DCIT, New Delhi V. M/s. Central Warehousing Corp., New Delhi

ITA 4155/DEL/2014

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5058 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH SRDR
• Assessee Lawyers: S KRISHNAN
• Keywords: Depreciation; Rule of consistency; Revised return; Revenue expenditure; TDS
• Section: 143(3); 115JB; 13; 32; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: FRIDAY-A, NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI G.S. PANNU, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.4155/DEL/2014 (ASSESSMENT YEAR-2007-08) DY. CIT, CIRCLE-3(1), NEW DELHI. VS. M/S CENTRAL WAREHOUSING CORP. 4/1, SIRI INSTITUTIONAL AREA, AUGUST KRANTI MARG, HAUZ KHAS, NEW DELHI. PAN AAACC 1206D (APPELLANT) (RESPONDENT) C.O. NO.95/DEL/2015 ARISING OUT OF ITA NO.4155/DEL/2014 (ASSESSMENT YEAR-2007-08) M/S CENTRAL WAREHOUSING CORP. 4/1, SIRI INSTITUTIONAL AREA, AUGUST KRANTI MARG, HAUZ KHAS, NEW DELHI. PAN AAACC 1206D VS. DY. CIT, CIRCLE-3(1), NEW DELHI (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY SH. JAGDISH SINGH, SR-DR RESPONDENT BY SH. S.KRISHNAN, ADV. DATE OF HEARING 10.07.2020 DATE OF PRONOUNCEMENT 30.09.2020 2 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE DEPARTMENT AGAINST THE ORDER DATED 30.04.2014 PASSED BY THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS)-VI, NEW DELHI {CIT (A)} FOR ASS ESSMENT YEAR 2007-08. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS A CORPORATION INCORPORATED U/S 3 OF THE WAREHOUSING C ORPORATION ACT, 1964 FOR THE PURPOSE OF MARKETING OF COMMODITI ES. THE ASSESSEE CORPORATION DERIVES BULK OF ITS INCOME FRO M LETTING OUT OF GODOWNS/WAREHOUSES FOR STORAGE, PROCESSING AND FAC ILITATING THE MARKETING OF ITS COMMODITIES. THE ORIGINAL RETU RN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED DECLARING INCOME UNDER NORMAL PROVISIONS OF INCOME TAX ACT, 1961 (HE REINAFTER CALLED THE ACT) AT RS. NIL AFTER SET OFF OF BROUG HT FORWARD LOSSES OF EARLIER YEARS. THE BOOK PROFIT U/S 115JB OF THE ACT WAS DECLARED AT RS.1,25,90,89,126/- WITH THE TOTAL TAX LIABILITY OF RS.14,12,69,800/- WHICH WAS ADJUSTED AGAINST TDS AMO UNT OF RS.27,40,39,959/- THEREBY SEEKING REFUND OF RS.13, 27,70,159/-. 3 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. 2.1 SUBSEQUENTLY, THE RETURN OF WAS REVISED DECLARI NG TOTAL INCOME AT RS. NIL UNDER NORMAL PROVISIONS OF THE AC T AND A BOOK PROFIT OF RS.1,25,58,42,049/- U/S 115JB WITH A MAT LIABILITY OF 14,00,54,479/- AND THEREBY CLAIMING A REFUND OF RS.17,69,72,954/-. 2.2 THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSM ENT WAS COMPLETED U/S 143(3) OF THE ACT COMPUTING THE IN COME AT RS.38,74,93,520/- UNDER THE NORMAL PROVISIONS OF TH E ACT AND A BOOK PROFIT OF RS.1,64,65,82,376/- U/S 115JB OF THE ACT. 2.3 SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT. IN RESPONSE TO T HE NOTICE, THE ASSESSEE SUBMITTED THAT THE REVISED RETURN FILED BY IT MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE U /S 148 OF THE ACT. THE ASSESSEE ASKED FOR THE REASONS FOR REOPEN ING WHICH WERE DULY MADE AVAILABLE TO THE ASSESSEE. THE ASSESS MENT WAS COMPLETED U/S 147 R.W.S 143(3) OF THE ACT WHEREIN THE INCOME OF THE ASSESSEE WAS COMPUTED AT RS.43,00,71,395/- AFTER A MAKING A DISALLOWANCE OF ALLEGED EXCESS CLAIM OF DEPRECIATI ON AMOUNTING 4 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. TO RS.1,25,28,875/- AND ANOTHER ADDITION OF RS.3,00 ,49,000/- BEING CLAIMS AGAINST CONTRACTORS/THIRD PARTIES. 2.4 AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A) CHALLENGING THE REOPENING AND ALSO CHALLENG ED THE ADDITIONS ON MERITS. THE LD. CIT (A), HOWEVER, UPHE LD THE REOPENING. WITH REFERENCE TO THE ADDITIONS OF RS.3, 0049,000/- PERTAINING TO CLAIM AGAINST CONTRACTORS AND OTHER P ARTIES, THE LD. CIT (A) NOTED THAT AN IDENTICAL ISSUE HAD BEEN DECI DED IN FAVOUR OF THE ASSESSEE IN ASSESSMENT YEAR 2003-04 BY THE T HEN LD. CIT (A). FOLLOWING THE SAME, THE LD. CIT (A) GIVEN RELIE F TO THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER (AO) TO DELETE THE ADDITION. WITH RESPECT TO THE SECOND ISSUE PERTAINI NG TO ALLEGED EXCESS DEPRECIATION CLAIM OF RS.1,25,28,875/- ON RE GISTRATION AND LICENSE FEES PAID TO INDIAN RAILWAYS FOR RUNNING CON TAINERS TRAINS, THE LD. CIT (A) HELD THAT SINCE THE LICENSE WAS NOT OWNED BY THE ASSESSEE, DEPRECIATION HAD BEEN RIGHTLY DISA LLOWED. THE LD. CIT (A) ALSO NOTED THAT THE ASSESSING OFFICER H AD COMMITTED A MISTAKE APPARENT FROM RECORD DUE TO THE FACT THAT T HE LICENCE FEE PAID HAD TO BE AMORTISED OVER A PERIOD OF 20 YEARS (AFTER TREATING 5 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. THE SAME AS DEFERRED REVENUE EXPENDITURE) AND THE D ISALLOWANCE, ACCORDINGLY, SHOULD HAVE BEEN RS.3,75,28,875/- WHERE AS THE ASSESSING OFFICER HAD ALLOWED DOUBLE DEDUCTION BY WA Y OF TWICE ALLOWING THE DEFERRED REVENUE EXPENDITURE OF RS.2.5 CRORES. THE LD. CIT (A) DIRECTED THE ASSESSING OFFICER TO ENHAN CE THE ASSESSMENT BY RS. 2.5 CRORES. 2.5 NOW, THE DEPARTMENT, AGGRIEVED BY THE ORDER PAS SED BY THE LD. CIT (A) IS IN APPEAL BEFORE THIS TRIBUNA L WHEREAS THE ASSESSEE HAS PREFERRED FILING A CROSS OBJECTION. TH E RESPECTIVE GROUNDS RAISED BY BOTH THE PARTIES ARE AS UNDER: GROUNDS OF APPEAL IN ITA NO.4155/DEL/2014- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.3,00,49,000/- ON ACCOUNT OF CLAIM AGAINST CONTRACTOR/PARTIES FOLLOWING THE ORDER OF HIS PREDE CESSOR FOR A.Y. 2003-04 IGNORING THE FACT THAT THE ASSESSEE WA S FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND ALL S UMS RECEIVABLE DURING THE PREVIOUS YEAR MUST BE ACCOUNT ED FOR AND ALSO THAT THE FACTS OF THIS YEAR ARE DIFFERENT AS COMPARED TO A.Y.2003-04. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) O F APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 6 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. GROUNDS OF APPEAL IN CROSS OBJECT NO.95/DEL/2015- 1) BOTH IN THE FACTS AND LAW THE RE-OPENING OF ASSESSM ENT U/S 147 AND ACCORDINGLY NOTICE ISSUED U/S 148 DATED 30.03.2012 IS WRONG AND BAD IN LAW. THE RE-OPENING IS TO BE ANNULLED AS THERE IS NO FAILURE ON THE PART O F THE APPELLANT CORPORATION IN DISCLOSING THE FULL MATERI AL. 2) IT IS CONTENDED THAT THE CIT (APPEALS) HAD ERRED IN ENHANCING A SUM OF RS.2,50,00,000/- WITHOUT APPRECIATING THE FACTS OF THE CASE. 3) IT IS CONTENDED THAT THE CORPORATION IS ENTITLE TO DEPRECIATION OF RS.50,00,00,000/- BEING THE LICENSE FEE FOR THE PERIOD OF 20 YEARS. 3.0 THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED T HAT GROUND NO.1 OF THE ASSESSEES CROSS OBJECTION CHALL ENGED THE REOPENING. IT WAS SUBMITTED THAT THIS GROUND WAS NOT BEING PRESSED. ACCORDINGLY GROUND NO.1 OF ASSESSEES CROS S OBJECTION IS DISMISSED AS NOT PRESSED. 3.1 THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT GROUND NO.3 OF THE ASSESSEES CROSS OBJECTION PRAYED FOR DEPRECIATION BEING ALLOWED ON RS.50 CROR ES BEING LICENSE FEE PAID FOR 20 YEARS. IN THIS REGARD, IT WA S SUBMITTED THAT THE ASSESSEE COMPANY HAS CAPITALIZED THE REGISTRATI ON FEE PAID TO 7 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. THE MINISTRY OF RAILWAYS AS IT WAS AN INTANGIBLE ASSE T AND HAS CLAIMED DEPRECIATION ON IT. IT WAS SUBMITTED THAT T HIS FEE WAS PAID FOR THE CONCESSION AGREEMENT FOR OPERATION OF CONTAINER TRAINS ON INDIAN RAILWAYS NETWORK AND THE SAID LICEN SE DATED 04.01.2007 HAD BEEN GRANTED TO THE ASSESSEE COMPANY FOR THE SAID PURPOSE. IT WAS SUBMITTED THAT THIS LICENSE/AGR EEMENT WAS TO OPERATE FOR 20 YEARS AND, THEREFORE, THE ASSESSE E HAD RIGHTLY CLAIMED DEPRECIATION ON IT BY TREATING IT AS AN INT ANGIBLE ASSET. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER, HO WEVER, WAS OF THE OPINION THAT THE IMPUGNED FEE PAID TO THE MINIS TRY OF RAILWAYS CANNOT BE CONSIDERED AS AN INTANGIBLE ASSET AND, THEREFORE, HE HAD DISALLOWED THE DEPRECIATION CLAIM ED WHILE ALLOWING AMORTIZATION @ 1/20 THEREBY MAKING A NET AD DITION OF RS.1,25,28,875/-. IT WAS SUBMITTED THAT THAT LD. CIT (A) HAD NOT ONLY UPHELD THE ACTION OF THE ASSESSING OFFICER BUT HAD ALSO DIRECTED THE ASSESSING OFFICER TO ENHANCE THE ASSES SEES INCOME BY RS. 2.5 CRORES ON THE GROUND THAT THE ASSESSING OFFICER HAD ALLOWED DOUBLE DEDUCTION. IT WAS SUBMITTED THAT AN I DENTICAL ISSUE HAS ARISEN BEFORE THIS TRIBUNAL IN THE CASE O F CONTAINER 8 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. CORPORATION OF INDIA LTD. VS. DCIT IN ITA NOS. 1867 /DEL/2012 AND 2167/DEL/2014 FOR ASSESSMENT YEAR 2009-10 WHEREI N VIDE ORDER DATED 19.01.2017 AND AN IDENTICAL ISSUE HAD B EEN DECIDED IN FAVOUR OF THE ASSESSEE I.E. CONTAINER CORPORATIO N OF INDIA LTD. THE AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO THE RELEVANT FINDINGS OF THE TRIBUNAL AS CONTAINED IN PARAGRAPHS 7 TO 14 OF THE SAID ORDER AND SUBMITTED THAT IN THIS CASE ALSO THE DEPARTMENT HAD DISALLOWED THE ASSESSEES CLAIM OF DEPRECIATION ON LICENCE FEE PAID AND HAD GIVEN THE BENEFIT OF AMORTIZATION OF THE SAME FOR A PERIOD OF 20 YEARS BUT THE ITAT HAD HELD THAT THE LICENSE FEE PAID WAS IN THE NATURE OF INTANGIBLE ASSET ELIGIBLE FOR DEPRECIATION AND, THEREFORE, HAD TO BE ALLOWED. 3.2 THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT GROUND NO. 2 OF THE ASSESSEES CROSS OBJECTION WAS LINKED TO GROUND NO.3 ARGUED AS ABOVE. 4.0 IN RESPONSE, THE LD. SR. DEPARTMENTAL REPRESENTATIVE (DR) READ OUT THE RELEVANT PORTIONS FROM THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT (A) A ND 9 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. VEHEMENTLY ARGUED THAT THE AMORTIZATION HAD BEEN RI GHTLY GRANTED AND THAT THE ASSESSEE WAS NOT ELIGIBLE FOR D EPRECIATION. 5.0 WITH RESPECT TO THE DEPARTMENTS APPEAL CHALLENGING THE ACTION OF THE LD. CIT (A) IN DELETI NG THE ADDITION OF RS.3,00,49,000/- ON ACCOUNT OF CLAIM AGAINST CON TRACTORS, THE LD. SR. DR AGAIN PLACED RELIANCE ON THE FINDINGS AN D OBSERVATIONS OF THE ASSESSING OFFICER AND SUBMITTE D THAT THE LD. CIT (A) WAS INCORRECT IN DELETING THE ADDITION BY FO LLOWING THE ORDER OF HIS PREDECESSOR IN ASSESSMENT YEAR 2003-04 . 6.0 IN RESPONSE, THE LD. AUTHORIZED REPRESENTATIV E SUBMITTED THAT THE LD. CIT (A) HAD BEEN CORRECT IN DELETING THE ADDITION IN AS MUCH AS THE ASSESSEE COMPANY HAD MAD E FULL DISCLOSURE REGARDING THE ISSUE IN ITS PRINTED ACCOU NTS UNDER THE HEAD NOTES ON ACCOUNTS WHICH WAS A PART OF THE ASSE SSMENT RECORDS. IT WAS SUBMITTED THAT THE ASSESSEE HAD NOT ACCOUNTED THE CLAIM AGAINST CONTRACTORS/PARTIES AMOUNTING TO RS.300.49 LACS PENDING ITS REALIZATION DUE TO UNCERTAINTY IN REALIZATION OF THIS AMOUNT BECAUSE THEY WERE BEING DISPUTED BY THE PARTIES AND THE RECOVERY WAS HIGHLY DOUBTFUL EVEN IF THE CLAIM WA S SETTLED IN 10 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. FAVOUR OF THE ASSESSEE CORPORATION. IT WAS SUBMITTED THAT THE ASSESSEE HAS BEING CONSISTENTLY FOLLOWING THE POLICY OF ACCOUNTING AND OFFERING FOR TAX, THE AMOUNT IN THE YEAR IT IS REALIZED AND THIS PRACTICE HAS BEEN ACCEPTED EVEN BY THE C & AG WHICH CARRIES OUT THE AUDIT OF THE ASSESSEE CORPORATION. THE LD. AUTH ORIZED REPRESENTATIVE ALSO SUBMITTED THAT EVEN AS PER ACCO UNTING STANDARD-9 DEALING WITH REVENUE RECOGNITION, WHICH HA S BEEN ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, INCOME WHICH HAS TO BE CREDITED TO THE PROFIT AND LOSS ACCO UNT SHOULD COMPLY WITH THE ACCRUAL NORMS I.E., THE AMOUNT SHOUL D BE CAPABLE OF BEING QUANTIFIED AND THERE SHOULD BE NO UNCERTAINTY IN REALIZATION OF THE SAME. THE LD. AUTHORIZED REPRESE NTATIVE ALSO SUBMITTED THAT IDENTICAL ISSUE HAD BEEN ALLOWED BY THE LD. CIT (A) IN ASSESSMENT YEARS 2003-04 & 2004-05 AGAINST WH ICH THE DEPARTMENT HAD NOT FILED ANY APPEAL BEFORE THE TRIB UNAL. 6.0.1 ON A QUERY FROM THE BENCH, THE LD. SR. DR ACCEPTED THAT NO APPEALS HAD BEEN PREFERRED BY THE DEPARTMENT ON THE ISSUE IN ASSESSMENT YEAR 2004-05 AND THAT AL SO NO APPEAL WAS PENDING FOR ASSESSMENT YEAR 2003-04 BEFORE THE T RIBUNAL. 11 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. 7.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. WE NOW TAKE UP THE APPEAL OF THE DEPARTMENT FIRST. 7.1 THE SOLE ISSUE UNDER CHALLENGE BEFORE US BY T HE DEPARTMENT IS THE DELETION OF DISALLOWANCE OF RS.3,0 0,49,000/- ON ACCOUNT OF CLAIM AGAINST CONTRACTORS/THIRD PARTI ES. IN THIS REGARD IT IS SEEN THAT THE AMOUNT UNDER THE QUESTIO N HAS BEEN DULY DISCLOSED BY THE ASSESSEE CORPORATION IN ITS N OTES TO ACCOUNTS IN POINT NO.18 WHEREIN IT HAS BEEN STATED T HAT THE CORPORATION HAS NOT ACCOUNTED ITS CLAIM AGAINST CONTRACTORS/PARTIES FOR RS.300.49 LACS PENDING ITS REALIZATION. THE LD. CIT (A), WHILE ALLOWING RELIEF TO THE ASSESSE E, HAS PRIMARILY RELIED ON THE ORDER OF THE LD. CIT (A) IN ASSESSMENT YEAR 2003-04 IN APPEAL NO.9206/2007 VIDE ORDER DATE D 28.12.2007. THE LD. CIT (A) HAS ALSO NOTED THAT THE ASSESSEES SUBMISSION IS TENABLE IN AS MUCH AS IT HAS NOT ACCO UNTED FOR THE CLAIM AGAINST CONTRACTORS/THIRD PARTIES FOR RS.300. 49 PENDING ITS REALIZATION DUE TO INHERENT UNCERTAINTY IN THE ULTIMATE REALIZATION OF THE SAID AMOUNT. THE LD. CIT (A) HAS ALSO NOTED 12 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. THAT THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING AC COUNTING STANDARD-9 DEALING WITH REVENUE RECOGNITION ISSUED B Y THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA. IN THE PROCEEDINGS BEFORE US, THE LD. SR. DR COULD NOT BRING TO OUR NO TICE ANY PERVERSITY IN THE SAID ORDER OF THE LD. CIT (A). WE ALSO NOTE THAT A SIMILAR ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASS ESSEE BY THE LD. CIT (A) IN ASSESSMENT YEARS 2003-04 AND 2004-05 WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT. THEREFORE, IN SUCH A SITUATION, FOLLOWING THE PRINCIPLE OF CONSISTENCY, WE FIND NO REASON TO DEVIATE FROM THE FINDINGS OF THE LD. CIT( A) ON THE ISSUE. ACCORDINGLY, WE DISMISS GROUND NO.1 OF THE DEPARTME NT APPEAL. 7.2 GROUND NO.2 OF THE DEPARTMENTS APPEAL IS GENERAL IN NATURE NOT REQUIRING ANY SEPARATE ADJUDI CATION. 7.3 IN THE RESULT, THE APPEAL OF DEPARTMENT STAND S DISMISSED. 8.0 COMING TO THE CROSS OBJECTION FILED BY THE ASSESSEE, GROUND NO.1 IS BEING DISMISSED AS NOT PRE SSED. 8.1 GROUND NOS. 2 & 3 OF THE ASSESSEES CROSS OBJECTION ARE LINKED AND CHALLENGE THE ACTION OF TH E LOWER 13 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. AUTHORITIES IN TREATING THE LICENSE FEE PAID TO IND IAN RAILWAYS AS DEFERRED REVENUE EXPENDITURE ELIGIBLE FOR AMORTIZAT ION OVER A PERIOD OF 20 YEARS BUT NOT BEING ELIGIBLE FOR DEPRE CIATION. IN THIS REGARD, IT HAS BEEN BROUGHT TO OUR NOTICE THAT AN I DENTICAL ISSUE HAD BEEN DECIDED BY THIS TRIBUNAL IN THE FAVOUR OF THE ASSESSEE IN THE CASE OF CONTAINER CORPORATION OF INDIA LTD. VS. DCIT (SUPRA) VIDE ORDER DATED 19.01.2017. IT IS SEEN THA T IN THIS CASE, THE ASSESSEE HAD PAID THE REGISTRATION FEE OF RS.50 CRORES TO MINISTRY OF RAILWAYS FOR MOVEMENT OF CONTAINER TRAI N ON INDIAN RAILWAYS NETWORK AS NON REFUNDABLE REGISTRATION FEES . THE ASSESSEE CLAIMED DEPRECIATION @ 25%. HOWEVER, THE A SSESSING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION AND AL LOWED 1/20 TH OF THE AMOUNT AS A DEDUCTION. WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL, THE CO-ORDINATE BENCH, IN THE SAID ORDER PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF AREVA T&D INDIA LTD. VS. DCIT REPORTED IN 3 45 ITR 420 WHEREIN IT HAD BEEN HELD THAT INTANGIBLE ASSETS INCL UDE BUSINESS CLAIMS, BUSINESS INFORMATION, BUSINESS RECORDS AND ASSETS WHICH ARE INVALUABLE FOR CARRYING ON THE BUSINESS OF THE ASSESSEE. IT 14 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. WAS FURTHER HELD BY THE HONBLE DELHI HIGH COURT THA T INTANGIBLE ASSETS WERE COMPARABLE TO A LICENSE TO CARRY ON THE EXISTING BUSINESS AND THAT IN ABSENCE OF SUCH INTANGIBLE ASS ET, IT WOULD BE DIFFICULT FOR THE ASSESSEE TO CARRY ON ITS BUSIN ESS AND, THEREFORE, SUCH INTANGIBLE ASSETS WERE ELIGIBLE FOR DEPRECIATION IN TERMS OF SECTION 32 (1)(II) OF THE ACT. FOLLOWING TH E JUDGMENT OF THE HONBLE DELHI HIGH COURT, IN THE CASE OF CONTAI NER CORPORATION OF INDIA LTD. VS. DCIT (SUPRA), VIDE OR DER DATED 19.01.2017, THIS TRIBUNAL NOTED THAT IN THIS CASE, THE ASSESSEE HAD EARNED A BENEFIT OF ENDURING NATURE OF PLYING O N INDIAN RAILWAYS TRACKS FOR A PERIOD OF 20 YEARS WHICH WAS A VALUABLE COMMERCIAL RIGHT AVAILABLE TO THE ASSESSEE FOR A CO NSIDERABLE PERIOD OF TIME AND, THEREFORE, THE SAME WAS ELIGIBL E FOR DEPRECIATION U/S 32(1) (II) OF THE ACT. DURING THE COURSE OF PROCEEDINGS BEFORE US IN THE PRESENT APPEAL, THE DE PARTMENT COULD NOT BRING TO OUR NOTICE ANY JUDGMENT CONTRARY TO THE ABOVE SAID ADJUDICATION AND IN FAVOUR OF THE REVENUE ON T HE ISSUE. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF AREVA T&D VS. DCIT (SUPRA) AND 15 ITA NO.4155/DEL/2014 C .O. NO.95/DEL/2015 DCIT VS. M/S CENTRAL WARE HOUSING CORP. ALSO THE ORDER OF THE TRIBUNAL IN THE CASE OF CONTA INER CORPORATION OF INDIA (SUPRA), WE ALLOW GROUND NOS. 2 & 3 OF THE ASSESSEES CROSS OBJECTION AND DIRECT THAT BENEFIT OF DEPRECIATION ON THE REGISTRATION FEE OF RS.50 CRORES PAID TO IND IAN RAILWAYS BE ALLOWED THE BENEFIT OF DEPRECIATION. 8.3 IN THE RESULT, THE CROSS OBJECTION OF THE ASS ESSEE STANDS PARTLY ALLOWED. 9.0 IN THE FINAL RESULT, THE APPEAL OF THE DEPART MENT STANDS DISMISSED WHEREAS THE CROSS OBJECTION OF THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED ON 30/09/2020. SD/- SD/- (G.S.PANNU) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: 30/09/2020 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI