ORION INTERNATIONAL SUPPORT, MUMBAI V. DCIT CIR 7(1), MUMBAI

ITA 5188/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7611 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 20-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: SUBHASH M SHETTY
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI RAJENDRA SINGH, A.M. AND SHRI V. DURGA RAO, J.M. ITA NO. 5188/MUM/2010 ASSESSMENT YEAR : 2007-08 ORION INTERNATIONAL SUPPORT SERVICES, APP ELLANT 1, DINKAR, 486-A, BHAGOJI KEER MARG, MAHIM, MUMBAI 400 016. (PAN AACO 1774E) VS. DY. COMMISSIONER OF INCOME-TAX OFFICER, RESPO NDENT CIRCLE-7(1), MUMBAI. APPELLANT BY : MR. SUBHASH M. SHETTY RESPONDENT BY : MR. M. RAJAN DATE OF HEARING : 20/03/2012 DATE OF PRONOUNCEMENT : 28/03 /2012 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- 13, MUMBAI, PASSED ON 09/03/2010 FOR THE AS SESSMENT YEAR 2007-08. 1. GROUND NO. 1 READS AS UNDER:- THE LEARNED CIT(A) ERRED IN REFUSING TO ADMIT AND/O R CONSIDER THE APPELLANTS APPEAL ON THE QUESTION OF TREATING THE AMOUNT PAID TOWARDS NON-COMPETE COMPENSATION AS REVENUE EX PENDITURE AND ALLOWING THE SAME. 2. THE ASSESSEE HAD CLAIMED EXPENDITURE OF RS. 22,2 0,471/- ON ACCOUNT OF DEFERRED REVENUE EXPENSES WRITTEN OFF. T HE AO DISALLOWED THE SAID AMOUNT FOLLOWING THE DECISION IN AY 2005-0 6. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE AO. ITA NO. 5188/MUM/2010 ORION INTERNATIONAL SUPPORT SERVICES 2 3. BOTH THE PARTIES AGREED THAT THE ISSUE UNDER CON SIDERATION IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2001-02 IN ITA NO. 1797/ MUM/05 VIDE ORDER DATED 28 TH JANUARY, 2011 AND FOR AY 2005-06 IN ITA NO. 2324/MUM/09 VIDE ORDER DATED 16 TH SEPTEMBER, 2011. THE TRIBUNAL IN AY 2001-02 FOLLOWING THE SPECIAL BENCH DECISION OF ITAT, DELHI IN THE CASE OF TECUMSEH INDIA VS. ACIT, 127 ITD 01 HEL D THAT THE AMOUNT PAID TOWARDS NON-COMPETE FEE IS NOT A REVENU E EXPENDITURE. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH, WE DISMISS GROUND NO. 1 OF THE ASSESSEE. 4. GROUND NO. 2 READS AS UNDER:- THE LEARNED CIT(A) ERRED IN REFUSING TO ADMIT AND/O R CONSIDER THE APPELLANTS ALTERNATE CLAIM THAT IF THE EXPENDI TURE WAS CONSIDERED AS CAPITAL IN NATURE, DEPRECIATION SHOUL D BE ALLOWED ON THE SAME AS THE EXPENDITURE RESULTED IN THE CREA TION OF VALUABLE INTANGIBLE ASSET OF THE APPELLANTS BUSINE SS. 5. BOTH THE PARTIES AGREED THAT THE ISSUE IS COVERE D IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE TRIBUNAL IN ASSES SEES OWN CASES FOR AY 2001-02 AND 2005-06 (SUPRA). IN THE SAID YEARS, THE TRIBUNAL FOLLOWING THE DECISION OF CHENNAI BENCH OF ITAT IN THE CASE OF ACIT VS. REAL IMAGE TECH. PVT. LTD., 120 TTJ 983 HELD TH AT THE ASSESSEE IS ENTITLED FOR DEPRECIATION IN RESPECT OF NON-COMPETE FEE PAYMENTS MADE BY IT. RESPECTFULLY FOLLOWING THE DECISION OF THE T RIBUNAL IN THE SAID YEARS, WE ALLOW THE DEPRECIATION CLAIM OF THE ASSES SEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF MARCH, 2012. SD/- SD/- (RAJENDRA SINGH) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 28 TH MARCH, 2012. ITA NO. 5188/MUM/2010 ORION INTERNATIONAL SUPPORT SERVICES 3 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, C BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.