DCIT, CHENNAI V. AB Mauri India Pvt. Ltd., CHENNAI

ITA 810/CHNY/2015

• Counselvise Citation: 81021714 RSA 2015
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 10-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S P CHIDAMBARAM
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NO. 810/MDS/2015 / ASSESSMENT YEAR : 2005-06 THE DEPUTY COMMISSIONER OF INCOME-TAX, CORPORATE CIRCLE-1(1), CHENNAI 34. APPELLANT) V. M/S. AB MAURI INDIA PVT. LTD., PLOT NO. 218 & 219, BOMMASANDRA JIGANI LINK ROAD, BENGALURU-560 105. PAN AAECA9923H RESPONDENT) / APPELLANT BY : SHRI A.V.SREEKANTH, JCIT / RESPONDENT BY : SHRI S.P.CHIDAMBARAM, ADVOCATE ! / DATE OF HEARING : 10.09.2015 '# ! / DATE OF PRONOUNCEMENT: 23.09.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 29 .12.2014 FOR THE ASSESSMENT YEAR 2005-06. - - ITA 810/1 5 2 2. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL READ AS UNDER: 2.1 THE LD. CIT(A) ERRED IN ALLOWING THE ASSESSEE S APPEAL ON NON-COMPETE FEE BY RELYING ON THE DECISIO N IN THE CASE OF M/S. AB MAURI INDIA PVT. LTD. FOR A. Y. 2001-02 IN ITA NO.1520/MDS/2007, WHEN THE DEPARTMENT HAS NOT ACCEPTED THE DECISION AND APPEALED TO HIGH COURT U/S.260A OF THE ACT. 2.2 THE LD. CIT(APPEALS) ERRED IN NOT FOLLOWING THE SUBSEQUENT JURISDICTIONAL ITATS DECISION WHICH IS FAVOURABLE TO THE REVENUE IN THE CASE OF M/S. ARKEM A PEROXIDES INDIA PRIVATE LIMITED VS. CIT IN ITA NOS.2212/MDS2006 DATED 13.01.2012. 2.3 THE LEARNED CIT(A) ERRED IN NOT FOLLOWING THE DELHI HIGH COURTS DECISION IN THE CASE OF SHARP BUSINESS SYSTEMS INDIA LIMITED VS. DCIT IN 79 DTR 329 WHEREIN IT IS HELD THAT NO DEPRECIATION IS ALLOWABL E ON NON-COMPETE FEE. 2.4 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED T HE FACT THAT THE REVENUE HAS FILED SLP AGAINST THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF PENTASOFT TECHNOLOGIES LTD. (2014) (41 TAXMANN.COM 120) WHICH IS PENDING BEFORE THE HONBLE APEX COURT . 3. THE ISSUE FOR CONSIDERATION BEFORE US RELATES TO DISALLOWANCE OF THE CLAIM FOR DEPRECIATION ON NON-C OMPETE FEE TO THE TUNE OF ` 45,93,445/-. THE ASSESSEE CLAIMED DEPRECIATION ON NON-COMPETE FEE PAID TO VARIOUS PARTIES DURING T HE PREVIOUS YEARS RELEVANT TO THE ASSESSMENT YEARS 2003-04 AND 2004-05 - - ITA 810/1 5 3 TREATING THE SAME AS INTANGIBLE ASSET. FOR THE DET AILED REASONS GIVEN IN ASSESSMENT ORDERS FOR THE ASSESSMENT YEARS 2001-02 AND 2003-04, THE ASSESSING OFFICER DISALLOWED THE C LAIM OF DEPRECIATION ON NON-COMPETE FEE OF ` 45,93,445/-. AGGRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(AP PEALS), WHO AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE AND THE WRITTEN SUBMISSIONS, FOLLOWING THE DECISION OF THE TRIBUNAL, CHENNAI BENCH IN ASSESSEES OWN CASE IN ITA NO.1520/MDS/2007 FOR THE ASSESSMENT YEAR 2001-02, O BSERVED THAT THE NON-COMPETE FEE PAID SHOULD BE CONSIDERED AS INTANGIBLE ASSET ELIGIBLE FOR DEPRECIATION. AGAINS T THIS, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE WAS CONSIDER ED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.1520/MDS/2007 FOR THE ASSESSMENT YEAR 2001-02 DA TED 20.5.2009, WHEREIN IT WAS HELD AS UNDER: 3. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, CHENNAI IN THE CA SE OF M/S.MEDICORP TECH. INDIA LTD. (2000) 122 TTJ (CHENNAI) 394. IT IS SEEN THAT SHRI SHAJI P. JACOB , WAS THE LEARNED DR, WHO HAD ARGUED THE APPEAL IN THE CASE OF M/S. M/S.MEDICORP TECH. INDIA LTD. (SUPRA). - - ITA 810/1 5 4 HIS ARGUMENTS WERE DISCUSSED BY THE TRIBUNAL, IN DETAIL, IN ITS ORDER DATED 16.1.2009. IN FACT, ONE OF US WAS THE AUTHOR OF THAT ORDER. THE FACTS OF THE CAS E OF THE PRESENT APPEAL ARE IDENTICAL AND THEREFORE, WE FOLLOW THE PRECEDENT AND ALLOW THIS GROUND. IN OUR OPINION, THE DECISION IN ASSESSEES OWN CASE TO BE PREFERRED RATHER THAN OTHER PARTIES. ACCORDINGLY, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE UPHOLD THE FINDING OF THE C.I.T.(APPEA LS) ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 23 RD OF SEPT., 2015 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 23 RD SEPT., 2015. MPO* 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.