LAFARGE INDIA P.LTD, V. ASST CIT 3(2),

MA 211/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9421 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 29-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: KANCHANKAUSHAKDANESH BAFNA
• Keywords: Depreciation
• Section: 32; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI A BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM & SHRI N K BILLAIYA, AM MISCELLANEOUS APPLICATION NO.209 TO 211/MUM/2012 & MISCELLANEOUS APPLICATION NOS.620 TO 622/MUM/2012 ARISING OUT OF ITA NOS. 1657, 3504 & 7311/MUM/2008 (ASST YEARS 2001-02,2004-05 & 2005-06) LAFARGE INDIA P LTD BHAKTAWAR, 14 TH FLOOR NARIMAN POINT \MUMBAI 21 VS THE ASST COMMR OF INCOME TAX 3(2), MUMBAI (APPLICANT) (RESPONDENT) PAN NO. AAACL4159L ASSESSEE BY SH KANCHANKAUSHAK/DANESH BAFNA REVENUE BY SH RAJASHI DWIVEDY DT.OF HEARING 5 TH OCT 2012 DT OF PRONOUNCEMENT 12 TH , OCT 2012 PER VIJAY PAL RAO, JM THESE TWO SETS OF THREE MISCELLANEOUS APPLICATIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMPOSITE ORDER DATED 30.11.20 11 OF THIS TRIBUNAL FOR THE AYS2001-02, 2004-05 & 2005-06. 2 AT THE TIME OF HEARING, THE LD AR OF THE ASSESSE E HAS SUBMITTED THAT THE MAS NOS 209/MUM/2012 TO 211/MUM/2012 WERE FILED BY THE ASSESSEE FOR RECTIFICATION OF THE IMPUGNED ORDER; HOWEVER, SUBSEQUENTLY, IN ORDE R TO INCORPORATE AN ADDITIONAL PRAYER FOR RECTIFICATION OF A MISTAKE, IN VIEW OF T HE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SMIFS SECURITIES LTD I N CIVIL APPEAL NO.5961 OF 2012 DECIDED ON 22.8.2012 AND THE DECISION OF THE HONBL E JURISDICTIONAL HIGH COURT IN MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 2 THE CASE OF TAJ SATS AIRCATERING LTD VS CIT IN INC OME TAX APPEAL NO.743 OF 2012 DATED 5 TH SEPT 2012 , THE ASSESSEE FILED ANOTHER SET OF MISC ELLANEOUS APPLICATIONS VIDE MA NO.620 TO 622/MUM/2012. THUS, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE FIRST SET OF THREE MISCELLANEOUS APPLICATI ONS VIDE MA NOS. 209 TO 211/MUM/2012 MAY BE ALLOWED TO BE WITHDRAWN BEING DUPLICATE MISCELLANEOUS APPLICATIONS AGAINST THE SAME ORDER. THE ASSESSEE HAS ALSO FILED THE SEPARATE LETTER FOR PERMISSION TO WITHDRAW THESE DUPLICATE MISCELLA NEOUS APPLICATIONS. 2.1 ON THE OTHER HAND, THE LD DR HAS NO OBJECTION, IF THE MISCELLANEOUS APPLICATIONS NOS. 209 TO 211/MUM/2012 ARE DISMISSED AS WITHDRAWN. ACCORDINGLY, IN THE INTEREST OF JUSTICE THE ASSESSEE IS ALLOWED TO WITHDRAW THESE MISCELLANEOUS APPLICATIONS AND CONSEQUENTLY, WE DISMISS THE MISCE LLANEOUS APPLICATIONS NOS 209 TO 211/MUM/2012, BEING WITHDRAWN. 3 IN THE MISCELLANEOUS APPLICATIONS NOS 620 TO 622/ MUM/2012, THE ASSESSEE MADE COMMON AVERMENTS TO POINT OUT THE MISTAKE IN T HE IMPUGNED ORDER OF THIS TRIBUNAL. 4 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR HAS SUB MITTED THAT THE ASSESSEE ACQUIRED THE BUSINESS OF CEMENT DIVISION FROM RAYMOND LTD FO R A LUMP SUM PRICE OF ` 751 CRORES VIDE AGREEMENT DATED 26 TH AUG 2000. THE TRANSACTION WAS A SLUMP SALE AND NO VALUE WAS ASSIGNED TO THE INDIVIDUAL ASSET OF TH E CEMENT DIVISION; BUT A CONSIDERATION WAS PAID ON LUMP SUM BASIS. THE ASSE SSEE HAS RECOGNISED A SUM OF ` 180.86 CRORES AS GOODWILL BEING THE EXCESS OF PURC HASE CONSIDERATION OVER THE MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 3 VALUE OF THE TANGIBLE ASSETS ACQUIRED. THE ASSESSE E CLAIMED DEPRECIATION U/S 32 OF THE I T ACT ON THE SAID AMOUNT OF GOODWILL RECOGNIS ED IN THE BOOKS. THE ASSESSING OFFICER REJECTED THE CLAIM OF DEPRECIATION ON THE G OODWILL AND HELD THAT THE DEFINITION OF INTANGIBLE DOES NOT COVER GOODWILL AN D HENCE NO DEPRECIATION IS ALLOWABLE. 4.1 ON APPEAL, THE COMMISSIONER OF INCOME TAX(APPEA LS) ALLOWED THE CLAIM OF THE ASSESSEE SO FAR AS THE EXCESS PAYMENT AS MADE FOR ACQUIRING THE INTANGIBLE ASSETS BEING LICENCES, KNOW-HOW, TRADEMARKS, COAL LINKAGES, RAIL LINKAGES, BUSINESS RIGHTS ETC., AND COMPUTED THE TOTAL VALUE OF THE A SSETS IN THE NATURE OF COMMERCIAL RIGHTS AT ` 157.95 CRORES LEAVING A BALANCE OF ` . 42.11 CRORES. THE COMMISSIONER OF INCOME TAX(APPEALS) HAS HELD THAT THE REMAINING AMO UNT OF ` 42.11 CRORES PAID ON ACCOUNT OF PURE GOODWILL, WHICH IS NOT ENTITLED TO DEPRECIATION. 4.2 THE REVENUE CHALLENGED THE ORDER OF THE COMMISS IONER OF INCOME TAX(APPEALS) ON THE GROUND THAT THE EXCESS AMOUNT P AID IS NOTHING BUT GOODWILL. THE LD AR HAS CONTENDED THAT WHILE DECIDING THE ISS UE OF DEPRECIATION ON INTANGIBLE ASSETS, THE TRIBUNAL HAS OBSERVED THAT A SEPARATE V ALUE OF THE ASSETS HAS TO BE UNDERTAKEN WITH RESPECT TO THE INTANGIBLE ASSETS IN THE FORM OF BUSINESS OR COMMERCIAL RIGHTS AND INTANGIBLE ASSETS, BEING GOOD WILL. ACCORDINGLY, THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSIN G OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. THE LD AR HAS POINTED OUT THA T THOUGH THE ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRES H ADJUDICATION; HOWEVER, THE TRIBUNAL HAS OBSERVED THAT THE ASSESSEE HAS NOT CHALLENGED T HE FINDING OF THE COMMISSIONER OF INCOME TAX(APPEALS) THAT THE DEPRECIATION IS NOT ALLOWABLE ON GOODWILL AND THUS, MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 4 THIS ISSUE HAS ATTAINED FINALITY. BUT IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SMIFS SECURITIES LTD (S UPRA) AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TAJ SATS A IRCATERING LTD (SUPRA), THESE OBSERVATIONS WHILE SETTING ASIDE THE ISSUES FOR VA LUATION OF THE ASSETS ON BIFURCATION BASIS IN TWO CATEGORIES BECOME IRRELEVANT AND REQUI RES TO BE RECTIFIED. THE LD AR HAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT CHALLEN GE THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) BECAUSE OF THE REASONS THAT THE COMMISSIONER OF INCOME TAX(APPEALS) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY TREATING THE EXCESS PAYMENT TOWARDS ACQUISITION OF THE INTANGIBLE ASSETS BEING BUSINESS OR COMMERCIAL RIGHTS; HOWEVER, THERE IS A MISTAKE OF COMPUTATION OF THE A MOUNT AND THEREBY DISALLOWED THE DEPRECIATION ON A SUM OF ` 41.11 CRORES AGAINST WHICH THE ASSESSEE HAS ALREAD Y FILED RECTIFICATION APPLICATION DATED 12.1.2011 U/S 154 OF THE I T ACT. 4.3 THE LD AR HAS FURTHER POINTED OUT THAT THERE IS ANOTHER MISTAKE IN THE IMPUGNED ORDER OF THIS TRIBUNAL WITH REGARD TO THE FINDING OF GROUND NO.3 WHEREBY IN PARA 19, THIS TRIBUNAL HAS FOLLOWED THE DECISION OF THIS TRIBUNAL IN THE CASE OF GUJARAT GUARDIAN LTD AND OBSERVED THAT THE LUMP SUM PREPAYM ENT PREMIUM FOR RESTRUCTURING OF LOAN RESULTING IN DEDUCTION ON R ATE OF INTEREST IS ALLOWABLE AS INTEREST AND THAT SECTION 43B(D) ALSO PERMITS SUCH DEDUCTION OF PAYMENT. HOWEVER, IN THE LAST SENTENCE OF PARA 19, IT IS MISTAKENLY MENTIONE D AS GROUND NO.3 OF THE REVENUE FOR THE AYS 2001-02 IS ALLOWED. THUS, THE LD AR HA S SUBMITTED THAT THERE IS AN APPARENT MISTAKE IN THE LAST SENTENCE OF PARA 19, W HICH REQUIRES RECTIFICATION AND INSTEAD OF THE WORD ALLOWED, THE WORD DISMISSED SH OULD HAVE BEEN WRITTEN. MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 5 4.4 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THA T SINCE THE ASSESSEE HAS NOT CHALLENGED THE FINDING OF THE LD COMMISSIONER OF IN COME TAX(APPEALS) ON THE POINT OF ALLOWABILITY OF THE CLAIM OF DEPRECIATION ON GOO DWILL AND THEREFORE, THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL ON THIS POINT AS THE SAME HAS NOT BEEN ADJUDICATED. THE DECISION OF THE HONBLE SUPREME C OURT AS WELL AS THE HIGH COURT AS RELIED UPON BY THE LD AR ARE ON THE POINT OF ALL OWABILITY OF DEPRECATION ON GOODWILL; WHEREAS THE ISSUE HAS BEEN SET ASIDE BY T HIS TRIBUNAL FOR PROPER VALUATION OF THE INTANGIBLE ASSETS AND NO QUESTION OF ALLOWABILI TY OF DEPRECATION ON GOODWILL HAS BEEN ADJUDICATED BY THIS TRIBUNAL. HENCE, THE LD DR HAS SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL ON THE MERIT OF THE CASE CAN NOT BE REVIEWED UNDER THE PROVISIONS OF SEC. 254(2). 5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. 5.1 AS REGARDS THE TYPOGRAPHICAL MISTAKE IN PARA 19 OF THE IMPUGNED ORDER, IT IS APPARENT AND MANIFEST THAT THE LAST SENTE4NCE OF PA RA 19 IS INCONSISTENT WITH THE REASONING AND OBSERVATIONS OF THE TRIBUNAL ON THE I SSUE. WE QUOTE PARA 18 & 19 OF THE IMPUGNED ORDER OF THE TRIBUNAL AS UNDER: 18. WE FIND THAT CHENNAI C BENCH OF THE TRIBUNAL IN THE CASE OF OVERSEAS SANMAR FINANCIAL LTD., 86 LTD 602 (CHENNAI) CONSIDE RED A SIMILAR ISSUE, WHEREIN IT IS HELD AS FOLLOWS :- THE FACT AS IS EVIDENT FROM RECORD IS THAT THE LOAN THAT WAS TAKEN IN EARLIER YEARS WAS REPAID IN FULL IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR AND THIS RESULTED IN THE PAYMENT OF C HARGES LEVIED BY THE FINANCIAL INSTITUTIONS TO THE TUNE OF RS. 56,15 ,126. IT IS ALSO EVIDENT FROM THE RECORD THAT THE REDUCTION IN THE RATE OF INTEREST FOR FRESH LOANS TO BE ADVANCED BY THE FINANCIAL INSTITUTIONS LED THE ASSE SSEE-COMPANY TO PAY OFF THE ENTIRE LOAN THAT CARRIED THE BURDEN OF HIGHER RATE OF INTEREST. THE ASSESSEE APPARENTLY CALCULATED THE AMOUNT OF INTERES T, THAT II: WOULD BE MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 6 PAYING OVER THE YEARS AT THE AGREED RATE OF INTEREST A ND COMPARED IT WITH THE FORECLOSURE PREMIUM TOGETHER WITH THE INTER EST THAT IT WOULD PAY ON THE REVISED RATE BASIS AND FOUND IT TO BE ADVANT AGEOUS TO THE COMPANY BY PAYING THE FORECLOSURE PREMIUM. THIS ADVAN TAGE THAT THE COMPANY WANTED TO BENEFIT FROM IS CLEARLY A WELL-JUD GED BUSINESS DECISION AND, THEREFORE, IT IS LAID OUT WHOLLY FOR THE PURPOSES OF ITS BUSINESS. THIS ITSELF IS SUFFICIENT FOR ALLOWING THE CLAIM IN FULL IN THE YEAR IN WHICH IT WAS INCURRED. THE CLAIM FOR DEDUCTION FOR TH E ENTIRE AMOUNT OF FORECLOSURE PREMIUM IN THE ASSESSMENT YEAR IS JUSTI FIEDCIT VS. SIVAKAMI MILLS LTD. (1998) 144 CTR (SC) 172: (:1997) 227 ITR 465 (SC) AND CIT VS. MADRAS AUTO SERVICE (F) LTD. (1998) 148 CTR (SC) 398 : (1998) 233 ITR 469 (SC) RELIED ON. CONCLUSION: FORECLOSURE PREMIUM PAID TO FINANCIAL CO MPANY FOR PREMATURE PAYMENT OF LOAN WHICH WAS ADVANTAGEOUS TO T HE ASSESSEE, WAS ALLOWABLE IN FULL IN THE YEAR OF PAYMENT. 19. DELHI C BENCH OF THE TRIBUNAL IN THE CASE OF GUJARAT GUARDIAN LTD. (SUPRA) RELIED ON THE DECISION IN THE CASE OF OVERS EAS SANMAR FINANCIAL LTD. AND HELD THAT LUMP-SUM PREPAYMENT PREMIUM FOR RESTR UCTURING OF LOAN RESULTING IN DEDUCTION ON RATE OF INTEREST IS ALLOW ABLE AS INTEREST AND THAT SECTION 43B(D) ALSO PERMITS SUCH DEDUCTION OF PAYM ENT. RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORDER, WE ALLOW GROU ND NO. 3 OF THE REVENUE WHICH AROSE ONLY FOR A.Y. 2001-02. 5.2 THUS, IT IS CLEAR THAT GROUND NO.3 OF THE REVEN UES APPEAL WAS LIABLE TO BE DISMISSED IN VIEW OF THE DECISIONS AS REFERRED AND RELIED UPON BY THE TRIBUNAL. ACCORDINGLY, THERE IS AN APPARENT MISTAKE IN PARA 1 9 WHICH REQUIRES TO BE RECTIFIED AND HENCE, THE LAST SENTENCE OF PARA 19 OF THE IMPU GNED ORDER MAY BE READ AS UNDER: RESPECTFULLY FOLLOWING THE COORDINATE BENCH ORDER, WE DISMISS THE GROUND NO. 3 OF THE REVENUE WHICH AROSE ONLY FOR A.Y. 2001 -02. 6 NOW, WE TURN TO THE ISSUE OF DEPRECATION WHICH WA S ALLOWED BY THE COMMISSIONER OF INCOME TAX(APPEALS) BY TREATING THE EXCESS PAYMENT FOR ACQUIRING THE INTANGIBLE ASSETS LIKE LICENSES, KNOW-HOW, TRA DEMARKS, COAL LINKAGES, RAIL LINKAGES, BUSINESS RIGHTS ETC., AND VALUED ON ESTIMATED WORTH OF ` 157.95 CRORES. SINCE THE ASSESSEE FORFEITED A SUM OF ` . 20 CRORES WHICH HAS BEEN REDUCED BY THE ASSESSEE ITSELF, THE COMMISSIONER OF INCOME TAX(APPEALS) HAS ALSO DIVIDED THE SAID AMOUNT MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 7 EQUALLY AMONG ALLOWABLE INTANGIBLE ASSETS AND GOO DWILL AND THEREBY ALLOWED DEPRECIATION ON ` 147.95 CRORES. THE REMAINING AMOUNT OF ` 42.11 CRORE WAS HELD TO BE ON ACCOUNT OF PURE GOODWILL, WHICH IS NOT ENTITL ED TO DEPRECIATION. SINCE THE ASSESSEE HAS NOT CHALLENGED THE FINDING OF THE COMM ISSIONER OF INCOME TAX(APPEALS); THEREFORE, THE ISSUE BEFORE THE TRIBU NAL IN THE REVENUES APPEAL WAS ONLY WITH RESPECT TO THE DEPRECIATION ALLOWED BY TH E COMMISSIONER OF INCOME TAX(APPEALS) ON THE INTANGIBLE ASSETS TO THE EXTENT OF PAYMENT OF RS. 147.95 CRORES BY TREATING THE SAME FOR ACQUIRING THE INTANGIBLE ASSETS LIKE LICENSES, KNOW-HOW, TRADEMARKS, COAL LINKAGES, RAIL LINKAGES, BUSINESS RIGHTS ETC.,. THUS, THE TRIBUNAL WILE ADJUDICATING THE ISSUE HAS HELD IN PARAS 27 & 28 AS UNDER; 27. IT IS TRUE THAT THE NATURE OF PAYMENT HAS TO BE CONSIDERED AND TERMINO1OR USED IN THE BOOKS OF ACCOUNT DOES NOT DETERMINE THE AILOWABILITY OF CLAIM. HAVING SAID SO, WE FIND THAT THE ASSESSEE HAS MADE A VAGUE CLAIM. ON THE ONE HAND IT STATES THE EXCESS PAYMENT MADE, OVER AN D ABOVE THE VALUE OF TANGIBLE ASSET ACQUIRED, IS FOR LICENCES, QUOTAS, B USINESS RIGHTS ETC. AND WHEREAS ON THE OTHER HAND IT STATES THE EXCESS AMOUNT SHOULD BE TAKEN AS THAT PAID FOR FACTORS LIKE LOCATIONAL ADVANTAGE, CO NTRACTS WITH DEALERS AND CUSTOMERS ATTACHED TO THE BUSINESS ETC. THIS SECOND LIMB, IN OUR VIEW CANNOT BE A BUSINESS OR COMMERCIAL RIGHT BUT ONLY GOODWILL. WHILE STATING FACTS, ALTERNATE OR WITHOUT PREJUDICE STAND CANNOT BE TAKEN. THE ASSESSEE IS SUPPOSED TO KNOW EXACTLY THE PURPOSE FOR WHICH THE A MOUNT IS PAID. WHILE TANGIBLE ASSETS WERE VALUED, INTANGIBLE ASSETS WERE NOT VALUED IN THIS CASE. CONTACTS WITH THE CUSTOMERS, WITH DEALERS, LOCATION AL ADVANTAGE, RAIL LINKAGE ETC. WHEN VALUED, ARE GOODWILL AND NOT BUSINESS OR CO MMERCIAL RIGHT OF SIMILAR NATURE, IN OUR OPINION A SEPARATE VALUATION, ASSET-WI SE HAS TO BE UNDERTAKEN AND APPROPRIATE CONCLUSIONS DRAWN. WHILE LEARNED CIT(A ) CONCLUDED THAT ONLY ` 42.11 CRORES HAS TO BE HELD AS PAID ON ACCOUNT OF PURE GOODWILL, WHICH IS NOT ENTITLED TO DEPRECIATION, THE ASSESSING OFFIC ER WAS NOT GIVEN AN OPPORTUNITY TO EXAMINE THE FACTS AS PRESENTED BEFORE LEARNED CIT(A) SO AS TO EXPRESS HIS VIEW ON SUCH ASSESSEE HAS NOT CHALLENGE D THE FINDING OF LEARNED C1T(A) DEPRECIATION IS NOT ALLOWABLE ON GOODWILL. TH US, THIS ISSUE HAS FINALITY. THE ONLY ISSUE IS, TO DETERMINE THE VALUE OF INTANG IBLE OTHER THAN GOODWILL. 28. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE C ONSIDERED OPINION THAT THE ISSUE SHOULD BE SET ASIDE TO THE FILE OF THE ASSESS ING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. IN THE RESULT T HIS GROUND OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ISSUE ARISE S IN ALL THE THREE ASSESSMENT MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 8 YEARS IN QUESTION AND HENCE FOR ALL THE YEARS THIS I SSUE IS SET ASIDE TO THE TILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, DE-NOVA. 6.1 AS IT IS CLEAR FROM THE FINDING OF THE TRIBUNAL THAT THE ISSUE OF ALLOWABILITY OF DEPRECATION ON GOODWILL WAS NOT BEFORE THE TRIBUNAL AND CONSEQUENTLY, NO FINDING ON THIS ISSUE WAS EITHER REQUIRED OR GIVEN BY THIS TRIBUNAL. THIS TRIBUNAL HAS NOTED THAT THIS ISSUE HAS ATTAIN THE FINALITY AS THE ASSESSEE HAS NOT FILED AN APPEAL AGAINST THE FINDING OF THE COMMISSIONER OF INCOME TAX(APPEALS) WHEREBY CONCLUDED THAT THE AMOUNT PAID FOR GOODWILL IS NOT ENTITLED FOR DEPREC ATION. 6.2 IN THE REVENUES APPEAL, THE ISSUE BEFORE THE T RIBUNAL WAS TREATMENT OF THE PART EXCESS PAYMENT BY THE ASSESSEE AS MADE TOWARDS ACQUISITION OF INTANGIBLE ASSETS AND ALLOWING THE CLAIM OF DEPRECIATION TO TH AT EXTENT BY THE COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, THE ISSUE OF ALL OWABILITY OF DEPRECIATION TOWARDS GOODWILL WAS SETTLED AT THE LEVEL OF THE COMMISSION ER OF INCOME TAX(APPEALS) AND THEREFORE, THIS TRIBUNAL HAD NO OCCASION TO CONSID ER AND DECIDE THE SAME. 6.3 THERE IS NO QUARREL ON THE POINT THAT NON CONSI DERATION OF THE DECISION OF THE HONBLE SUPREME COURT AND THE JURISDICTIONAL HIGH COURT ON THE SAME ISSUE; EVEN THE SAID DECISIONS ARE SUBSEQUENT TO THE ORDER OF T HE TRIBUNAL AMOUNTS TO APPARENT ERROR CREPT IN THE ORDER OF THE TRIBUNAL REQUIRES T O BE RECTIFIED U/S 254(2) OF THE I T ACT. HOWEVER, AS IT IS MANIFEST FROM THE RECORDS THAT TH E TRIBUNAL HAS NOT GIVEN ANY FINDING ON THE ISSUE OF ALLOWABILITY OF DEPRECIATION ON THE PAYMENT MADE TOWARDS GOODWILL. THEREFORE, THE SUBSEQUENT DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF SMIFS SECURITIES LTD (SUPRA) AS WELL AS THE DECISIO N OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TAJ SATS AIR CATERING LTD (SU PRA) WOULD NOT TANTAMOUNT TO CREPT MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 9 AN ERROR APPARENT ON THE RECORD WHICH CAN BE RECTIF IED U/S 254(2). SINCE THE ISSUE ON ALLOWABILITY OF DEPRECIATION ON GOODWILL ON PRIN CIPLE WAS CONCLUDED AND SETTLED AT THE LEVEL OF THE COMMISSIONER OF INCOME TAX(APPE ALS) AND THE ASSESSEE HAS NOT CHALLENGED THE FINDING OF THE COMMISSIONER OF INCOM E TAX(APPEALS); THEREFORE, THE SAME HAS ATTAIN THE FINALITY. 6.4 THIS TRIBUNAL HAS SET ASIDE THE FACTUAL PART O F THE ISSUE RAISED BY THE REVENUE WITH RESPECT TO THE VALUATION OF THE INTANGIBLE ASS ETS ACQUIRED BY THE ASSESSEE AND THE COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN A FINDING THAT PART OF THE EXCESS PAYMENT MADE OVER AND ABOVE THE VALUATION OF TANGIBLE ASSETS ACQUIRED BY THE ASSESSEE IS ATTRIBUTABLE TO INTANGIBLE ASSETS L IKE LICENSES, KNOW-HOW, TRADEMARKS, COAL LINKAGES, RAIL LINKAGES, BUSINESS RIGHTS ETC., AND ESTIMATED THE COST OF THESE INTANGIBLE ASSETS AT ` 157.95 CRORES. SINCE THE INTANGIBLE ASSET HAS NOT BEEN VALUED AND THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ES TIMATED THE VALUE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO E XAMINE THE FACT; THEREFORE, THIS TRIBUNAL HAS OBSERVED THAT A SEPARATE ASSET-WISE VA LUATION HAS TO BE UNDERTAKEN. THUS, THE TRIBUNAL HAS DEALT WITH ONLY FACTUAL VA LUATION PART - OF THE INTANGIBLE ASSETS AND SET ASIDE THE SAME TO THE RECORD OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION DE-NOVO. 6.5 AS IT IS APPARENT FROM THE IMPUGNED ORDER OF T HIS TRIBUNAL THAT NO FINING ON THE ISSUE IN PRINCIPLE FOR ALLOWABILITY OF DEPRECIATION ON GOODWILL HAS BEEN GIVEN BY THIS TRIBUNAL; THEREFORE, WE DO NOT FIND ANY SUBSTANCE O R MERIT IN THE MISCELLANEOUS APPLICATIONS OF THE ASSESSEE THAT IN VIEW OF THE D ECISIONS OF THE HONBLE SUPREME MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 10 COURT AS WELL AS HIGH COURT ON THE ISSUE OF ALLOWA BILITY OF DEPRECIATION ON GOODWILL, THERE IS A MISTAKE CREPT IN THE ORDER OF THE TRIBUN AL, WHICH REQUIRES TO BE RECTIFIED. 6.6 THE ISSUE WITH RESPECT TO THE ALLOWABILITY OF D EPRECIATION OF INTANGIBLE ASSETS OTHER THAN GOODWILL HAS BEEN REMANDED TO THE RECOR D OF THE ASSESSING OFFICER FOR LIMITED PURPOSE OF VALUATION OF ASSETS, WHICH IS PU RELY ARITHMETICAL/COMPUTATION IN NATURE AND DOES NOT INVOLVE THE ISSUE OF ALLWOABILI TY OF DEPRECATION AS THE SAME HAS BEEN SETTLED BY THE COMMISSIONER OF INCOME TAX(APPE ALS) AND PRINCIPALLY CONFIRMED BY THIS TRIBUNAL TO THE EXTENT OF THE DEP RECIATION ALLOWABLE ON THE EXCESS PAYMENT MADE TOWARDS ACQUISITION OF INTANGIBLE ASSE TS OTHER THAN GOODWILL. 6.7 SINCE THE ISSUE HAS BEEN SET ISSUE BY THIS TRIB UNAL TO THE RECORD OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION DE-NOVO; T HEREFORE, THE ASSESSEE IS AT LIBERTY TO RELY UPON THE DECISION OF THE HONBLE SUPREME CO URT AS WELL AS HONBLE HIGH COURT BEFORE THE ASSESSING OFFICER. 6.8 IN VIEW OF THE ABOVE DISCUSSION, THE MISCELLANE OUS APPLICATIONS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001-02 IS PARTLY ALLOWED AND THOSE FOR ASSESSMENT YEAR 2004-05 AND 2006-07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 12 TH , DAY OF OCT 2012. SD/- SD/- ( N K BILLAIYA ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 12 TH , OCT 2012 MA NO.209 TO 211/MUM/2012 MA NOS.620 TO 622/MUM/2012 LAFARGE INDIA P LTD 11 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI