FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) P.LTD, MUMBAI V. DCIT RG 6(3)(1), MUMBAI

MA 219/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2515 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS JOTHI LAKSHMI NAYAKLD DR
• Assessee Lawyers: MADHUR AGARWALLD
• Keywords: Depreciation; Opportunity of being heard; Capital expenditure

Judgement Text

1 MA NO.219/MUM/2019 ARISING OUT OF ITA NO.1597/MUM/2017 M/S. FRANKLIN TEMPLETON ASSET MANAGEMENT (I) PVT.LT D. ASSESSMENT YEAR-2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM MISCELLANEOUS APPLICATION NO.219/MUM/2019 [ARISING OUT OF I.T.A. NO. 1597/MUM/2017] ( / ASSESSMENT YEAR: 2011-12) FRANKLIN TEMPLETON ASSET MANAGEMENT (INDIA) PRIVATE LTD. 12 TH & 13 TH FLOOR INDIABULLS FINANCE CENTRE TOWER-2, SENAPATI BAPAT MARG ELPHINSTONE(W), MUMBAI-400 013. / VS. DY. COMMISSIONER OF INCOME TAX RANGE-6-(3)(1) ROOM NO.506, 5 TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ./ ./PAN/GIR NO. AAACT-1609-B ( /APPELLANT ) : ( / RESPONDENT ) !'# / APPELLANT BY : SHRI MADHUR AGARWAL-LD.AR !' # / RESPONDENT BY : MRS. JOTHI LAKSHMI NAYAK-LD. DR $ %!'&' / DATE OF HEARING : 21/06/2019 () !'&' / DATE OF PRONOUNCEMENT : 21/06/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. BY WAY OF THIS MISCELLANEOUS APPLICATION FOR ASS ESSMENT YEAR [AY] 2011-12, OUR ATTENTION HAS BEEN DRAWN TO THE FACT T HAT GROUND NO.2 OF THE 2 MA NO.219/MUM/2019 ARISING OUT OF ITA NO.1597/MUM/2017 M/S. FRANKLIN TEMPLETON ASSET MANAGEMENT (I) PVT.LT D. ASSESSMENT YEAR-2011-12 QUANTUM APPEAL HAS NOT BEEN ADJUDICATED IN TRIBUNAL S ORDER ITA NO.1597/MUM/2017 PASSED ON 05/09/2018. UPON PERUSAL , WE CONCUR WITH THE SAID SUBMISSIONS AND ACCORDINGLY, PROCEED TO AD JUDICATE THE SAME ON MERITS. THE LD. AR HAS SUBMITTED THAT THE SAME IS O NLY CONSEQUENTIAL IN NATURE AND THEREFORE, WOULD ONLY REQUIRE CERTAIN DI RECTIONS FROM US. 2. GROUND NO. 2 READS AS UNDER: - GROUND NO.2: NON-ALLOWANCE OF DEPRECIATION ON CERTA IN ASSETS 2.1. THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING THE LEARNED AO TO GRANT THE ELIGIBLE DEPRECIATION ON CERTAIN ITEMS OF REVENUE EXPENDITUR E RECLASSIFIED BY THE LEARNED AO AS CAPITAL EXPENDITURE PERTAINING TO AY 2002-03, AY 20 03-04 AND AY 2005-06. 2.2. THE LEARNED CIT(A) ERRED IN NOT DIRECTING THE LEARNED AO TO ALLOW THE DIFFERENTIAL DEPRECIATION ON CERTAIN ITEMS OF COMPUTER PERIPHERA LS ORIGINALLY CLASSIFIED AS COMPUTERS BY THE APPELLANT BEING RECLASSIFIED AS PLANT AND MA CHINERY BY THE LEARNED AO BEING SUBJECT TO LOWER RATE OF DEPRECIATION AT 25%/15% FO R AY 2005-06 AND AY 2009-10.' 3.1 THE LD. AR HAS PLEADED THAT WHILE FRAMING ASSES SMENT FOR AYS 2002- 03, 2003-04 AND 2005-06, CERTAIN REVENUE ITEMS WERE CONSIDERED TO BE CAPITAL IN NATURE BY THE DEPARTMENT AND DEPRECIATIO N WAS ALLOWED THEREUPON. THE SAID TREATMENT WAS ACCEPTED BY THE A SSESSEE IN THOSE YEARS. CONSEQUENTLY, THE ASSESSEE IS ENTITLED FOR C ONSEQUENTIAL DEPRECIATION ON THE WRITTEN DOWN VALUE [WDV] OF THE SAID ASSETS IN THE YEAR UNDER CONSIDERATION. 3.2 SIMILARLY, WHILE FRAMING ASSESSMENT FOR AYS 200 5-06 & 2009-10, LD. AO RECLASSIFIED CERTAIN ITEMS FROM COMPUTER PERIPHE RALS (ELIGIBLE FOR DEPRECIATION @60%) TO PLANT AND MACHINERY (ELIGIBLE FOR LOWER DEPRECIATION @25%/15%) WHICH WAS ALSO ACCEPTED BY THE ASSESSEE. ACCORDINGLY, LOWER DEPRECIATION WAS ALLOWED TO THE ASSESSEE IN THOSE Y EARS. CONSEQUENTLY, THE 3 MA NO.219/MUM/2019 ARISING OUT OF ITA NO.1597/MUM/2017 M/S. FRANKLIN TEMPLETON ASSET MANAGEMENT (I) PVT.LT D. ASSESSMENT YEAR-2011-12 ASSESSEE IS ENTITLED TO CONSEQUENTIAL DEPRECIATION ON THE WDV OF THE SAID ASSETS IN THE YEAR UNDER CONSIDERATION. 3.3 THE LD. DR FAIRLY SUBMITTED THAT THE FACTUAL MA TRIX MAY BE VERIFIED BY LD. AO. 4. KEEPING IN VIEW THE SUBMISSIONS, WHILE PRIMA-FACIE CONCURRING WITH ASSESSEES CLAIM, WE DEEM IT FIT TO RESTORE THE MAT TER BACK TO THE FILE OF LD. AO TO VERIFY THE FACTUAL MATRIX AND GRANT CONSEQUEN TIAL DEPRECIATION TO THE ASSESSEE AS SUBMITTED BEFORE US. THE ASSESSEE IS DI RECTED TO SUBSTANTIATE HIS STAND AND PROVIDE REQUISITE INFORMATION / DETAI LS. NEEDLESS TO ADD THAT REASONABLE OPPORTUNITY OF BEING HEARD SHALL BE GRAN TED TO THE ASSESSEE. 5. GROUND NO.2 STAND ALLOWED FOR STATISTICAL PURPOS ES. THE QUANTUM APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. THE MISCELLANEOUS APPLICATION STAND ALLOWED IN TERMS OF OUR ABOVE ORD ER. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/06/2019 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT 3. %% ( ) / THE CIT(A) 4. %% / CIT CONCERNED 5. & '# ( , % ( , / DR, ITAT, MUMBAI 6. ' *+, / GUARD FILE 4 MA NO.219/MUM/2019 ARISING OUT OF ITA NO.1597/MUM/2017 M/S. FRANKLIN TEMPLETON ASSET MANAGEMENT (I) PVT.LT D. ASSESSMENT YEAR-2011-12 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.