ITO 9(1)(3), MUMBAI V. ELSTER METERING P.LTD, MUMBAI

ITA 4254/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75322 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: PRAKASH K JOTWANI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND DR.S.T.M.PAVALAN, JUDICIAL MEMBER ITA NO.4254/MUM/2012 ASSESSMENT YEAR: 2009-10 ITO 9(1)(3), MUMBAI, R. NO. 224, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI VS. ELSTER METERING PVT. LTD. UNIT-11, PRADIGM-B, MIND SPACE, MALAD LINK ROAD, MALAD (W) MUMBAI 400064. PAN:- AABCE1487B APPELLANT RESPONDENT ASSESSEE BY : SHRI PRAKASH K.JOTWANI REVENUE BY : MS. SONIA KUMAR DATE OF HEARING : 13.01.2014 DATE OF PRONOUNCEMENT : 22.01.2014 ORDER PER DR.S.T.M.PAVALAN, JM THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-19, MUMBAI, DATED 12.4.2010 FOR THE ASSESSMENT YEAR 200 9-10. 2. IN GROUND NO.1, THE REVENUE HAS AGITATED THE DEC ISION OF THE LD.CIT(A) IN DELETING THE DISALLOWANCE/ADDITION MADE BY THE AO ON ACCOUNT OF DEPRECIATION ON TECHNICAL KNOW- HOW OF RS. 1,74,66,248/- CLAIMED BY THE ASSESSEE. 2.1 BRIEFLY STATED, THE AO, DURING THE ASSESMENT PR OCEEDINGS, NOTED THAT THE ASSESSEE HAS CLAIMED DEPRECTION AT RS. 1,74,66,248/- ON TECH NICAL KNOW-HOW OF RS.1,27,59,903/- AND RS.47,06,345/- ON ACCOUNT OF RIGHT TO USE TRADEMARK . HE FURTHER OBSERVED THAT THIS ISSUE OF CLAIM OF DEPRECIATION ON INTANGIBLE ASSETS HAD BEEN EXAMINED AT LENGTH BY THE AO IN THE ASSESSMENT YEARS 2004-05 TO 2008-09 AND ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAD PURCHASED THE UNIT FR OM ABB LTD, AS ONGOING CONCERN FOR A TOTAL CONSIDERATION OF RS. 40.74 CRORE FOR THE AGGR EGATE ASSETS WORTH RS. 10.10 CRORE. THESE PURCHASES WERE MADE BY THE ASSESSEE WITHOUT ASSIGNI NG COST OF EACH ASSET AND HAD NOT PURCHASED THE TECHNICAL KNOW-HOW AND RIGHT TO USE T RADE MARK FROM ABB LTD. THEREFORE, ACCORDING TO THE AO, THIS BEING A SELF GENERATED AS SET BY THE ASSESSEE. IT WAS FURTHER OBSERVED BY THE AO THAT IN EARLIER YEARS, THE APPEA L IS BEING CONTESTED BY THE REVENUE IN ITA NO.4254/MUM/2012 ELSTER METERING PVT.LTD. ASSESSMENT YEAR: 2009-10 2 THE TRIBUNAL ON THIS ISSUE. ON APPEAL, THE LD CIT(A ), FOLLOWING HIS ORDERS FOR THE EARLIER ASSESSMENT YEARS, DIRECTED THE AO TO ALLOW THE CLAI M OF DEPRECIATION. AGGRIEVED BY THE IMPUGNED DECISION, THE REVENUE HAS RAISED THIS GROU ND IN THE APPEAL BEFORE US. 2.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, IT IS NOTED THAT AN IDENTICAL ISSUE PERTAINING TO THE CLAIM OF DEPRECIA TION ON TECHNICAL KNOW-HOW & RIGHT TO USE TRADEMARK HAS BEEN DECIDED BY THE TRIBUNAL IN ASSES SEES FAVOUR BY CONFIRMING THE ORDERS OF LD.CIT(A) FOR THE ASSESSMENT YEARS 2004-05 TO 20 07-08 IN THE ASSESSEES OWN CASE. IN THE ABSENCE OF ANY ORDER FROM THE HIGHER FORUM AGAI NST THE ORDER OF THE TRIBUNAL AND IN THE ABSENCE OF ANY DISTINGUISHING FACTS BROUGHT ON REC ORD BY THE REVENUE FOR THE YEAR UNDER CONSIDERATION, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD.CIT(A) IN DIRECTING THE AO TO ALLOW THE CLAIM OF DEPRECIATION BY RELYING ON HIS OWN ORDERS FOR THE EARLIER YEARS, WHICH IN TURN HAVE BEEN CONFIRMED BY THE TRIBUNAL. ACCORDINGLY, WE DECIDE THIS ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. RESULTANTLY, GROUND NO. 1 IS DISMISSED. 3. IN GROUND NO. 2, THE REVENUE HAS AGITATED THE DE CISION OF THE LD.CIT(A) IN ALLOWING THE BROUGHT FORWARD UBABSORBED DEPRECIATION AMOUNTI NG TO RS. 1,39,55,255/-. IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT ONCE THE DEPRECIA TION HAS BEEN ALLOWED IN THE EARLIER YEARS, THE SAME HAS TO BE ALLOWED TO BE CARRIED FOR WARD AND THE BENEFIT OF UNABORBED DEPRECIATION HAS TO BE GIVEN. HENCE GROUND NO. 2 IS CONSEQUENTIAL IN NATURE AND DISMISSED AS THE SAME DOES NOT REQUIRE ANY ADJUDICATION. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 2 ND DAY OF JANUARY, 2014. SD/- SD/- (R.C. SHARMA) (DR.S.T.M.PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 22 /01/2014 SKS SR. P.S ITA NO.4254/MUM/2012 ELSTER METERING PVT.LTD. ASSESSMENT YEAR: 2009-10 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI