DCIT, CIRCLE- 27(2), NEW DELHI V. ZF HERO CHASSIS SYSTEMS PVT. LTD., NEW DELHI

ITA 4410/DEL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5382 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 03-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIRMAL SINGH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G , NEW DELHI BEFORE SHRI BHAVNESH SAINI , JUDICIAL M EMBER AND SH RI O.P. KANT , ACCOUNTANT MEMBER ITA NO .4410 /DE L/ 2017 ASSESSMENT YEAR : 2012 - 13 DCIT, CIRCLE - 27(2), NEW DELHI VS. ZF HERO CHASSIS SYSTEMS PVT. LTD., 603, INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI PAN : AACCH1472L (APPELLANT) (RESPONDENT) APPELLANT BY SHRI N.K. BANSAL, SR.DR RESPONDENT BY SHRI NIRMAL SINGH, CA ORDER PER O.P. KANT, A .M. : THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A) - 9, NEW DELHI, DATED 23.12.2016, FOR ASSESSMENT YEAR 2012 - 13, RAISING FOLLOWING EFFECTIVE GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.10,29,60,726/ - ON ACCOUNT OF DEPRECIATION ON GOODWILL.' DATE OF HEARING 28.01.2019 DATE OF PRONOUNCEMENT 29.01.2019 2 ITA NO. 4410/DEL/2017 2. AT THE OUTSET, THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE SOLE ISSUE IN DISPUTE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE PERTAINING TO ASSESSMENT YEAR 2010 - 11. THEREFORE, HE PRAYED THAT THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) ON ISSUE IN DISPUTE MAY BE UPHELD. 3. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD , INCLUDING TRIBUNAL S ORDER PA SSED IN ITA NO.3887/DEL/2016 . IN THE SOLE ISSUE, THE REVENUE HAS CHALLENGED THE DELETION OF DISALLOWANCE OF RS.10,29,60,726/ - ON ACCOUNT OF DEPRECIATION ON GOODWILL. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.10,29,60,726/ - ON THE GROUND THAT THE ASSESS EE HAS NOT CLAIMED DEPRECIATION ON GOODWILL AT THE TIME OF FILING OF RETURN . FROM THE IMPUGNED ORDER, WE FIND THAT T HE LD. CIT(A) DELETED THE DISALLOWANCE BY RELYING ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SMIFS SECURITIES LTD., WHEREIN IT WAS HELD THAT GOODWILL IS AN ASSET UNDER EXPLANATION 3(B) TO SECTION 32(1) AND, THUS IT IS ELIGIBLE FOR DEPRECIATION. EXPLANATION - 5 TO SECTION 32(1) OF THE INCOME - TAX ACT, 1961, MAKES IT MANDATORY FOR THE AO TO GRANT DEPRECIATION IRRESPECTIVE OF WHETHER THE ASSESSEE HAS CLAIMED THE SAME OR NOT. 4.1 WE FIND THAT THE ISSUE - IN - DISPUTE HAS ALREADY BEEN DECIDED BY THE TRIBU NAL VIDE ORDER DATED 9 TH NOVEMBER, 2017, IN ASSESSEE OWN CASE IN ITA NO.3887/DEL/2016 (AY: 2010 - 11). THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 3 ITA NO. 4410/DEL/2017 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON REC ORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) ALLOWED THE CLAIM OF THE CASSESSEE BY KEEPING IN VIEW THE PROVISIONS CONTAINED IN EXPLANATION 5 TO S. 32(1) OF THE ACT WHICH READ AS UNDER: EXPLANATION - 5 TO SECTION 32(1) OF THE INCOME TAX ACT, 1961 EXPLANATION 5: FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SUB - SECTION SHALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF DEPRECIATION IN COMPUTING HIS TOTAL INCOME. 5. ON PERUSED OF THE ABOVE PROVISION, IT IS CLEAR THAT EVEN IF THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION IN RESPECT OF DEPRECIATION IN COMPUTING THE TOTAL INCOME, THE DEDUCTION IS ALLOWABLE AS PER THE PROVISIONS OF S. 32(1) OF THE ACT. WE, THEREFORE, DO NOT SE E ANY VALID GROUND TO INTERFERE WITH THE FINDINGS GIVEN BY THE LD. CIT(APPEALS). HENCE, THE DEPARTMENTAL APPEAL IS DISMISSED. 5. RESPECTFULLY FOLLOWING THE FINDING OF THE TRIBUNAL (SUPRA), WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) ON THE ISSUE - IN - DISPUTE. ACCORDINGLY, GROUND OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUN CED IN THE OPEN COURT ON 2 9 T H JANUARY , 201 9 . S D / - S D / - [ BHAVNESH SAINI ] [O.P. KANT] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 9 T H JANUARY, 2019 . RK / - [D.T.D.S] COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI