DCIT 9(3)(1), MUMBAI V. DHL LEMUIR LOGISTICS P.LTD, MUMBAI

ITA 2146/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2657 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SHUKLA
• Keywords: Depreciation; Revised return
• Section: 143(3); 115JB; 32

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) ./ I.T.A. NO . 2146 /MUM/20 1 5 ( / ASSESSMENT YEAR : 20 09 - 10 ) DY. COMMISSIONER OF INCOME TAX 9(3)(1), 418, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 / VS. M/S DHL LEMUIR LOGISTICS PVT LTD, 8 TH FLOOR, THE LEELA GALLERIA, ANDHERI KURLA,ROAD, ANDHERI (E), MUMBAI - 400059. ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAACM6824H / APPELLANT BY: M/S ANUPAMA SHUKLA / RESPONDENT BY NONE / DATE OF HEARING : 1 9 . 7 .201 6 / DATE OF PRONOUNCEMENT : 25. 7.2016 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 16 , MUMBAI DT. 31.12 .201 4 PERTAINING TO A.Y. 20 09 - 10 . D ESPITE OF SERVICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE, THEREFORE, WE PROCEED TO DECIDE THE APPEAL EX - PARTE WITHOUT PRESENCE OF ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE BEFORE US AND AFTER HEARING THE LD.DR. ITA NO. 2146 /M/1 5 2 2. ONLY ISSUE RAISED IN ALL T HE GROUNDS OF APPEAL IS AGAINST THE DIRECTION BY THE LD. CIT(A) RELYING ON THE DECISION OF THE APEX COURT IN THE CASE OF CIT V/S SMIFS SECURITIES LTD REPORTED IN 348 ITR 302 (SC) BY IGNORING THE FACT THAT THE FACT S OF T HE SAID CASE ARE DISTINGUISHABLE FROM THE FACTS OF THE ASSESSEES CASE AND ALSO IN - COMPLETE DISREGARDING THE CBDT CIRCULAR NO.549 DA T ED 31.10.1989. 3 . FACTS OF THE CASE ARE THAT HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 ON 30.9.2009 DECLARING TOTAL INCOME OF RS.63,71,94,610/ - WHICH WAS REVISED ON 30.3.2011 AT AN INCOME OF RS.33,90,50,860/ - BY CLAIMING DEPRECIATION OF RS.29.81 CRORES AT THE RATE OF 20% ON WRITTEN DOWN VALUE (WDV) OF BLOCK OF INTANGIBLE ASSETS OF RS.119.25 CRORES. IN THE REVISED RETU RN, THE ASSESSEE DECLARED THE PROFIT US/ 115JB OF THE ACT AT AN AMOUNT OF RS.42,00,26,456/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES U /S 143(2) DATED 19.8.2010 AND 142 (1) DATED 21.12.2010 WERE ISSUED AND SERVED UPON T HE ASSESSEE . 4 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO EXPLAIN AND JUSTIFY THE ALLOWABILITY OF DEPRECIATION OF RS.29,81,43,750/ - IN RESPECT OF INTANGIBLE ASSETS (GOODWILL) WHICH WAS CLAIMED BY THE ASSESSEE IN IS REVISED RETURN OF INCOME FILED ON 30.3.2011. THE ASSESSEE REPLIED THAT IT HAD INCURRED COST TOWARDS GOODWILL AT RS.159.01 CRORES DURING THE FINANCIAL YEAR 2007 - 08. THE ASSESSEE ALSO CLAIMED DEPRECIATION ON THE SAID INTANGIBLE ASSE T S TO THE TUNE OF ITA NO. 2146 /M/1 5 3 RS.39,75,26 ,000/ - FOR THE YEAR ENDING ON 31.3.2008 AND ACCORDINGLY, WDV OF THE SAID INTANGIBLE BLOCK OF ASSETS AS ON 1.4.2008 ARRIVED AT RS.119,25,75,000/ - AND THUS, RIGHTLY CLAIMED DEPRECIATION ON THE SAID WDV AT THE RATE OF 25% AMOUNTING TO RS.29,81,43,750/ - AS PER THE PROVISIONS OF SECTION 32 (1)(III) OF THE ACT BY FILING REVISED RETURN ON 30.3.2011 . IN DEFENCE OF HIS SUBMISSIONS, THE ASSESSEE RELIED ON THE SERIES OF DECISIONS AS INCORPORATED IN PARA 4.2 OF THE ASSESSMENT ORDER. THE AO ULTIMATELY REJECTED THE SUBMISSIONS OF THE ASSESSEE AND DISALLOWED THE DEPRECIATION OF RS.29,81,43,750/ - ON GOODWILL AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AND FRAMED THE ASSESSMENT AT RS.63,71,94,610/ - UNDER THE NORMAL PROVISIONS OF ACT AND RS.42,00,26,450/ - UNDER SECTION 115JB OF THE ACT , VIDE ORDER DATED 13.3.2013 PASSED UNDER SECTION 143(3) R.W.S. 92CA(4) OF THE ACT. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE SUBMISS IONS OFLD.AR, WHICH HAS BEEN INCORPORATED IN PARA 2.2 OF THE APPEAL ORDER ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER : 3. DECISION AFTER CAREFUL PERUSAL OF THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSIONS FILED BY THE A/R OF THE APPELLANT IT HAS BEEN OBSERVED THAT THE CASE OF THE APPELLANT COMPANY IS COVERED BY THE ORDER OF MY PREDECESSOR IN APPEAL NO. CIT(A) - 16/ ADDL.CIT - 8(1)/IT - 190/2011 - 12 VIDE ORDER DATED 23.08.2013. HENCE THE AO IS DIRECTED TO ALLOW THE DEPRECIATION ON INTANG IBLE ASSETS AS' APPEARING ''IN THE AUDITED BOOKS OF ACCOUNT OF THE APPELLANT FILED WITH THE RETURN OF INCOME AS DIRECTED BY MY PREDECESSOR. HENCE THE GROUND ITA NO. 2146 /M/1 5 4 5. WE HAVE CAREFULLY CONSIDERED THE MATERIAL AVAILABLE BEFORE US AND SUBMISSIONS OF THE LD. DR. THE LD. DR SUBMITTED BEFORE US THAT THE FAA H A S WRONGLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO AL L O W DEPRECIATION ON INTANGIBLE ASSETS ON THE GOODWILL BY FOLLOWING T HE DECISION IN THE CASE OF SMIFS SECURITIES LTD (SUPRA) , WHEREAS THE FACTS OF THE PRESENT CASE AND RELIED UPON BY THE LD.CIT(A) ARE DISTINGUISHABLE. THE LD. DR SUBMITTED THAT IN THE CASE OF SMIFS SECURITIES LTD (SUPRA) THE CLAIM OF GOODWILL WAS MADE IN THE RETURN OF INCOME, WHEREAS IN THE PRESENT CASE, THE ASSESSEE C LAIMED DEPRECIATION BY MERE FILING A LETTER DURING THE COURSE OF ASSESSMENT PROCEEDINGS . FURTHER THE DIRECTION OF THE LD.CIT(A) TO AO WAS AGAINST THE SPIRIT OF CBDT CIRCULAR MENTIONED ABOVE. 6 . WE FIND FROM THE RECORD THAT THE ASSESSEE HAS RIGHTLY CLAIME D DEPRECIATION ON GOODWILL BEING INTANGIBLE ASSETS. WE ALSO FIND FROM THE RECORD THAT SIMILAR ISSUE WAS RAISED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2008 - 09, WHICH WAS DECIDED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 23.8.2013 IN APPEAL NO. CIT(A) - 16 / ADDL.CIT - 8(1)/IT - 190/2011 - 12 AND THUS, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY ITS OWN CASE IN THE EARLIER YEARS. AFTER CONSIDERING THE RELEVANT RECORDS, ORDERS OF AUTHORITIES BELOW, WE FIND THAT THE SIMILAR ISSUE HAS BEEN DECIDED BY T HE FAA FOR THE ASSESSMENT YEAR 2008 - 09 IN FAVOUR OF THE ASSESSEE HOLDING THAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION ON GOODWILL BY FOLLOWING THE DECISION OF APEX COURT IN THE CASE OF SMIFS SECURITIES LTD (SUPRA ) . WE, THEREFORE, ARE OF THE CONSIDERED OPINION THAT THE CASE OF THE ITA NO. 2146 /M/1 5 5 ASSESSEE STANDS COVERED BY THE EARLIER DECISION BY THE ORDER OF FAA. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). ACCORDINGLY, WE DISMISS THE APPEAL OF THE REVENUE. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25TH JULY, 2016 . 25TH JULY, 2016 S D SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBA I: 25TH JULY, 2016 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, T RUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI