Millennium Beer Industries Ltd., Bangalore V. DCIT, New Delhi

ITA 1969/DEL/2012

• Counselvise Citation: 196920114 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: PAWAN GULATI
• Keywords: Depreciation
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .1968/DEL/2012, 1969/DEL/2012 & 1970/DEL/2012 1968/DEL/2012, 1969/DEL/2012 & 1970/DEL/2012 1968/DEL/2012, 1969/DEL/2012 & 1970/DEL/2012 1968/DEL/2012, 1969/DEL/2012 & 1970/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2002 2002 2002 2002- -- -03, 2006 03, 2006 03, 2006 03, 2006- -- -07 & 2007 07 & 2007 07 & 2007 07 & 2007- -- -08 0808 08 M/S MILLENNIUM BEER M/S MILLENNIUM BEER M/S MILLENNIUM BEER M/S MILLENNIUM BEER INDUSTRIES LIMITED, INDUSTRIES LIMITED, INDUSTRIES LIMITED, INDUSTRIES LIMITED, (SINCE AMALGAMATED WITH (SINCE AMALGAMATED WITH (SINCE AMALGAMATED WITH (SINCE AMALGAMATED WITH UNITED BREWERIES LTD.), UNITED BREWERIES LTD.), UNITED BREWERIES LTD.), UNITED BREWERIES LTD.), LEVEL 4, UB TOWER, LEVEL 4, UB TOWER, LEVEL 4, UB TOWER, LEVEL 4, UB TOWER, UB CITY, VITTAL MALLYA ROAD, UB CITY, VITTAL MALLYA ROAD, UB CITY, VITTAL MALLYA ROAD, UB CITY, VITTAL MALLYA ROAD, BANGALORE BANGALORE BANGALORE BANGALORE 560 003. 560 003. 560 003. 560 003. PAN : PAN : PAN : PAN : AAACI2816F. AAACI2816F. AAACI2816F. AAACI2816F. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -6(1), 6(1), 6(1), 6(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAWAN GULATI, CA. RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-IX, NEW DELHI DATED 14 TH SEPTEMBER, 2011 FOR THE AY 2002-03, 2006-07 & 2007-08. 2. THE COMMON GROUNDS RAISED IN ALL THESE THREE YEARS R EAD AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) HAS ERRED IN CONFIRMING THE REDUCTION OF L OSS DECLARED BY THE APPELLANT BY CONCURRING WITH THE ASSE SSING OFFICER. ITA-1968 TO 1970/D/2012 2 2. THAT THE LD.CIT(A) OUGHT TO HAVE SEEN THAT THE PAYMENT OF GOODWILL AROSE IN THE APPELLANTS CASE AT TH E TIME OF A RUNNING BUSINESS AND IT BEING A VALUABLE INTANGIBLE ASSET, THE APPELLANT IS ENTITLED TO DEPRECI ATION AS PERMITTED U/S 32 OF THE INCOME TAX ACT. 3. THAT THE LD.CIT(A) OUGHT TO HAVE SEEN THAT THE DEFINITION OF BLOCK OF ASSETS READ WITH APPENDIX 1 OF INCOME TAX RULES CLEARLY PERMITS THE APPELLANT TO AVA IL DEPRECIATION ON INTANGIBLE ASSET DEPLOYED BY IT IN IT S BUSINESS. 4. THAT IN ANY VIEW OF THE MATTER, THE ACTION OF TH E LEARNED CIT(A) IN DENYING THE ALLOWANCE OF DEPRECIA TION ON GOODWILL IS CONTRARY TO THE PROVISION OF LAW AND HENC E DESERVES TO BE SET ASIDE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR RESCIND ANY OF THE GROUNDS MENTIONED HEREINABOVE. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL PLACED BEFORE US. WE FIND THIS ISSUE TO BE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2004 -05 & 2005- 06 VIDE ITA NO.2889 & 2890/DEL/2009 WHEREIN THE ITA T HELD AS UNDER:- 7. IN THE LIGHT OF VIEW TAKEN BY THE HONBLE APEX COURT THAT GOODWILL IS AN ASSET UNDER EXPLANATION 3(B) TO SECTION 32(1) OF THE ACT, WE HAVE NO HESITATION IN V ACATING THE FINDINGS OF THE LD.CIT(A) AND ACCORDINGLY, DIREC T THE AO TO ALLOW THE CLAIM OF DEPRECIATION ON GOODWILL IN T ERMS OF AFORESAID DECISION OF THE HONBLE APEX COURT. ITA-1968 TO 1970/D/2012 3 CONSEQUENTLY, GROUND NOS.3 AND 4 IN THE APPEAL FOR TH E AY 2004-05 AND GROUND NOS.2 TO 4 IN THE APPEAL FOR THE AY 2005-06 ARE ALLOWED. SINCE WE HAVE ALLOWED THE CLA IM OF THE ASSESSEE ON MERITS IN THE AY 2004-05, GROUND NOS.1 & 2 RELATING TO VALIDITY OF REOPENING OF THE ASSESSMENT BECOME ACADEMIC IN NATURE AND ARE, THEREFORE, TREAT ED AS INFRUCTUOUS. 4. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRI BUNAL, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEPRECIATIO N ON GOODWILL. ACCORDINGLY, THE ASSESSEES APPEALS ARE ALLOWED. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED . DECISION PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2013. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 23.08.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S MILLENNIUM BEER INDUSTRIES LIMITED, M/S MILLENNIUM BEER INDUSTRIES LIMITED, M/S MILLENNIUM BEER INDUSTRIES LIMITED, M/S MILLENNIUM BEER INDUSTRIES LIMITED, (SINC (SINC (SINC (SINCE AMALGAMATED WITH UNITED BREWERIES LTD.), E AMALGAMATED WITH UNITED BREWERIES LTD.), E AMALGAMATED WITH UNITED BREWERIES LTD.), E AMALGAMATED WITH UNITED BREWERIES LTD.), LEVEL 4, UB TOWER, UB CITY, VITTAL MALLYA ROAD, LEVEL 4, UB TOWER, UB CITY, VITTAL MALLYA ROAD, LEVEL 4, UB TOWER, UB CITY, VITTAL MALLYA ROAD, LEVEL 4, UB TOWER, UB CITY, VITTAL MALLYA ROAD, BANGALORE BANGALORE BANGALORE BANGALORE 560 003. 560 003. 560 003. 560 003. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -6(1), NEW DELHI. 6(1), NEW DELHI. 6(1), NEW DELHI. 6(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR