OUT THAT IN ANY CASE THE ISSUES RAISED IN THE PRESENT APPEAL HAVE BEEN DECIDED BY THE CIT(A) IN TURN RE LYING ON THE ORDER OF TRIBUNAL RELATING TO ASSESSMENT YEAR 2003 - 04 AND THERE IS NO MERIT IN THE APPEAL OF REVENUE. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY ADMITTED THAT THERE WAS SOME MISMATCH IN THE GROUNDS OF APPEAL AND THE ASSESSMENT ORDER FILED. HE STRESSED THAT AN OPPORTUNITY MAY BE GIVEN TO AMEND THE GROUNDS OF APPEAL AND TO FURNISH THE DO CUMENTS. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE OTHER HAND, PLACED ON RECORD THE COPY OF ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT AND POINTED OUT THAT THE APPEAL AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE ACT WAS PENDING BEFORE THE CIT(A). HE ALSO PLACED ON RECORD THE COPIES OF ORDERS OF TRIBUNAL FOR ASSESSMENT YEARS 2003 - 04 TO 2006 - 07, 2008 - 09 AND 2009 - 10, WHEREIN THE ISSUE OF DEPRECIATION ON GOODWILL HAS BEEN DECIDED FROM YEAR TO YEAR IN FAVOUR O F ASSESSEE. HE ALSO POINTED OUT THAT THE TRIBUNAL IN ITA NO.4368/M/2011, RELATING TO ASSESSMENT YEAR 2007 - 08, VIDE ORDER DATED 24.07.2018 HAS ALSO QUASHED 263 ORDER PASSED BY THE COMMISSIONER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD . THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT. THE PERUSAL OF APPELLATE ORDER REFLECTS THAT AT PAGE 1, 3 ITA NO. 1669 /PUN/20 16 M/S. JOHNSON MATTHEY CHEMICALS (I) PVT. LTD. THE CIT(A) REFERS TO THE ORDER OF ASSESSING OFFICER UNDER SECTION 143(3) OF TH E ACT, DATED 24.12.2009, RELATING TO ASSESSMENT YEAR 2007 - 08. THE CIT(A) VIDE PARA 5 DEALS WITH THE ISSUE OF DEPRECIATION ON GOODWILL ON THE GROUND THAT GOODWILL WAS NOT IN THE NATURE OF ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE AS STATED IN THE DEFINITION OF INTANGIBLE ASSETS UNDER SECTION 32(1)(II) OF THE ACT. THE SECOND GROUND OF APPEAL RAISED WAS IN RESPECT OF DEPRECIATION CLAIMED ON NON - COMPETE FEES PAID. THE CIT(A) REFERRED TO THE DECISION OF THE PUNE BENCH OF TRIBUNAL IN ITA NO. 7574/BN/2010, DATED 01.01.2016, WHEREIN THE TRIBUNAL HAS DECIDED THAT NON - COMPETE PAYMENT IS ELIGIBLE FOR DEPRECIATION UNDER SECTION 32(1)(II) OF THE ACT. IN RESPECT OF SECOND ISSUE, THE TRIBUNAL HELD THAT IN VIEW OF THE LAW LAID DOWN BY THE HON'BLE SUPRE ME COURT WITH RESPECT TO CLAIM OF DEPRECIATION ON GOODWILL , THE SAID CLAIM IS TO BE ALLOWED TO THE ASSESSEE. THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE. 6. THE REVENUE IS AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) AND THE SAID FACTS ARE MENTIONED IN THE ST ATEMENT OF FACTS ALSO. HOWEVER, BY AN ERROR, GROUNDS OF APPEAL WHICH HAVE BEEN RAISED ARE NOT IN LINE WITH THE DECISION OF THE CIT(A). BY AN ERROR, THE GROUNDS OF APPEAL HAVE BEEN RAISED WHICH EMANATE FROM THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 263 OF THE ACT BUT THE ERROR ARISING IN THE PRESENT APPEAL IS NOT SO GRAVE, SINCE THE ISSUE WHICH HAS BEEN DECIDED BY THE CIT(A) HAS ALREADY BEEN DECIDED BY THE TRIBUNAL. THE TRIBUNAL HAD DECIDED THE ISSUE RELATING TO ASSESSMENT YEAR 2003 - 04 VIDE ORDER DATED 01.01.2016 , WHICH HAS LATER BEEN FOLLOWED IN CONSOLIDATED ORDER FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 AND THEREAFTER IN CONSOLIDATED ORDER RELATING TO ASSESSMENT YEARS 2006 - 07, 2008 - 09 AND 2009 - 10. HENCE, THE ISSUE STANDS DECIDED IN FAVOUR OF ASSESSEE AND THE ORDER OF CIT(A) IN ALLOWING THE CLAIM 4 ITA NO. 1669 /PUN/20 16 M/S. JOHNSON MATTHEY CHEMICALS (I) PVT. LTD. MERITS TO BE UPHELD. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT AN OPPORTUNITY BE ALLOWED TO AMEND THE GROUNDS OF APPEAL . HOWEVER, IN VIEW OF THE ISSUE BEING SETTLED IN FAVOUR OF A SSESSEE, THERE IS NO SCOPE IN THE PLEA OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AS WE ARE DECIDING THE ISSUE FOLLOWING THE EARLIER ORDERS OF TRIBUNAL. UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE APPEAL FILED BY THE REVENUE. 7 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 3 0 T H D AY OF AUGUST , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 3 0 T H AUGUST , 201 8 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 2 , AURANGABAD ; 4. THE PR. CIT - 2 , THANE ; , 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE