DCIT, New Delhi V. FIIT Jee Ltd., New Delhi

ITA 4627/DEL/2012

• Counselvise Citation: 462720114 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 29-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: POONAM KHAIRA SIDHU
• Keywords: Depreciation; Search and seizure; Cost of acquisition
• Section: 143(3); 133A; 32; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B , NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT, AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.4498/DEL/2013, 2943 AND 5543/DEL/2013 ASSESSMENT YEARS : 2007-08, 2008-09 & 2009-10 RESPE CTIVELY M/S. FITJEE LTD., VS. DCIT, CC-11, 29A,ICES HOUSE, KALU SARAI, NEW DELHI SARVAPRIYA VIHAR, NEW DELHI-110 016 GIR / PAN:AAACF2659M I.T.A.NOS.4627/DEL/2012 & 2840/DEL/2013 (ASSESSMENT YEARS 2007-08 & 2008-09 RESPECTIVELY) DCIT, CC-11, VS. M/S. FITJEE LTD., NEW DELHI 29A, ICES HOUSE, KALU SARAI, SARVAPRIYA VIHAR, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S. AGGARWAL, SR. ADV. SHRI RAVI MALL, ADV. RESPONDENT BY : SMT. POONAM KHAIRA SIDHU, CIT DR ORDER PER BENCH: THIS IS A GROUP OF FIVE APPEALS OUT OF WHICH I.T.A .NOS.4498/DEL/2013, 2943 & 5543/DEL/2013 ARE THE APPEALS FILED BY ASSES SEE FOR ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10 AGAINST SEPARATE O RDERS OF LD. CIT(A) DATED 20.06.2012, 28.02.2013 AND 22.07.2013 RESPECT IVELY. I.T.A. NO. 4627/DEL/2012 AND 2840/DEL/2013 ARE THE APPEALS FIL ED BY REVENUE IN ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 2 ASSESSMENT YEAR 2007-08 AND 2008-09 RESPECTIVELY AG AINST SEPARATE ORDERS OF LD. CIT(A) DATED 20.06.2012 AND 28.02.2013 RESPE CTIVELY. 2. LD. SR. COUNSEL AT THE OUTSET, FILED A CHART GIV ING YEAR-WISE ISSUES INVOLVED IN VARIOUS APPEALS AND SUBMITTED THAT THE COMMON ISSUE IN ASSESSEES APPEAL IS THE DEPRECIATION CLAIMED BY AS SESSEE ON INTANGIBLE ASSETS ACQUIRED DURING ASSESSMENT YEAR 1999-2000 AND IT WA S SUBMITTED THAT THE ASSESSEE HAD BEEN ALLOWED DEPRECIATION ON THESE ASS ETS TILL ASSESSMENT YEAR 2006-07 THEREFORE, DISALLOWANCE OF DEPRECIATION IN THE YEARS UNDER CONSIDERATION WAS UNLAWFUL AS THE DEPRECIATION WAS CLAIMED ON WDV OF ASSETS. IT WAS SUBMITTED THAT ISSUE OF DEPRECATION ON INTANGIBLE ASSETS HAS BEEN SETTLED BY HON'BLE SUPREME COURT IN THE CASE O F CIT VS SMIFS SECURITIES LTD. WHEREIN HON'BLE SUPREME COURT HAS H ELD THAT INTANGIBLE ASSETS ARE AKIN TO GOODWILL AND ARE ELIGIBLE FOR DE PRECIATION. RELIANCE WAS PLACED IN THIS REGARD ON THE FOLLOWING CASE LAWS:- I) CIT VS SMIFS SECURITIES LTD. 348 ITR 302 (S.C.) II) AREVA T & D INDIA LTD. VS DCIT 345 ITR 421 (DEL .) III) CIT VS HINDUSTAN COCA COLA BREWERIES P. LTD. 3 31 ITR 192 (DEL.) IV) B. RAVEENDRAN PILLAI VS CIT 332 ITR 531 (KERALA ) V) CIT VS OSWAL AGRO MILLS LTD. 341 ITR 467 (DEL.) 3. LD. D.R. SUBMITTED THAT THOUGH THE MATTER OF DEP RECIATION HAS FINALLY BEEN SETTLED BY HON'BLE SUPREME COURT IN FAVOUR OF ASSESSEE BUT IN THE CASE OF ASSESSEE IT HAD CREATED GOODWILL BY ISSUING SHA RES IN FAVOUR OF PROPRIETOR AND, SINCE PROPRIETOR WAS PAID CONSIDERATION ONLY I N THE FORM OF SHARES, THEREFORE, NO CAPITAL GAIN ON ACCOUNT OF SALE OF GO ODWILL WAS PAID AT THE TIME OF TRANSFER OF BUSINESS AND SINCE THERE WAS NIL COS T OF ACQUISITION TO ASSESSEE, ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 3 NO DEPRECIATION COULD HAVE BEEN ALLOWED. LD. SR. C OUNSEL IN HIS REJOINDER SUBMITTED THAT THE ASSESSEE WAS BEING CONTINUOUSLY ALLOWED DEPRECIATION FROM 1999-2000 TO 2006-07 AND THEREFORE, DEPRECIATI ON CLAIMED IN THESE YEARS WAS ON ACCOUNT OF DEPRECIATION TO BE ALLOWED ON BLOCK OF ASSETS AND SINCE THE ASSESSEE WAS ENTITLED TO DEPRECIATION ON BLOCK OF ASSETS AND THEREFORE, CLAIM OF DEPRECIATION WAS WRONGLY DENIED BY LD. CIT(A). ARGUING UPON GROUNDS NO.1 TO 3 IN I.T.A. NO. 4498/D EL/2012, LD. SR. COUNSEL SUBMITTED THAT THE A.O. HAD MADE AN ADDITI ON OF RS.14.20 LACS ON THE BASIS OF CERTAIN BILLS IMPOUNDED FROM THE PREMI SES OF SHRI S K GUPTA AND SUBMITTED THAT A.O. HAS ALLEGED THAT THIS EXPEN DITURE BOOKED BY ASSESSEE WAS A BOGUS EXPENDITURE WITHOUT CONFRONTING TO THE ASSESSEE AS TO WHICH EXPENDITURE DEBITED IN P & L ACCOUNT WAS BOGUS ONE. LD. SR. COUNSEL SUBMITTED THAT MERELY ON THE BASIS OF SOME BILLS PU RPORTED TO HAVE BEEN ISSUED IN THE NAME OF ASSESSEE RECOVERED FROM PREM ISES OF ANOTHER PERSON IT CANNOT BE SAID THAT THE BILLS IMPOUNDED WERE DEBITE D IN THE BOOKS OF ACCOUNTS. THEREFORE, ONUS WAS ON REVENUE TO POINT OUT FROM THE BOOKS OF ACCOUNTS AS TO WHERE THE EXPENDITURE WAS DEBITED. LD. D.R. ON THE OTHER HAND SUBMITTED THAT DURING SEARCH AND SEIZURE OPERA TION OF SHRI S. K. GUPTA, BILLS RAISED IN THE NAME OF ASSESSEE A COMPANY BELO NGING TO SHRI S K GUPTA WERE IMPOUNDED AND SHRI S K GUPTA HAD STATED IN THE STATEMENT THAT THESE WERE BOGUS BILLS AND, THEREFORE AUTHORITIES BELOW H AVE RIGHTLY MADE AND UPHELD THE ADDITION AS THE ASSESSEE DID NOT SUBMIT ANY DETAILS IN SUPPORT OF ITS CLAIM THAT THE EXPENDITURE WAS NOT BOOKED IN TH E BOOKS OF ACCOUNTS. LD. D.R. ALSO PRODUCED A COPY OF SUCH BILL AND SHE REQU ESTED THAT SHE MAY BE PERMITTED TO FILE COPIES OF BILLS AFTER THE HEARING WHICH WAS PERMITTED. LD. ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 4 D.R. THEN ON 25.02.2015 FILED COPIES OF SUCH BILLS WHICH ARE PLACED AT PAPER BOOK PAGE 32. LD. A.R. ALSO FILED COPY OF I T RETU RN OF SHRI D K GOYAL FOR ASSESSMENT YEAR 1999-2000 TO SUPPORT HER ARGUMENT T HAT SHRI D. K. GOYAL HAD NOT DECLARED ANY CAPITAL GAIN AND HAD NOT DECLA RED ANY SALE CONSIDERATION, THEREFORE, COST OF ACQUISITION TO CO MPANY WAS NIL AND THEREFORE, NO DEPRECIATION WAS ALLOWABLE TO THE ASS ESSEE. LD. D.R. ALSO FILED COPY OF STATEMENT OF SHRI D K GOYAL TO SUPPORT HER ARGUMENT THAT ADDITION ON ACCOUNT OF SURRENDERED INCOME WAS MADE ON THE BA SIS OF STATEMENT RECORDED. 4. ARGUING UPON REVENUES APPEAL IN I.T.A. NO. 4627 /DEL/2013, LD. D.R. IN RESPECT OF GROUNDS NO.2 & 3 HEAVILY RELIED UPON THE ORDER OF A.O. AND IN RESPECT OF GROUND NO.4 LD. D.R. SUBMITTED THAT THE ADDITION OFRS.6.50 CRORES MADE BY A.O. REPRESENT THE SURRENDER MADE BY ASSESS EE DURING SURVEY U/S 133 OF THE ACT WHICH HE DID NOT INCLUDE IN THE RETU RN OF INCOME AND, THEREFORE A.O. HAD RIGHTLY MADE THE ADDITION WHICH THE LD. CIT(A) HAS WRONGLY DELETED. LD. SR. COUNSEL ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE VIDE QUESTION NO.29 DURING SURVEY OPERATIO N U/S 133A WAS ASKED ABOUT ITS ESTIMATED TOTAL INCOME DURING ASSESSMENT YEAR 2007-08 FOR WHICH IT HAD STATED TO BE AROUND 6.50 CRORES WHEREAS IN T HE RETURN OF INCOME IT HAD DECLARED MORE THAN RS.16 CRORES OF INCOME WHICH WAS MORE THAN RS.6.50 CRORES MENTIONED DURING SURVEY PROCEEDINGS. IT WAS MENTIONED THAT THE ASSESSEE HAD NOT MADE ANY SURRENDER OF THIS AMOUNT AND RATHER HAD SUBMITTED ESTIMATED INCOME OF THE ASSESSEE DURING R ELEVANT YEAR. IN THIS RESPECT, OUR ATTENTION WAS INVITED TO QUESTION 29 A ND ITS ANSWER AS REPRODUCED IN THE ASSESSMENT ORDER. ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 5 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIRST TAKE UP THE APPEALS FILED BY ASSESSEE IN I.T.A.NOS.4498/DEL/2012, 5543 AND 2943/DEL/2013. O NE OF THE COMMON ISSUE INVOLVED IN THESE APPEALS IS GRIEVANCE OF ASS ESSEE BY THE ACTION OF LD. CIT(A) BY WHICH HE HAD DISALLOWED THE CLAIM OF DEPR ECIATION ON INTANGIBLE ASSETS WHICH WAS BEING ALLOWED TO IT FORM 1999-2000 TO 2006-07. LD. CIT(A) HAS UPHELD THE DISALLOWANCE OF DEPRECIATION BY HOLDING SIMILAR FINDINGS. FOR THE SAKE OF CONVENIENCE THE FINDING IN ASSESSMENT YEAR 2007- 08 ARE REPRODUCED BELOW: 8.6. 1 IT IS AN UNDISPUTED FACT THAT, BRAND ASSETS (GOODWILL) HAD BEEN ACQUIRED BY THE APPELLANT COMPANY IN ASSESSMEN T YEAR 1999- 2000 FOR A CONSIDERATION OF RS.3,96,00,000/-. IT IS LEARNT THAT THIS WAS ACQUIRED WHEN THE ERSTWHILE ENTITY FIRM FIIT-JEE WA S CONVERTED INTO A COMPANY AND THE ABOVE CONSIDERATION WAS PAID AS G OODWILL. THE RECEIVING ENTITY DID NO PAY TAX ON THE RECEIPT BEIN G CAPITAL IN A NATURE AND PAYING ENTRY CLAIMED DEPRECIATION AS DEDUCTION AT THE RATE OF 25% OF WDV.THE ARGUMENT OF THE APPELLANT IS THAT TH E DEPRECIATION HAS BEEN CLAIMED SINCE A Y 1999-2000 TILL A Y 2006- 07 AND THIS HAS BEEN CONSISTENTLY ALLOWED U/S 143(3) BY THE DEPARTM ENT THEREFORE FOLLOWLF1G THE PRINCIPAL OF CONSISTENCY IT SHOULD B E ALLOWED THE APPELLANT HAS QUOTED THE CASE OF CIT VS. HINDUSTAN COCA COLA BEVERAGES LTD., 331 ITR 192(DEL) STATING THAT DEPRE CIATION IS ALLOWABLE ON GOODWILL. THE APPELLANT ARGUED THAT TH E BRAND ASSET (GOODWILL) HAS BEEN TAKEN TO BLOCK OF ASSETS AND AL LOWABILITY OF DEPRECIATION COULD HAVE BEEN EXAMINED IN THE INITIA L YEAR ITSELF AND NOT SUBSEQUENTLY. IT HAS BEEN ADDED THAT THE MEANI NG OF BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE HAS TO BE UNDER STOOD IN THE BACKDROP OF SECTION 32(1 )(II) OF THE ACT COMMERCIA L RIGHTS ARE SUCH RIGHTS WHICH ARE OBTAINED FOR EFFECTIVELY CARRYING ON THE BUSINESS AND COMMERCE, AS IS UNDERSTOOD, IS A WIDER TERM WHICH E NCOMPASSES IN ITS FOLD MANY A FACET STUDIED IN THIS BACKGROUND, ANY R IGHT WHICH IS OBTAINED FOR CARRYING ON THE BUSINESS WITH EFFECTIV ENESS IS LIKELY TO FALL OR COME WITHIN THE SWEEP OF MEANING OF INTANGIBLE A SSET I HAVE GONE ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 6 INTO THE ARGUMENTS OF THE APPELLANT. THE CASE LAW Q UOTED BY THE APPELLANT DO NOT APPLY TO THIS CASE. THE ABOVE DECI SION RELATES TO QUASHING OF REVISION ORDER BY CIT U/S 263. HON'BLE HIGH COURT HAS HELD AS UNDER : SINCE TWO VIEWS WERE POSSIBLE IN THIS CASE AND THE AO HAS ACCEPTED ONE VIEW (I.E. GOODWILL AS INTANGIBLE ASSE T) WHICH IS A PLAUSIBLE VIEW, CIT WAS NOT JUSTIFIED IN EXERCISING HIS POWER U/S 263' THE EMPHASIS OF THE JUDGMENT WAS ON ERRONEOUS EXERC ISE OF POWER U/S 263 AND NOT ON ADJUDICATING GOODWILL AS A DEPRECIAB LE ASSET. FURTHER I DO NOT AGREE WITH THIS PROPOSITION THAT MERELY BE CAUSE THE ASSET IS THROWN IN THE POOL OF BLOCK OF ASSET, THE DEPRECIAT ION IS AUTOMATIC UNLESS OBJECTED TO IN INITIAL YEAR. THIS MEANS THAT ONCE A MISTAKE IS COMMUTED IT CANNOT BE RECTIFIED WHICH IS NOT A CORR ECT VIEW AS PER SECTION 32 (1 )(II) THE DEPRECIATION IS ALLOWABLE A S GIVEN UNDER: DEPRECIATION 32 (1) [IN RESPECT OF DEPRECIATION OF- (I) BUILDING, MACHINERY, PLANT OR FURNITURE, BEING TANGIBLE ASSETS, (II) KNOW-HOW, PATENTS, COPYRIGHTS. TRADEMARKS, LI CENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMIL AR NATURE. BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTER THE 161 DAY OF APRIL, 1998 OWNED WHOLLY OR PARTLY, BY THE ASSESSEE AND USED FO R THE PURPOSES OF THE BUSINESS OR PROFESSION, THE FOLLOWING DEDUCTIO N SHALL BE ALLOWED--} THE GOOD WILL AS INTANGIBLE ASSET IS NOT APPEARING IN THE SECTION. WITH REGARD TO 'ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE' IT CANNOT BE CONSTRUED THAT GOODWILL IS AKIN TO WOR DS APPEARING IN THE SECTION THAT IS KNOWHOW PATENTS COPYRIGHTS TRADEMAR KS, LICENSES AND FRANCHISES.' GOODWILL CANNOT BE TREATED ON PAR WITH OTHER INTANGIBLE ASSETS LIKE KNOW-HOW, PATENTS, COPY RIGHT, TRADE MA RK OR ANY BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. I WAS SO HE LD BY THE TRIBUNAL IN BHARATBHAI F VYAS VS. ITO [2005] 279 ITR (AT) 41 (AHEMDABAD). 'THE INFERENCE FOLLOWED THE FINDING THAT THE FIRM F ROM WHICH THE ASSESSEE ACQUIRED GOODWILL ON DISSOLUTION DID NOT H AVE ANY KNOW- HOW, PATENT, COPY RIGHT OR 'TRADEMARKS. THE INFEREN CE WAS THEREFORE AN EASY ONE. GOODWILL BEING A COMPENDIOUS TERM FOR VARIOUS ADVANTAGES, THERE CAN BE CIRCUMSTANCES, WHERE IT HA S AN INCLUSIVE ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 7 CHARACTER COVERING KNOW-HOW, TRADE NAME ETC. RIGHT TO DEPRECIATION CANNOT POSSIBLY BE RULED OUT MERELY BECAUSE OF ADOP TION OF NOMENCLATURE- GOODWILL BUT THEN SEPARATE VALUATION OF EACH SUCH INTANGIBLE A SET DISTINCT FROM WHAT IS GENERALLY UN DERSTOOD IN A BROADER SENSE AS GOODWILL, COULD AVOID SUCH CONTROV ERSIES' THE ISSUE OF DEPRECIATION 'OR GOODWILL CAME UP IN R G KESWANI VS. ASST. CIT[2009) 308 ITR (AT) 271 (MUM) WR.ERE IT WAS FOUN D THAT GOODWILL AND THE TRADE NAME OF THE FIRM ARE NOT INTANGIBLE A SSETS FALLING WITHIN SECTION 32(1 )(II) 8.6.2 DEPRECIATION IS ALLOWED TO COMPENSATE FOR WEA R AND TEAR OF AN ASSET THUS DEPRECIATION ON BRAND ASSET OR GOODWILL MEANS DECLINE IN GOODWILL OR REPUTATION. FROM THE FACTS OF THE CAS E IT IS DISCERNIBLE THAT THE NAME, AND INCOME OF THE APPELLANT COMPANY IS INCREASING YEAR AFTER YEAR MEANING THEREBY INCREASE III GOODWI LL. THUS CLAIM OF DEPRECIATION ON GOODWILL IS IN FACT OPPOSED TO THE VERY IDEA OF BRAND ASSET GOODWILL. NO PRUDENT BUSINESSMAN CAN THINK O F DEPLETION IN BRAND ASSET/GOODWILL. THUS HOW A CLAIM CAN BE ENTER TAINED WHEN THE BUSINESS IS ON RISE. IT IS 1101 AN ASSET WHICH IS L IKELY TO DEPRECIATE IN VALUE OVER A PERIOD OF TIME BECAUSE OF ITS USE. IN VIEW OF ABOVE DISCUSSION IT IS INFERRED THAT THE APPELLANT IS NOT ENTITLED FOR DEPRECIATION AND THEREFORE, AN ADDITIO N OF RS. 11,23,267/- IS CONFIRMED. 6. WE ARE NOT IN AGREEMENT WITH THE FINDINGS OF LD. CIT(A) WHEREIN HE HAS HELD THAT GOODWILL CANNOT BE TREATED AT PAR WIT H OTHER INTANGIBLE ASSETS LIKE KNOW HOW, PATENTS, COPYRIGHTS, TRADEMARKS AND OTHER COMMERCIAL RIGHTS OF SIMILAR NATURE. WE FIND THAT HON'BLE SUPREME CO URT IN THE CASE OF SMIFS SECURITIES LTD. 348 ITR 302 HAS HELD THAT PATENTS, SECURITIES ETC ARE AKIN TO GOODWILL. THE FINDINGS OF HON'BLE SUPREME COURT AR E REPRODUCED BELOW: 7. IT WAS FURTHER EXPLAINED THAT EXCESS CONSIDERAT ION PAID BY THE ASSESSEE OVER THE VALUE OF NET ASSETS ACQUIRED OF Y SN SHARES AND SECURITIES P. LTD. (AMALGAMATING COMPANY) SHOULD BE CONSIDERED AS GOODWILL ARISING ON AMALGAMATION. IT WAS CLAIMED T HAT THE EXTRA ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 8 CONSIDERATION WAS PAID TOWARDS THE REPUTATION WHICH THE AMALGAMATING COMPANY WAS ENJOYING IN ORDER O RETAIN ITS EXISTING CLIENTELE. 8. THE A.O. HELD THAT GOODWILL WAS NOT AN ASSET FAL LING UNDER EXPLANATION 3 TO SECTION 32(1) OF THE I. T. ACT, 19 61 (THE ACT FOR SHORT.) 9. WE QUOTE HEREINBELOW EXPLANATION 3 TO SECTION 32 (1) OF THE ACT: EXPLANATION 3. FOR THE PURPOSES OF THIS SUB-SECTIO N, THE EXPRESSIONS ASSETS AND BLOCK OF ASSETS SHALL ME AN (A) TANGIBLE ASSETS, BEING BUILDINGS, MACHINERY, PANT O R FURNITURE; (B) INTANGIBLE ASSETS, BEING KNOW-HOW, PATENTS, COPYRIG HTS, TRADE- MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS O R COMMERCIAL RIGHTS OF SIMILAR NATURE; EXPLANATION 3 STATES THATS THE EXPRESSION ASSET SHALL MEAN AN INTANGIBLE ASSET, BEING KNOW-HOW, PATENTS, COPYRIGH TS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMME RCIAL RIGHTS OF SIMILAR NATURE. A READING OF THE WORDS ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE IN CLAUSE (B) OF EXPLANATION 3 INDICATES THAT GOODWILL WOULD FALL UNDER THE EXPRES SION ANY OTHER BUSINESS OR COMMERCIAL RIGHT OF A SIMILAR NATURE. THE PRINCIPLE OF EJUSDEM GENERIS WOULD STRICTLY APPLY WHILE INTERPRE TING THE SAID EXPRESSION WHICH FINDS PLACE IN EXPLANATION 3(B). IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT GOOD WILL IS AN ASSET UNDER EXPLANATION 3(B) TO SECTION 32(1) OF THE ACT. 6.1 THEREFORE, FOLLOWING THE ABOVE HON'BLE SUPREME COURT JUDGEMENT, WE HOLD THAT BRAND VALUE CREATED IN THE BOOKS OF ASSES SEE IS AKIN TO GOODWILL ELIGIBLE FOR DEPRECIATION. THE ARGUMENT OF LD. D.R . THAT COST OF ACQUISITION WAS NIL TO ASSESSEE, DOES NOT HOLD ANY FORCE AS T HE ASSESSEE HAD CREATED BRAND VALUE (GOODWILL) AND IN CONSIDERATION HAD ISS UED SHARES TO THE PROPRIETOR. SO, THEREFORE AS FAR AS ASSESSEE IS CO NCERNED, IT HAD INCURRED COST AS IT HAD ISSUED SHARES WITHOUT RECEIVING ANY THING IN CASH. ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 9 6.2 MOREOVER, WE FIND THAT ASSESSEE HAS BEEN CONTIN UOUSLY ALLOWED DEPRECIATION ON BRAND ASSETS AND THESE ASSETS WERE NOT ACQUIRED DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THE ISSUE UND ER CONSIDERATION IS AS TO WHETHER THE CLAIM OF ASSESSEE REGARDING DEPRECIATIO N ON WDV CAN BE DENIED IN THESE YEARS. THE PROVISIONS REGARDING DEPRECIA TION AS CONTAINED IN SECTION 32(1) READ AS UNDER: THE PROVISIONS REGARDING DEPRECATION AS CONTAINED IN SECTION 32(1) READS AS UNDER: 32(1) IN RESPECT OF DEPRECIATION OF- (I) BUILDINGS, MACHINERY, PLANT OR FURNITURE, BEING TAN GIBLE ASSETS; (II) KNOW HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES , FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGH TS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTER THE 1ST DAY OF APRIL, 1998, OWNED, WHOLLY OR PARTLY, BY THE ASSESSEE AND USED FOR THE PURPOSES OF THE BUSINESS OR PROFES SION, THE FOLLOWING DEDUCTIONS SHALL BE ALLOWED- I) IN THE CASE OF ASSETS OF AN UNDERTAKING ENGAGED IN GENERATION OR GENERATION AND DISTRIBUTION OF POWER, SUCH PERCENTAGE ON THE ACTUAL COST THEREOF TO THE ASSESS EE AS MAY BE PRESCRIBED; II) IN THE CASE OF ANY BLOCK OF ASSETS, SUCH PERCENTAGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED. FROM THE ABOVE PROVISIONS WE FIND THAT THE CLAIM OF THE ASSESSEE LIES IN SECTION 32(1)(II) APPLICABLE FOR DEPRECATION ON BLOCK OF ASSETS ON WRITTEN DOWN VALUE AS ASSESSEE IS NOT ENGAGED IN GE NERATION AND DEPRECIATION OF POWER. THERE IS NO DOUBT THAT ASSE TS ON WHICH DEPRECIATION HAS BEEN CLAIMED BELONG TO BLOCK OF AS SETS ON WHICH DEPRECIATION HAS ALREADY BEEN ALLOWED AND THEREFORE , DEPRECIATION CANNOT BE DENIED TO THE ASSESSEE ON BLOCK OF ASSETS IN THE YEARS UNDER CONSIDERATION. ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 10 6.3 IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE AL LOW GROUND NOS.4-7 IN I.T.A. NO. 4498 AND GROUNDS NO.1-5 IN I.T.A. NO. 29 43 AND GROUND NO.1-5 IN I.T.A. NO. 5543. IN FACT IN I.T.A. NO. 2943 AND 5543, THE ONLY ISSUE RAISED BY ASSESSEE IS THAT OF DEPRECIATION. IN VIE W OF OUR DECISION IN FAVOUR OF ASSESSEE, THE APPEALS IN I.T.A. NOS. 2943 AND 55 43 ARE ALLOWED. 7. AS REGARDS THE ISSUE OF ADDITION MADE BY A.O. FO R AN AMOUNT OF RS.14.20 LACS IN I.T.A.NO. 4498 VIDE GSROUND NO.1 T O 3, WE FIND THAT THE ASSESSEE HAS FILED AUDITED BALANCE SHEET ALONG WITH TAX AUDIT REPORT WITH THE RETURN OF INCOME AND BOOKS OF ACCOUNT WERE EXAMINED BY A.O. AND NOWHERE, DURING ASSESSMENT PROCEEDINGS, THE A.O. POINTED OUT THE RECORDING OF EXPENDITURE OF RS.14.20 LACS WHICH THE A.O. HAD ALL EGED TO BE BOGUS EXPENDITURE. WHEN ALL THE BOOKS OF ACCOUNT DURING ASSESSMENT PROCEEDINGS WERE BEFORE THE A.O., THE A.O. COULD HAVE EASILY EX AMINED ALL EXPENSES LEDGER ACCOUNT TO FIND OUT THE ENTRIES OF RS.14.20 LACS WHICH HE HAD FAILED TO DO. WHEN ASSESSEE CLAIMED THAT IT HAD NOT RECODED THE ENTRIES AND A.O. ALSO COULD NOT FIND OUT THE RECORDING OF SUCH ENTRIES WH AT IT COULD HAVE SUBMITTED IN SUPPORT OF THE FACT THAT IT HAD NOT RECORDED THE SAME OTHER THAN BOOKS OF ACCOUNT AND AUDITED ACCOUNTS ITSELF, WHICH IT DID. THEREFORE THE ADDITION UPHELD BY LD. CIT(A) IS ONLY BASED UPON SURMISES AN D ASSUMPTIONS AND ON THE BASIS OF DOCUMENTS IMPOUNDED FROM THE PREMISES OF ANOTHER PERSON. THEREFORE, THE ADDITION MADE BY THE A.O. AND CONFIR MED BY LD. CIT(A) DOES NOT STAND ON ITS FEET AND THEREFORE, GROUNDS NO.1 T O 3 IN I.T.A. NO. 4498 ARE ALLOWED. GROUNDS NO.4 TO 7 IN I.T.A. NO. 4498 HAVE ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE ALONG WITH APPEALS NO.294 3 AND 5543 AND, THEREFORE, APPEAL IN I.T.A. NO. 4498 IS ALLOWED. ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 11 8. IN VIEW OF ABOVE, APPEALS FILED BY ASSESSEE ARE ALLOWED. 9. NOW, COMING TO THE APPEALS FILED BY REVENUE, THE GROUNDS TAKEN BY REVENUE IN THESE TWO APPEALS ARE REPRODUCED BELOW: I) GROUNDS TAKEN IN I.T.A.NO. 4627/DEL/2012 (ASSESS MENT YEAR 2007-08): 1. 'THE ORDER OF LD. COMMISSIONER OF INCOME TAX ( A) IS NOT CORRECT IN LAW AND FACTS.' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 85737 382/- MADE BY THE AO ON ACCOUNT OF FEES RECEIVED IN THE YEAR UNDER CO NSIDERATION; 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 36560 93/- MADE BY THE AO OUT OF EXPENDITURE CLAIMED UNDER THE HEAD ADVERT ISEMENT AND MARKETING. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 65000 000/- MADE BY THE AO WHICH REPRESENTS THE ADDITION INCOME OFFERED DUR ING THE SURVEY OPERATION U/S 133A OF I T ACT 1961 BUT INCLUDED IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2007-08. II) GROUNDS TAKEN IN I.T.A.NO. 2840/DEL/2013 (ASSES SMENT YEAR 2008-09): 1. THE ORDER OF LD.CIT (A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE COMMISSIONER OF INCOME TAX (AL HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.12,1L,1L,523/- ON ACCOU NT OF FEES RECEIVED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE COMMISSIONER OF INCOME TAX (AL HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.8,42,450 / - ON ACC OUNT OF CLAIM OF DEPRECIATION ON BRAND ASSETS. 10. THE REVENUE IS AGGRIEVED ON ACCOUNT OF DELETION OF ADDITION ON ACCOUNT OF FEE RECEIVED IN THE YEARS UNDER CONSIDER ATION AND THIS GROUND OF ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 12 APPEAL IS COMMON IN THESE TWO APPEALS. THE REVENUE IS FURTHER AGGRIEVED IN I.T.A. NO. 4627 WITH THE ACTION OF LD. CIT(A) BY WH ICH HE HAD DELETED THE ADDITION OF RS.36,56,093/- OUT OF EXPENDITURE CLAIM ED UNDER THE HEAD ADVERTISEMENT AND MARKETING EXPENDITURE. ONE OF TH E ISSUES INVOLVED IS DELETION OF ADDITION MADE BY A.O. ON ACCOUNT OF FEE S. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE O RDER OF HON'BLE HIGH COURT IN THE CASE OF CIT VS DINESH KUMAR GOEL REPORTED IN 331 ITR 10. WE FIND THAT DINESH KUMAR GOYAL WAS PROPRIETOR OF M/S. FIIT JEE BEFORE IT WAS CONVERTED INTO A LIMITED COMPANY REPRESENTED BY ASS ESSEE. WE FIND THAT THE ASSESSEE HAS BEEN ENGAGED AS EDUCATIONAL INSTITUTIO N AND AS PER ACCOUNTING POLICY REGULARLY FOLLOWED BY IT, ASSESSEE HAD CONSI DERED ONLY SUCH PART OF FEE AS ITS INCOME WHICH BECAME DUE/ACCRUED AND REMAININ G PART OF FEE WAS TREATED AS ADVANCE FEE AND WHICH WAS DECLARED AS I NCOME IN THE SUCCEEDING YEAR WHEN SUCH FEES DUE. THE OTHER ISSUE OF DISA LLOWANCE OF ADVERTISEMENT AND MARKETING EXPENSES WAS ALSO DELETED BY LD. CIT( A) HOLDING SIMILAR OBSERVATIONS. LD. CIT(A) HAS PASSED THE ORDER ALLO WING THE RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: THE APPELLANT FILED WRITTEN SUBMISSIONS DATED 23.9 .2011 WHEREIN NO SPECIFIC SUBMISSION WERE MADE AS REGARDS GROUND NO. 1 AND 2 OF GROUNDS OF APPEAL. GROUND NO.3 TO 3.5 OF THE GROUNDS OF APP EAL ARE IN RESPECT OF ADDITION OF RS. 8,57,37,382/- REPRESENTING FEES REC EIVED IN THE YEAR UNDER CONSIDERATION AND, HELD AS INCOME WITHOUT APPRECIAT ING THAT, THE AFORESAID SUM COULD NOT BE REGARDED AS INCOME LIABLE FOR ASSE SSMENT AS THEY WERE MERE RECEIPTS NOT IN THE NATURE OF INCOME. IT WAS S UBMITTED THAT IN THE INSTANT YEAR, THE APPELLANT HAD DECLARED INCOME OF RS. 55,4 8,70,690/- AS INCOME FROM OPERATIONS WHICH INCLUDES FEES ACCRUED IN THE INSTANT YEAR OF RS. 52,66,02,075/- WHICH HAD BEEN COMPUTED AS UNDER: (S EE PAGE 8 OF THE PAPER BOOK) ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 13 SL. PARTICULARS AMOUNT(RS.) 1 FEES RECEIVED IN F.Y(S) 2005-06 BUT ACCRUED 13, 95,17,288/- IN F.Y. 2006-07 B/F 2 ADD: FEES RECEIVED IN F.Y. 2006-07 61,23,59,4 57/- 3 TOTAL 75,18,76,745/- 4 LESS: FEE RECEIVED BUT NOT ACCRUED IN F.Y. 2006-07 C/F TO F.Y. 2007-08 22,52,74,670 /- 5 FEES ACCRUED AND RECEIVED IN F.Y. 2006-07 52,6 6,02,075/- 5.1 IT WAS THUS SUBMITTED THAT IN THE INSTANT YEAR, THE APPELLANT HAS RECEIVED FEES OF RS. 61,23,59,457/-. HOWEVER, SINCE OUT OF T HE ABOVE FEES RECEIVED, SUM' OF RS. 22,52,74,670/- HAD NOT ACCRUED IN THE I NSTANT YEAR, THE SAME WAS REDUCED AND, LIKEWISE FEES RECEIVED OF RS. 13,95,17 ,288/- IN THE PRECEDING YEAR 'AND, ACCRUED IN THE INSTANT YEAR WAS DECLARED AS INCOME AND AS A RESULT THEREOF, FEES OF RS. 52,66,02,075/- WAS DECL ARED AS INCOME IN THE INSTANT YEAR. IT WAS FURTHER SUBMITTED THAT ADDITI ON MADE BY THE AO ADOPTING THE RECEIPT BASIS IS CONTRARY TO JUDGMENT OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF APPELLANT FOR ASSESSMENT YEAR 1997-98 TO ASSESSMENT YEAR 2004-05 REPORTED IN 331 ITR 10 WHEREIN HON'BLE HIGH COURT D ISMISSED THE APPEALS FILED BY REVENUE AND HELD THAT FEES IS ASSESSABLE N OT ON RECEIPT BASIS BUT IN THE YEAR WHEN THE SERVICES ARE RENDERED BY THE APPE LLANT COMPANY. APART FROM THE ABOVE, IT WAS SUBMITTED THAT, THE ISSUE HA S ALSO BEEN DECIDED BY THE HON'BLE TRIBUNAL AND THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE FOLLOWING ORDERS: SR. DATE PARTICULARS NO. 1 01.06.2005 COPY OF ORDER OF HON'BLE TRIBUNAL FOR AY 1997-98 2 30.06.2006 COPY OF ORDER OF HON'BLE TRIBUNAL FOR AY 1998-99 3 17.11.2006 COPY OF ORDER OF HON'BLE TRIBUNAL FOR A Y 1999-00 AND 2000-01 (PAGES 72 TO 75 OF THE PAPER BOOK) 4 30.11.2007 COPY OF ORDER OF HON'BLE TRIBUNAL FOR A Y 2001-02 5 30.05.2008 COPY OF ORDER OF HON'BLE TRIBUNAL FOR A Y 2002-03 6 21. 1 1.2008 COPY OF ORDER OF HON'BLE TRIBUNAL F OR A Y 2003-04 AND 2004-05 7 31.08.2010 COPY OF ORDER OF CIT(A) FOR AY 2005-0 6 (PAGES 85 TO 104 OF THE PAPER BOOK) ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 14 8 31.08.2010 COPY OF ORDER OF CIT(A) FOR AY 2006-0 7 (PAGES 105 TO 122 OF THE PAPER BOOK) 5.2 SO FAR AS GROUND NO. 4 OF THE GROUND OF APPEAL IS IN RESPECT OF DISALLOWANCE OF RS. 36,56,093/- OUT OF EXPENDITURE CLAIMED UNDER THE HEAD ADVERTISEMENT AND MARKETING. IT WAS SUBMITTED THA T, APPELLANT IN ACCORDANCE WITH ACCRUAL SYSTEM OF ACCOUNTING CLAIME D AN EXPENDITURE OF RS. 6,77,32,603/- (PAGE 9 OF THE PAPER BOOK) UNDER THE HEAD 'ADVERTISEMENT AND PUBLICITY'. THE DETAILS AND, BASIS OF THE AFORE SAID CLAIM IS AS UNDER: SR. PARTICULARS AMOUNT 1. EXPENSES RECEIVED IN F.Y(S) 2005-06 BUT ACCRUED IN F.Y. 2006- 2,18,29,671' 2 ADD: EXPENSES RECEIVED IN F.Y. 2006-07 7,13,88 ,696/- 3 TOTAL 9,32,18,367/- 4 LESS: EXPENSES RECEIVED BUT NOT ACCRUED IN F.Y. 2006-07 C/F TO F.Y. 2007-08 2,54,85,764/ - 5 EXPENSES ACCRUED AND RECEIVED IN F.Y. 2006-07 6, 77,32,603/- 5.3 IT WAS FURTHER SUBMITTED THAT, IN THE INSTANT Y EAR APPELLANT HAD INCURRED EXPENDITURE OF RS. 7,13,88,696/- ; HOWEVER SINCE RS , 2,5.4,85,764/- DID NOT ACCRUE IN THE INSTANT YEAR, THE SAME WAS CARRIED FO RWARD. LIKE-WISE, EXPENDITURE INCURRED IN THE PRECEDING YEAR OF RS. 2 ,18,29,671/- WAS CLAIMED IN THE INSTANT YEAR AS IT PERTAINED TO THE INSTANT ASSESSMENT YEAR. IT WAS THUS SUBMITTED THAT, THE OFFICER WITHOUT APPRECIATING TH E ABOVE FACTS MECHANICALLY DISALLOWED A SUM OF RS. 36,56,093/-. T HERE IS NO BASIS MUCH LESS ANY VALID BASIS FOR DISALLOWING THE ABOVE CLAI M OF EXPENDITURE. IT WAS SUBMITTED THAT, EVEN ASSUMING THE OFFICER WAS OF TH E OPINION THAT, ONLY EXPENDITURE INCURRED DURING THE YEAR IS TO BE ALLOW ED, THEN TOO HE OUGHT TO HAVE ALLOWED EXPENDITURE OF RS. 7,13,88,696/- INSTE AD OF CLAIM OF RS. 6,77,32,603/- HENCE INSTEAD OF MAKING A DISALLOWANC E OF RS. 36,56,093/- THE OFFICER OUGHT TO HAVE REDUCED THE INCOME BY RS. 36, 56,093/- AND AS SUCH APPARENTLY, LEGALLY AND LOGICALLY, THE ADDITION MAD E IS WHOLLY UNTENABLE. IN ANY CASE, IT WAS SUBMITTED THAT, THE ADVERTISING AN D PUBLICITY EXPENSES INCURRED IN THE INSTANT CASE WERE CARRIED FORWARD I N PROPORTION TO FEES RECEIVED BUT NOT ACCRUED TO TOTAL FEES RECEIVED WHI CH IS IN ACCORDANCE WITH METHOD OF ACCOUNTING FOLLOWED IN THE PRECEDING YEAR S. IT WAS SUBMITTED THAT, THIS METHOD STANDS ACCEPTED BOTH BY THE COMMISSIONE R OF INCOME TAX ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 15 (APPEALS) AND, THE HON'BLE TRIBUNAL IN ALL THE PREC EDING YEARS AND HENCE ADDITION MADE IS UNTENABLE.' 10.1 CONSIDERING THE ABOVE SUBMISSIONS LD. CIT(A) D ELETED THE ADDITIONS. WE FIND THAT AS REGARDS THE ISSUE OF FEE, THE MATTE R HAS BEEN SETTLED BY HON'BLE DELHI HIGH COURT IN FAVOUR OF ASSESSEE IN T HE CASE OF DINESH KUMAR GOYAL THE EARLIER PROPRIETOR OF ASSESSEE COMPANY AN D FURTHER TRIBUNAL IN VARIOUS YEARS IN THE CASE OF ASSESSEE ITSELF HAS DE CIDED THE ISSUE IN FAVOUR OF ASSESSEE . SIMILARLY THE DISALLOWANCE OF EXPENSES OUT OF ADVERTISEMENT AND MARKETING EXPENSE IS ALSO COVERED IN FAVOUR OF ASSE SSEE BY EARLIER ORDERS OF TRIBUNAL AND IS ALSO BASED UPON THE PRINCIPLES OF C ONSISTENCY. 11. IN VIEW OF ABOVE, GROUNDS NO.2 & 3 IN I.T.A. NO . 4627/DEL/2012 AND GROUND NO.2 IN I.T.A. NO. 2840/DEL/2013 ARE DISMISS ED. 12. FURTHER THE REVENUE HAS CHALLENGED THE DELETION OF RS.6.50 CRORES VIDE GROUND NO.4 IN I.T.A. NO. 4627. THIS ADDITION ON ACCOUNT OF 6.50 CRORES WAS DELETED BY LD. CIT(A) BY HOLDING AS UNDE R: 8.5.1 THE A.O. HAS THUS HELD THAT RS.6,50,00,000/- SURRENDERED AS AN ADDITIONAL INCOME IN THE COURSE OF SURVEY WAS NOT D ECLARED IN THE RETURN OF INCOME AND AS SUCH, ADDITION WAS MADE. ON THE CONTR ARY, THE SUBMISSION OF THE APPELLANT IS THAT, SINCE RETURNED INCOME OF RS. 16.5 CRORES AND RETURNED TAX OF RS. 5.5 CRORES FOR FINANCIAL YEAR 2006-07 RE LEVANT TO ASSESSMENT YEAR 2007-08 ARE FAR HIGHER THAN THE OFFERED INCOME OF R S. 6.5 CRORES AND OFFERED TAX OF RS. 2.18 CRORES, THERE REMAINS NO BASIS MUCH LESS ANY VALID BASIS TO MAKE THE 'IMPUGNED ADDITION. I HAVE VIDE FOLLOWING LETTERS DATED 31 II 0/2011, 25/11/2011, 28/12/2011 AND 06/01/2012 REPEA TEDLY DIRECTED THE AO TO PROVIDE THE COPY OF STATEMENT OF SH. D.K. GOYAL MD. HOWEVER, NONE HAS BEEN FORTHCOMING. IN SUCH CIRCUMSTANCES, I AM CONST RAINT TO ADJUDICATE ON THE BASIS OF STATEMENT AS EXTRACTED IN THE ORDER OF ASSESSMENT. IN THE STATEMENT AS EXTRACTED ABOVE SH. D. K. GOEL HAD OFF ERED TOTAL INCOME OF RS. ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 16 6,50,00,000/- FOR FINANCIAL YEAR 2006-07 RELEVANT T O INSTANT ASSESSMENT YEAR AND THUS AGREED TO PAY TAX OF RS. 2.18 CRORES FOR T HE WHOLE YEAR. HOWEVER, SINCE THE RETURNED TOTAL INCOME OF RS. 16.49 CORES AND RETURNED TAX WAS RS. 5.5 CRORES ARE MORE THAN TOTAL INCOME OFFERED IN TH E COURSE OF SURVEY, NO FURTHER ADDITION CAN BE MADE. THE EXPRESSION ADDITI ONAL INCOME AS HELD IN THE ORDER OF ASSESSMENT IS ABSENT IN THE STATEMENT. IN THIS STATEMENT THE ASSESSEE HAD OFFERED TOTAL INCOME AND NOT ADDITIONA L INCOME AND SINCE TOTAL INCOME AS RETURNED IS HIGHER THAN THE TOTAL INCOME OFFERED, NO ADDITION IS TENABLE. IN FACT, ON MY DIRECTIONS, THE ASSESSEE HA D PLACED ON RECORD A CHART TABULATING INCOME DECLARED BY THE ASSESSEE FOR ASSE SSMENT YEAR 2005-06 TO ASSESSMENT YEAR 2010-11 AS UNDER: (AMOUNT IN RS.) A.Y. INCOME FROM PROFIT AS PER INCOME TAX PAID ASSESSEE OPERATIONS PROFIT AND DECLARED NT U/S LOSS ACCOUNT 2005-06 27,38,09,969 1,92,62,253 70,46,231 257 8392 143(3) 2006-07 32,87,45,881 3,75,43,290 2,27,12,581 7 645054 143(3) 2007-08 55,48,70,690 16,26,72,035 16,48,71,705 5,54,95,818 143(3) 2008-09 75,28,39,021 28,13,59,914 27,74,60,599 9,38,62,428 143(3) 2009-10 110,15,52,205 32,09,43,761 30,38,62,260 10,32,82,782 PENDING 2010-11 133,29,42,553 52,22,86,219 47,66,22,102 16,20,03,852 PENDING 8.5.2 THE PERUSAL OF THE ABOVE CHART WOULD SHOW THA T IN THE IMMEDIATELY PRECEDING YEAR RETURNED INCOME WAS OF RS. 22.27 CRO RES IN THE .INSTANT YEAR WAS OF RS. 16.49 CRORES. THE AO HAS NOT BROUGHT OUT IN THE ORDER OR IN THE REMAND REPORT THAT THE SURRENDER OF RS. 6.5 CRORE W AS IN 'ADDITION TO RETURNED INCOME. IF THAT BE THE CASE THE ADDITIONAL INCOME SURRENDERED MUST HAVE BEEN SUPPORTED BY SOME INCRIMINATING MATERIAL WHICH IS NOT THE CASE. THUS, HAVING REGARD TO THE ABOVE FACTS, THE ADDITIO N MADE OF RS.6,50,000/- IS WITHOUT ANY BASIS AND IS THEREFORE DELETED. 13. WE FIND FROM THE ANSWER TO QUESTION NO.29 FROM THE RECORDED STATEMENT OF SHRI D.K. GOYAL THAT ASSESSEE HAD ESTI MATED THE INCOME FOR THE YEAR UNDER CONSIDERATION AT RS.6.50 CRORES AND NOWH ERE HAD SURRENDERED AS ADDITIONAL INCOME, THEREFORE, WE DO NOT FIND ANY IN FIRMITY IN THE ABOVE ORDER ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 17 OF LD. CIT(A) AND THEREFORE, GROUND NO.4 OF I.T.A.N O.627/DEL/2012 IS ALSO DISMISSED. 14. NOW, COMING TO LAST GROUND IN I.T.A. NO. 2840/D EL/2013 REGARDING DELETION OF DISALLOWANCE OF RS.8,42,450/- ON ACCOUN T OF CLAIM OF DEPRECIATION ON BRAND ASSET. WE FIND THAT THIS DEL ETION OF RS.8,42,450/- ON ACCOUNT OF CLAIM OF DEPRECIATION ON BRAND ASSET IS NOT COMING OUT OF THE ORDER OF LD. CIT(A), THEREFORE, THE SAME IS DISMISS ED. 15. IN VIEW OF ABOVE, APPEALS FILED BY REVENUE ARE DISMISSED. 16. IN NUTSHELL, APPEALS FILED BY ASSESSEE ARE ALLO WED WHEREAS APPEALS FILED BY REVENUE ARE DISMISSED. 17. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.201 5. SD./- SD./- (G. C. GUPTA) (T.S. KAPOOR) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 04.03. 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NOS.4498,4627/DEL/2012 I.T.A.NOS.2943,5543 & 2840/DEL/2013 18 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 20/2 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 20,24/2,3, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER