J.K Cement Ltd., Kanpur V. Dy. Commissioner of Income Tax-6, Kanpur

MA 24/LKW/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2359 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 08-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S K GARG SHRI P K KAPOOR
• Keywords: Depreciation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER M.A. NO.24 /LKW/20 14 (ARISING OUT OF I.T.A.NO.497/LKW/2010) ASSESSMENT YEAR:2005 - 06 & M.A. NO.25 /LKW/20 14 (ARISING OUT OF I.T.A.NO.498/LKW/2010) ASSESSMENT YEAR:2006 - 97 J.K. CEMENT LTD. KAMLA TOWER, DWARIKADHEESH ROAD, KANPUR. PAN:ABCJ0355R VS. DY.C.I.T. - 6, KANPUR. (A PPLICANT ) (RESPONDENT) APPLICANT BY SHRI S. K. GARG, ADVOCATE SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI MANOJ KUMAR GUPTA, CIT, D.R. DATE OF HEARING 13/06/2014 DATE OF PRONOUNCEMENT 07 /0 8 /2014 O R D E R PER A. K. GARODIA, A.M. BOTH THESE MISC. APPLICATIONS HAVE BEEN FILED BY THE ASSESSEE ALLEGING CERTAIN APPARENT MISTAKES IN THE COMBINED TRIBUNAL ORDER DATED 28/02/2014 FOR ASSESSMENT YEAR 2005 - 06 & 2006 - 07. THE CONTENTS OF THESE MISC. APPLICATIONS ARE IDENTICAL AND THE ARGUMENT S WERE ALSO IDENTICAL FROM BOTH THE SIDES BECAUSE THE ISSUE INVOLVED IN BOTH THESE CASES IS ONE AND SAME. THE MISTAKES ALLEGED BY THE ASSESSEE AND THE ASSESSEES PRAYER ARE AS PER PARA 7 TO 11 OF THE MISC. APPLICATION NO. 24/LKW/2014, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: [ 2 ] 7. WHILE DECIDING THE REVENUE'S APPEAL, THE HON'BLE ITAT HAS HELD, TO THE EFFECT THAT, 'WHILE THE COST OF FIXED ASSET AT THE TIME OF ACQUISITION WAS RS.567.62 CRORES, IT WAS NOT UNDERSTANDABLE AS TO HOW THE SAID F IGURE COULD GO UP TO RS.575.05 CRORES FOR THE PURPOSES OF DEPRECIATION,' WHILE HOLDING SO, THE HON'BLE ITAT HAS MISSED TO NOTE THAT THE VALUE OF FIXED ASSET AT RS.567.62 CRORES HAD BEEN WORKED OUT AS ON 4.11.2004 WITH REFERENCE TO THE CONSIDERATION AMOUNTI NG TO RS.467.95 CRORES PAID BY THAT TIME, WHEREAS THE ENHANCEMENT IN COST TO RS.575.05 CRORES BY A SUM OF RS.7.43 CRORES REPRESENTED THE VALUE OF SHARES AMOUNTING TO RS.7,42,69,500/ - AS HAD BEEN ALLOTTED IN FAVOUR OF THE SHAREHOLDERS OF JKSL ON 10.3.2005. THE FACT NOT IN DISPUTE AT ANY OF THE STAGES BELOW. 8. FURTHER, THE CONTROVERSY (AT ALL STAGES BELOW, WHICH WAS RAISED BY THE REVENUE IN APPEAL ALSO BEFORE THE HON'BLE TRIBUNAL) WAS AS TO WHETHER ASSESSEE'S CLAIM FOR DEPRECIATION ON A SUM OF RS.7,42,69,50 0/ - REPRESENTING THE FACE VALUE OF SHARES ALLOTTED BY JKCL TO THE SHAREHOLDERS OF JKSL AND ACCOUNTED FOR AS 'GOODWILL' WAS ADMISSIBLE OR NOT. MOST HUMBLY IT IS STATED THAT THIS CONTROVERSY REMAINS UNDECIDED/UNADJUDICATED UPON BY THE HON'BLE TRIBUNAL IN TER MS OF THE ORDER DATED 28.02.2014. 9. FROM THE AFORESAID IT FOLLOWS THAT REVENUE'S APPEAL ITSELF AS PER THE GROUNDS OF APPEAL TAKEN BY IT BEFORE THE TRIBUNAL CANNOT BE SAID TO HAVE BEEN DECIDED. SUCH AN OMISSION ITSELF IS A MISTAKE WITHIN THE MEANING OF SE CTION 254(2) OF THE ACT. 10. IN ANY CASE AS PER PARA 8 OF THE ORDER DATED 28.02.2014 (UNDER REFERENCE HERE) 'APPEALS OF THE REVENUE ARE ALLOWED.' THIS MEANS THAT THE ORDERS OF THE ID. CIT(A) FOR THE ASSESSMENT YEARS 2005 - 06 ON THE ISSUE OF ASSESSEE'S CLAI M FOR DEPRECIATION ON ENHANCED COST AS REPRESENTED BY GOODWILL AMOUNTING TO RS.7,42,69,500/ - (WHICH WAS THE SOLE ISSUE BEFORE HIM) HAS BEEN REVERSED WITHOUT RECORDING ANY FINDING AS TO IN WHAT MANNER THE CIT(A) HAS ERRED WHILE GIVING RELIEF TO THE ASSESSEE /RESPONDENT ON THIS SCORE. THEREFORE, RECTIFICATION IS CALLED FOR IN THIS RESPECT. [ 3 ] PRAYER 11. AS THE MISTAKES AS REFERRED TO ABOVE ARE APPARENT FROM RECORDS AND ARE IN THE AMBIT OF SECTION 254 (2) OF THE ACT, IT IS RESPECTFULLY PRAYED THAT YOUR HONOURS BE PLEASED TO PASS AN APPROPRIATE ORDER RECALLING AND/OR MODIFYING THE ORDER DATED 28.02.2014 PASSED IN ITA NO.497/LKW/2010 SO THAT ASSESSEE'S CLAIM FOR DEPRECIATION OF RS.94,27,541/ - ON THE ENHANCED COST OF FIXED ASSETS (BY A SUM OF RS.7,42,69,500/ - ), AS HAD BEEN ALLOWED BY THE ID. CIT(A), KANPUR VIDE HIS ORDER DATED 07.05.2010, BE UPHELD AND THE REVENUE'S APPEAL BE DISMISSED. 2. LEARNED A.R. OF THE ASSESSEE MADE ELABORATE SUBMISSIONS BEFORE US IN COURSE OF HEARING BUT THESE CONTENTIONS WERE SAME AS HAVE BEEN RAISED BY THE ASSESSEE IN THE MISC. APPLICATION, AS PER PARA 7 TO 11 REPRODUCED ABOVE. 3. IN ADDITION TO THOSE CONTENTIONS, IT WAS ALSO SUBMITTED BY LEARNED A.R. OF THE ASSESSEE BEFORE US THAT ON PAGE NO. 58 & 59 OF THE PAPER BOOK IS DEPRECIATION CHA RT (ORIGINAL AND REVISED). HE ALSO SUBMITTED THAT SCHEDULE - 4 TO THE BALANCE SHEET REGARDING FIXED ASSETS IS APPEARING ON PAGE NO. 43 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT IN PARA XX OF ANNEXURE TO THE AUDITORS REPORT APPEARING ON PAGE NO. 39 OF THE P APER BOOK , IT IS REPORTED BY THE AUDITOR S THAT THE ASSESSEE COMPANY HAS ISSUED 74,26,950 EQUITY SHARES OF RS.10/ - EACH TO THE EQUITY SHAREHOLDERS OF J.K. SYNTHETICS LIMITED BY DEBIT TO GOODWILL ACCOUNT IN COMPLIANCE OF THE STIPULATION OF SCHEME APPROVED BY AAIFR IN THE MATTER OF J.K. SYNTHETICS LIMITED. HE ALSO SUBMITTED THAT ON PAGE NO. 8 TO 10 OF MISC. APPLICATION NO. 24/LKW/2014 ARE REPRODUCTION OF PARA 3,7 & 8 OF THE ASSESSMENT ORDER AND FROM THE SAME , IT CAN BE SEEN THAT THIS ISSUE WAS VERY MUCH DISCUSSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE COMPANY HAS ISSUE D SHARES TO THE SHAREHOLDERS OF J.K. SYNTHETICS LIMITED WORTH RS.7,42,69,500/ - IN RESPECT OF GOODWILL ON WHICH DEPRECIATION WAS [ 4 ] CLAIMED BY THE ASSESSEE AND THIS ASPECT WAS NOT CONSIDERED BY THE TRIBUNAL IN THE IMPUGNED ORDER AND THEREFORE, THERE IS APPAREN T MISTAKE IN THE TRIBUNAL ORDER. RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: ( I ) ASSISTANT COMMISSIONER OF INCOME - TAX VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. [2008] 305 ITR 227 ( II ) COMMISSIONER OF INCOME - TAX VS MOOL CHAND SHYAM LAL [2005] 273 IT R 160 (ALL) ( III ) HONDA SIEL POWER PRODUCTS LTD. VS COMMISSIONER OF INCOME - TAX [2007] 295 ITR 466 (SC) ( IV ) OMEGA SPORTS AND RADIO WORKS VS COMMISSIONER OF INCOME - TAX [1982] 134 ITR 28 (ALL) ( V ) COMMISSIONER OF INCOME - TAX VS K.M. SUGAR MILLS (P.) LTD. [2005] 275 ITR 247 (ALL) ( VI ) LACHMAN DASS BHATIA HINGWALA (P.) LTD. VS ASSISTANT COMMISSIONER OF INCOME - TAX [2011] 330 ITR 243 ( VII ) LAXMI ELECTRONIC CORPORATION LTD. VS COMMISSIONER OF INCOME - TAX [1991] 188 ITR 398 (ALL) ( VIII ) CIT VS. I.T.A.T. [2010] 322 ITR 360 (BOM) 4. HE ALSO SUBMITTED THAT THE DISPUTE AT ASSESSMENT STAGE WAS ONLY WHETHER DEPRECIATION IS ALLOWABLE ON GOODWILL OR NOT AND THIS ISSUE HAS NOT BEEN DECIDED BY THE TRIBUNAL AS PER IMPUGNED ORDER. HENCE, THERE IS APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH SHOULD BE RE CTIFIED. 5. AS AGAINST THIS, IT WAS SUBMITTED BY LEARNED D.R. OF THE REVENUE THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER AND HENCE, THERE IS NO MERIT IN THESE MISC. APPLICATIONS OF THE ASSESSEE. HE ALSO SUBMITTED THAT NO DEPRECIATION WAS CLAIMED BY THE ASSESSEE ON GOODWILL AND THIS CAN BE SEEN FROM THE DEPRECIATION CHART AVAILABLE ON PAGE NO. 58 & 59 OF THE PAPER BOOK. HE PLAC ED RELIANCE ON THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF STEEL CONTAINERS LTD. VS COMMISSIONER OF INCOME - TAX [1978] 112 ITR 995 (CAL) . [ 5 ] 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MISC. APPLICATIONS FILED BY THE ASSESSEE. WE FIND THAT THE ISSUE IN DISPUTE WAS DECIDED BY THE TRIBUNAL AS PER PARA 7 OF ITS ORDER, WHICH IS REPRODUCED BELOW: 7. WE HAVE CONSIDERED THE RIVAL SUBMI SSIONS. AS REQUIRED BY THE BENCH IN THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED A COPY OF BALANCE SHEET AS ON 04.11.2004 WITH FIGURES OF ASSETS AND LIABILITIES ON THAT DATE BEING PRE ACQUISITION AND POST ACQUISITION. AS PER THE SAM E, PRE ACQUISITION FIXED ASSETS WERE NIL AND POST ACQUISITION FIXED ASSETS ARE SHOWN AT RS. 56762.41 LACS AND CAPITAL WORK IN PROGRESS AT RS. 1423.60 LACS. DEPRECIATION IS NOT ALLOWABLE ON CAPITAL WORK IN PROGRESS. SO, MAXIMUM DEPRECIATION ALLOWABLE IS ON ASSETS OF RS. 56762.41 LACS. AS PER ORIGINAL CHART OF DEPRECIATION AVAILABLE ON PAGE 58 OF THE PAPER BOOK, DEPRECIATION IS CALCULATED ON ASSETS OF RS. 567,62,40,544.27 WITH AMOUNT OF DEPRECIATION OF RS. 72,32,58,987. BUT ON PAGE 59 F THE PAPER BOOK IN THE REVISED DEPRECIATION CHART, THE ASSESSEE HAS TAKEN THE VALUE OF ASSET AT RS. 575,05,10,044.63 WITH AMOUNT OF DEPRECIATION OF RS. 73,26,86,528.73. WE FAIL TO UNDERSTAND THAT WHEN AS PER THE BALANCE SHEET, THE VALUE OF POST ACQUISITION ASSETS IS SHOWN AT RS. 56762.41 LACS, HOW IT CAN GO UP FOR DEPRECIATION PURPOSE. THEREFORE, IN OUR CONSIDERED OPINION, MAXIMUM DEPRECIATION ALLOWABLE IS ON ASSETS OF RS. 56762.41 LACS, WHICH IS ALREADY ALLOWED BY THE A.O. ALSO. EXTRA DEPRECIATION ALLOWED BY THE LEARNED CIT (A) IS NOT SUSTAINABLE IN VIEW OF THE FACTS OF THE PRESENT CASE AS DISCUSSED ABOVE. SINCE OUR DECISION IS ON THE BASIS OF THE FACTS OF THE PRESENT CASE AND THE A.O. HAS ALLOWED THE MAXIMUM DEPRECIATION ALLOWABLE ON THE POST ACQUISITION ASSETS AS PER BALANCE SH EET SUBMITTED BEFORE US. THE JUDGMENTS CITED BY BOTH SIDES HAVE NO RELEVANCE IN THE FACTS OF THE PRESENT CASE. HENCE, THE ORDER OF LEARNED CIT (A) IS REVERSED ON THIS ISSUE AND THAT OF THE A.O. IS RESTORED IN BOTH YEARS. 6.1 FROM THE ABOVE PARA OF THE T RIBUNAL ORDER, IT IS SEEN THAT IT IS NOTED BY THE TRIBUNAL THAT THE BENCH REQUIRED THE ASSESSEE IN THE COURSE OF HEARING TO SUBMIT COPY OF BALANCE SHEET AS ON 04.11.2004 WITH FIGURES OF ASSETS AND LIABILITIES ON THAT DATE BEING PRE ACQUISITION AND POST ACQUISITION. [ 6 ] IN BOTH THESE MISC. APPLICATIONS, NO MISTAKE IS POINTED OUT BY THE ASSESSEE IN THIS OBSERVATION OF THE TRIBUNAL. THEREAFTER, IT IS NOTED BY THE TRIBUNAL IN THE SAME PARA OF THE TRIBUNAL ORDER THAT THE ASSESSEE HAS FILED SUCH BALANCE SHEET AND AS PER THE SAME, PRE ACQUISITION F IXED ASSETS WERE NIL AND POST ACQUISITION FIXED ASSETS ARE SHOWN AT RS. 56762.41 LACS AND CAPITAL WORK IN PROGRESS AT RS. 1423.60 LACS. THEREAFTER, THE TRIBUNAL HAS NOTED THAT THE D EPRECIATION IS NOT ALLOWABLE ON CAPITAL WORK IN PROGRESS AND THEREFORE, MAXIMUM DEPRECIATION ALLOWABLE IS ON ASSETS OF RS. 56762.41 LACS. NO MISTAKE HAS BEEN ALLEGE D IN THESE NOTINGS OF THE TRIBUNAL ALSO IN THESE TWO MISC. APPLICATIONS OR IN THE ARGUMENTS OF LEARNED A.R. OF THE ASSESSEE BEFORE US. THEREAFTER, IT IS NOTED BY THE TRIBUNAL THAT A S PER ORIGINAL CHART OF DEPRECIATION AVAILABLE ON PAGE 58 OF THE PAPER BOO K, DEPRECIATION IS CALCULATED ON ASSETS OF RS. 567,62,40,544.27 WITH AMOUNT OF DEPRECIATION OF RS. 72,32,58,987. THEREAFTER, IT IS NOTED THAT ON PAGE 59 O F THE PAPER BOOK IN THE REVISED DEPRECIATION CHART, THE ASSESSEE HAS TAKEN THE VALUE OF ASSET S AT RS . 575,05,10,044.63 WITH AMOUNT OF DEPRECIATION OF RS. 73,26,86,528.73. AFTER NOTING THESE FIGURES, IT IS OBSERVED BY THE TRIBUNAL THAT W E FAIL TO UNDERSTAND THAT WHEN AS PER THE BALANCE SHEET, THE VALUE OF POST ACQUISITION ASSETS IS SHOWN AT RS. 56762.41 L ACS, HOW IT CAN GO UP FOR DEPRECIATION PURPOSE. THIS IS ALSO NOTED BY THE TRIBUNAL THAT MAXIMUM DEPRECIATION ALLOWABLE IS ON ASSETS OF RS. 56762.41 LACS, WHICH IS ALREADY ALLOWED BY THE A.O. ALSO AND E XTRA DEPRECIATION ALLOWED BY THE LEARNED CIT (A) IS NO T SUSTAINABLE IN VIEW OF THE FACTS OF THE PRESENT CASE . WE DO NOT FIND ANY MISTAKE IN THIS FINDING OF THE TRIBUNAL IN PARA 7 OF THE IMPUGNED ORDER BECAUSE WE HAVE EXAMINED AGAIN FROM THE DEPRECIATION CHARTS AVAILABLE ON PAGE NO. 58 & 59 OF THE PAPER BOOK AND IN THE SAME , WE FIND THAT IN THE ORIGINAL DEPRECIATION CHART AVAILABLE ON PAGE NO. 58, THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 72,32,58,987 / - AND IN THE REVISED DEPRECIATION CHART AVAILABLE ON PAGE NO. 59 OF THE PAPER BOOK, THE [ 7 ] ASSESSEE HAS CLAIM ED DEPRECIATION OF RS. 73,26,86,528.73 ON TOTAL ASSETS OF RS. 575,05,10,044.63 . ON PAGE NO. 59 OF THE PAPER BOOK ALSO, THERE IS NO ITEM APPEARING IN THE LIST OF ASSETS UNDER THE HEAD GOODWILL. THE ASSETS ON WHICH DEPRECIATION HAS BEEN CLAIMED BY THE ASSE SSEE AS PER PAGE NO. 59 OF THE PAPER BOOK ARE BUILDING, PLANT & MACHINERY AND OTHER ASSETS BEING ARMS AND AMMUNITION ETC. THE ASSESSEE ALSO INCLUDED IN THE LIST OF ASSETS FREE HOLD LAND AND LEASE HOLD LAND ALTHOUGH NO DEPRECIATION HAS BEEN CLAIMED ON TH ESE TWO ASSETS. THIS GOES TO SHOW THAT THE ASSESSEE ITSELF HAS NOT CLAIMED ANY DEPRECIATION ON GOODWILL EVEN AS PER REVISED DEPRECIATION CHART AVAILABLE ON PAGE NO. 59 OF THE PAPER BOOK. 6.2 REGARDING THE SCHEDULE OF FIXED ASSETS IN THE BALANCE SHEET, AVAILABLE ON PAGE NO. 43 OF THE PAPER BOOK, WE FIND THAT THIS INCLUDES GOODWILL OF RS.742.70 LAC BUT SINCE NO DEPRECIATION HAS BEEN CLAIMED BY THE ASSESSEE EVEN AS PER REVISED DEPRECIATION CHART, THE SCHEDULE OF FIXED ASSETS AS PER AUDITED BALANCE SHEET IS NOT RELEVANT FOR THE PURPOSE OF COMPUTING DEPRECIATION TO THE ASSESSEE BECAUSE DEPRECIATION HAS TO BE ALLOWED AS PER INCOME TAX RULES AND THE ASSESSING OFFICER OR CIT(A) OR THE TRIBUNAL CANNOT INCLUDE A NEW ITEM OF ASSET FOR THE PURPOSE OF ALLOWING DEPREC IATION FOR WHICH NO DEPRECIATION HAS BEEN CLAIMED BY THE ASSESSEE IN THE DEPRECIATION CHART SUBMITTED BY THE ASSESSEE BECAUSE DEPRECIATION IS ALLOWABLE NOT ON MERE ACQUISITION OF AN ASSET BUT ON ACTUAL USE OF THE ASSET FOR BUSINESS PURPOSE AND WHEN THE ASS ESSEE IS NOT CLAIMING DEPRECIATION ON GOODWILL, HOW THE AUTHORITIES BELOW OR THE TRIBUNAL CAN HOLD THAT GOODWILL WAS ACQUIRED AND USED ALSO AND HENCE DEPRECIATION IS ALLOWABLE . HERE, IT IS VERY IMPORTANT TO NOTE THAT THE BALANCE SHEETS BOTH PRE ACQUISITION AND POST ACQUISITION AS ON 4.11.2004 WAS FILED BEFORE THE TRIBUNAL BY THE LEARNED AR OF THE ASSESSEE ON SPECIFIC DIRECTION OF THE TRIBUNAL AND IT WAS FOUND BY THE TRIBUNAL THAT ON TOTAL ASSETS SHOWN IN THAT POST ACQUISITION BALANCE SHEET, [ 8 ] DEPRECIATION WAS ALLOWED BY THE A.O. AND THE EXTRA CLAIM OF DEPRECIATION IS FOR THE ASSETS WHICH IS IN EXCESS OF TOTAL ASSETS AS PER THIS BALANCE SHEET. IT IS ALSO IMPORTANT TO NOTE THAT IN A BALANCE SHEET, ALL ASSETS ARE INCLUDED AS ON THE DATE OF THE BALANCE SHEET EVEN IF PAYMENT FOR SUCH ASSET IS NOT YET MADE BECAUSE THE BALANCE CONTAINS THE LIABILITY ALSO FOR SUCH UNPAID ASSET AND HENCE, IF AN ASSET IS NOT APPEARING IN A BALANCE SHEET, IT MEANS, IT WAS NOT ACQUIRED. WHEN THE FINDING OF THE TRIBUNAL IN THE IMPUGNED ORDE R IS IN LINE WITH THIS BALANCE SHEET, HOW IT CAN BE SAID THAT THERE IS ANY APPARENT MISTAKE IN THE TRIBUNAL ORDER. 6.3 REGARDING CLAUSE NO. XX OF ANNEXURE TO AUDITORS REPORT APPEARING ON PAGE NO. 39 OF THE PAPER BOOK, WE FIND THAT AS PER THIS CLAUSE, TH IS FACT IS COMING OUT THAT THE ASSESSEE COMPANY HAS ISSUED 74,26,950 EQUITY SHARES OF RS.10/ - EACH TO THE EQUITY SHAREHOLDERS OF J.K. SYNTHETICS LIMITED BY DEBIT TO GOODWILL ACCOUNT IN COMPLIANCE OF STIPULATION OF THE SCHEME APPROVED BY AAIFR IN THE MATTER OF J.K. SYNTHETICS LIMITED BUT WHEN SUCH GOODWILL IS NOT INCLUDED IN THE LIST OF FIXED ASSETS AS PER DEPRECIATION CHART (REVISED) AVAILABLE ON PAGE NO. 59 OF THE PAPER BOOK, AND ALSO IN THE POST ACQUISITION BALANCE SHEET AS ON 4.11.2004, HOW DEPRECIATION CAN BE ALLOWED ON SUCH GOODWILL BECAUSE IT IS THE DUTY OF THE ASSESSEE TO BRING EVIDENCE ON RECORD TO SHOW AS TO HOW THE DEPRECIATION IS ALLOWABLE ON THE ASSETS ON WHICH THE ASSESSEE IS CLAIMING DEPRECIATION. WHEN THE ASSESSEE HAS NOT INCLUDED THE ITEM GO ODWILL IN THE DEPRECIATION CHART, IT IS APPARENT THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE FOR CLAIMING DEPRECIATION ON GOODWILL AND THEREFORE, NO DEPRECIATION CAN BE ALLOWED ON GOOD WILL IN THE FACTS OF THE PRESENT CASE. REGARDING PARA 3 ,7 AND 8 OF THE ASSESSMENT ORDER, REPRODUCED BY THE ASSESSEE ON PAGE NO. 8 TO 10 OF THE MISC. APPLICATION, WE FIND THAT IN PARA 7 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS REPRODUCED THE RELEVANT PORTION OF THE ASSESSEES [ 9 ] REPLY DATED 04/12/2007 SU BMITTED BEFORE THE ASSESSING OFFICE. PARA 3 OF ITS REPLY AS APPEARING ON PAGE NO. 9 OF THE MISC. APPLICATION, IS REPRODUCED BELOW BECAUSE IT IS RELEVANT FOR DECIDING THE PRESENT MISC. APPLICATIONS: 3. THE ASSESSEE COMPANY SUBMITS THAT THE AFORESAID RS.7 .43 CRORES FORMS PART OF PURCHASE CONSIDERATION AND, THEREFORE, DEPRECIATION IS ALLOWABLE ON IT AND THEREFORE THE SAME HAS BEEN ALLOCATED AMONGST VARIOUS ASSETS IT ACQUIRED FROM J.K. SYNTHETICS LIMITED. 6.3.1 FROM THE ABOVE PARA OF THE ASSESSEES SUBMISSIONS BEFORE THE ASSESSING OFFICER, WE FIND THAT EVEN FROM THE ASSESSEES SUBMISSION, IT COMES OUT THAT THE ASSESSEE IS CLAIMING DEPRECIATION ON SHARES ISSUED OF RS.7.43 CRORES, WHICH HAS BEEN ALLOCATED AMONG VARIOUS ASSETS ACQUIRE D FROM J.K. SYNTHETICS LIMITED. WE FAIL TO UNDERSTAND AS TO HOW DEPRECIATION CAN BE ALLOWED ON SHARES ISSUED BY THE ASSESSEE ONLY BECAUSE THE SAME HAS BEEN ALLOCATED BY THE ASSESSEE AMONG VARIOUS ASSETS. AGAIN IN PARA 6 OF THE WRITTEN SUBMISSIONS, FILED BY THE ASSESSEE AS APPEARING ON PAGE NO. 9, IT IS STATED BY THE ASSESSEE THAT THE AMOUNT OF SHARES IS NOTHING BUT PART OF CONSIDERATION THE ASSESSEE COMPANY HAS PAID FOR ACQUIRING THE ASSETS. IT IS ALSO RELEVANT TO MENTION THAT AS PER THE ASSESSEE , THESE SHARES WERE ISSUED FOR MAKING PAYMENT OF CONSIDERATION BY THE ASSESSEE COMPANY TO J.K. SYNTHETICS LIMITED. IF THAT IS THE CASE THEN IT IS INCLUDED IN THE VALUE OF ASSETS SHOWN BY THE ASSESSEE IN THE BALANCE SHEET AS ON 04/11/2004 (POST ACQUISITION). IN T HIS BALANCE SHEET SUBMITTED BY THE ASSESSEE BEFORE THE TRIBUNAL ON SPECIFIC REQUIREMENT OF THE TRIBUNAL , THE TOTAL FIXED ASSETS WERE SHOWN AT RS.56,762.41 LAC IN ADDITION TO CAPITAL WORK IN PROGRESS OF RS.1,432.60 LAC AND DEPRECIATION HAS BEEN ALLOWED BY T HE ASSESSING OFFICER ON THESE TOTAL ASSETS OF RS.5,676.41 LAC AND THEREFORE, IT IS SEEN THAT ON TOTAL ASSETS ACQUIRED BY THE ASSESSEE FROM J.K. SYNTHETICS LIMITED, DEPRECIATION HAS BEEN ALLOWED BY THE ASSESSING OFFICER AND AS PER THE [ 10 ] ASSESSEE ITSELF, THESE SHARES OF RS.7.43 CRORES ISSUED BY THE ASSESSEE COMPANY TO THE SHAREHOLDERS OF J.K. SYNTHETICS LIMITED WERE NOTHING BUT A PART OF CONSIDERATION OF ASSETS. WHEN THE ASSESSING OFFICER HAS ALLOWED DEPRECIATION ON THE TOTAL ASSETS EX CLUDING WORK IN PROGRESS ACQUIRED BY THE ASSESSEE COMPANY FROM J.K. SYNTHETICS LIMITED AND THE SHARES ISSUED BY THE ASSESSEE COMPANY IS NOTHING BUT PART OF CONSIDERATION PAID BY THE ASSESSEE COMPANY FOR ACQUIRING THE ASSETS, HOW DEPRECIATION IS ALLOWABLE IN RESPECT OF THE SAME SH ARES SEPARATELY ALSO. 7. AS PER THE ABOVE DISCUSSION, WE FIND THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER AS ALLEGED BY THE ASSESSEE. 8. NOW IN THE LIGHT OF ABOVE DISCUSSION, WE EXAMINE THE APPLICABILITY OF VARIOUS JUDGMENTS CITED B Y LEARNED A.R. OF THE ASSESSEE. 8.1 THE FIRST JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME - TAX VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA). AS PER THIS JUDGMENT, IT WAS HELD BY HON'BLE APEX COURT THAT IF THE JUDGMENT OF JURISDICTIONAL HIGH COURT WAS NOT CONSIDERED BY THE TRIBUNAL BECAUSE THE SAME WAS NOT BROUGHT TO THE NOTICE OF THE TRIBUNAL, IT IS A MISTAKE APPARENT FROM RECORD WHI CH REQUIRED RECTIFICATION. IN THE PRESENT CASE, IT IS NOT THE ALLEGATION OF THE ASSESSEE THAT ANY JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT WAS NOT CONSIDERED BY THE TRIBUNAL FOR ANY REASON AND HENCE, IN OUR CONSIDERED OPINION, THIS JUDGMENT OF HON'BL E APEX COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE IN THE FACTS OF THE PRESENT CASE. 8.2 THE SECOND JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS MO OL CHAND SHYAM LAL (SUPRA). IN THIS [ 11 ] CASE , IT IS HELD BY HON'BLE ALLAHABAD HIGH COURT THAT IF THE FACTS OF A PARTICULAR CASE HAVE BEEN RECORDED INCORRECTLY OR SOME ERROR HAS CREPT IN, WHICH DOES NOT REQUIRE ANY DEBATE AND IS APPARENT ON THE RECORD, SUCH A M ISTAKE CAN BE CORRECTED IN EXERCISE OF POWERS UNDER SECTION 254(2) OF THE ACT. THERE IS NO QUARREL ON THIS PROPOSITION BUT IN THE PRESENT CASE, THE LEARNED A.R. OF THE ASSESSEE COULD NOT POINT OUT THAT ANY FACT HAS BEEN RECORDED BY THE TRIBUNAL INCORRECTL Y OR SOME ERROR HAS CREPT IN THE FACTS RECORDED BY THE TRIBUNAL AND, THEREFORE, IN THE PRESENT CASE, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE. 8.3 THE THIRD JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS COMMISSIONER OF INCOME - TAX (SUPRA). IN THIS CASE, IT IS NOTED BY HON'BLE SUPREME COURT THAT IN THAT CASE , THE JUDGMENT RENDERED IN THE CASE OF SAMTEL COLOR LTD. WAS CITED BEFORE THE TRIBUNAL BUT THROUGH OVERSIGHT , IT HAD MISSED OUT THE SAID JUDGMENT WHILE DISMISSING THE APPEAL FILED BY THE ASSESSEE ON THE QUESTION OF ADMISSIBILITY/ALLOWABILITY OF THE CLAIM OF THE ASSESSEE FOR ENHANCED DEPRECIATION UNDER SECT ION 43A OF THE ACT. UNDER THESE FACTS, IT WAS HELD BY HON'BLE APEX COURT THAT WHEN THE PREJUDICE HAS BEEN CAUSED TO ONE PARTY WHICH IS ATTRIBUTABLE TO THE TRIBUNAL MISTAKE, ERROR OR OMISSION AND WHICH ERROR IS A MANIFEST ERROR THEN THE TRIBUNAL WOULD BE J USTIFIED IN RECTIFYING ITS MISTAKE, WHICH HAS BEEN DONE IN THAT CASE. IN THE PRESENT CASE, THERE IS NO SUCH ALLEGATION THAT ANY JUDGMENT CITED BEFORE THE TRIBUNAL WAS NOT CONSIDERED BY IT. HENCE, THIS JUDGMENT OF HON'BLE APEX COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE. 8.4 THE FOURTH JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF OMEGA SPORTS AND RADIO WORKS VS COMMISSIONER OF INCOME - TAX (SUPRA). IN THAT [ 12 ] CASE, IT WAS HELD BY H ON'BLE ALLAHABAD HIGH COURT THAT IF ANY ISSUE IS COVERED BY THE JUDGMENT OF JURISDICTIONAL HIGH COURT THEN ONLY BECAUSE SOME OTHER HIGH COURT HAS TAKEN A DIFFERENT VIEW, IT CANNOT BE SAID BY THE AUTHORITIES WITHIN THE JURISDICTION OF JURISDICTIONAL HIGH CO URT THAT THE ISSUE IS DEBATABLE AND THEREFORE, IT CANNOT BE RECTIFIED U/S 254 (2) OF THE ACT. IN THE PRESENT CASE , THIS IS NOT THE CASE OF THE ASSESSEE THAT THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY ANY JUDGMENT OF HONBLE JURISDICTIONA L HIGH COURT AND THE TRIBUNAL HAS DECIDED IT OTHERWISE ON THE BASIS OF JUDGMENT OF OTHER HIGH COURT AND THEREFORE, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE. 8.5 THE FIFTH JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS K.M. SUGAR MILLS (P.) LTD. (SUPRA). IN THAT CASE , IT IS NOTED BY HON'BLE ALLAHABAD HIGH COURT THAT IT IS NOT IN DISPUTE THAT GROUND NOS. 2,3 AND 4 SET OUT IN THE MEMORANDUM OF APPEAL HAVE NOT BEEN ADJUDICATED UPON BY THE TRIBUNAL. UNDER THESE FACTS, IT WAS HELD BY HON'BLE ALLAHABAD HIGH COURT THAT THE FAILURE OF THE TRIBUNAL TO DECIDE THESE THREE GROU NDS IS A MISTAKE APPARENT FROM THE RECORD AND THEREFORE, THE TRIBUNAL WAS PERFECTLY JUSTIFIED IN RECALLING THE ORDER U/S 254(2) OF THE ACT. IN THE PRESENT CASE, THIS IS NOT THE CLAIM OF THE ASSESSEE THAT ANY GROUND RAISED BY THE ASSESSEE WAS NOT DECIDED B Y THE TRIBUNAL AND HENCE, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE. 8.6 THE SIXTH JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF LACHMAN DAS S BHATIA HINGWALA (P.) LTD. VS ASSISTANT COMMISSIONER OF INCOME - TAX (SUPRA). THIS JUDGMENT OF HON'BLE DELHI HIGH COURT IS BY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF HONDA SIEL POWER [ 13 ] PRODUCTS LTD. VS COMMISSIONER OF INCOME - TAX [2007] 295 ITR 466. THE HON'BLE DELHI HIGH COURT HAS ALSO REFERRED TO THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME - TAX VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. WE HAVE ALREADY DISCUSSED AND SEEN THAT BOTH THE SE JUDGMENT S ARE NOT APPLICABLE IN THE PRESENT CASE. THE RATIO LAID DOWN BY HON'BLE DELHI HIGH COURT IS THE SAME THAT NO PARTY SHOULD BE PREJUDICE D BY THE MISTAKE OF THE COURT. THERE IS NO QUARREL ON THIS PROPOSITION BUT WE HAVE SEEN THAT IN THE PRESEN T CASE , THERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL AND HENCE, THIS JUDGMENT OF HON'BLE DELHI HIGH COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE. 8.7 THE SEVENTH JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF LAXMI ELECTRONIC CORPORATION LTD. VS COMMISSIONER OF INCOME - TAX (SUPRA). WE FIND THAT THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THAT CASE , IT WAS HELD BY HON'BLE ALLAHABAD HIGH COURT THAT THE FAILURE TO DEAL WITH A PRELIMINARY OBJECTION RELATING TO MAINTAINABILITY OF THE APPEAL ON THE GROUND OF LIMITATION AMOUNT TO AN ERROR APPARENT ON THE FACE OF THE RECORD. IN THE PRESENT CA SE, THERE IS NO SUCH ALLEGATION AND HENCE, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE. 8.8 THE EIGHTH JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. I.T.A.T. (SUPRA). IN THAT CASE , IT WAS NOTED BY HON'BLE BOMBAY HIGH COURT THAT THE QUESTION BEFORE THE TRIBUNAL WAS NOT REGARDING THE TAXABILITY OF RS.92,09,480/ - AND THEREFORE, THERE WAS NO QUESTION OF ASSESSING THE SAID AMOUNT AS LEASE R ENTAL OR OTHERWISE IN THE ASSESSMENT YEAR 1998 - 99. IT WAS ALSO NOTED THAT THE QUESTION BEFORE THE TRIBUNAL WAS WHETHER THE AMOUNT OF RS.92,09,480/ - WHICH WAS ALREADY TAXED ON ACCRUAL BASIS IN THE EARLIER ASSESSMENT YEAR COULD BE ALLOWED AS DEDUCTION U/S 3 6(1)(VII) OF THE [ 14 ] ACT ON THE GROUND THAT THE SAID AMOUNT HAD BECOME BAD AND THE ASSESSEE HAS WRITTEN OFF THE SAID AMOUNT IN ITS ACCOUNTS AS NOT RECOVERABLE. UNDER THESE FACTS, IT WAS HELD BY HON'BLE BOMBAY HIGH COURT THAT THE TRIBUNAL WAS JUSTIFIED IN RECTI FYING THE APPARENT ERROR ON THE FACE OF THE RECORD. THE FACTS IN THE PRESENT CASE ARE TOTALLY DIFFERENT AND THEREFORE, THIS JUDGMENT OF HON'BLE BOMBAY HIGH COURT IS NOT RENDERING ANY HELP TO THE ASSESSEE. 9. WE HAVE SEEN THAT NONE OF THE JUDGMENTS CITED B Y THE LEARNED AR OF THE ASSESSEE IS RENDER ING ANY HELP TO THE ASSESSEE. WE WOULD LIKE TO MAKE IT CLEAR THAT IN THE PRESENT CASE , THE LEARNED A.R. OF THE ASSESSEE COULD NOT POINT OUT ANY APPARENT MISTAKE IN THE TRIBUNAL ORDER AND THEREFORE, THESE MISC. APP LICATIONS ARE HAVING NO MERIT. 10. NOW WE DISCUSS THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT CITED BY LEARNED D.R. OF THE REVENUE RENDERED IN THE CASE OF STEEL CONTAINERS LTD. VS COMMISSIONER OF INCOME - TAX [1978] 112 ITR 995 (CAL) . IN THAT CASE , IT WAS HELD BY HON'BLE CALCUTTA HIGH COURT THAT THOUGH THE POWERS OF THE TRIBUNAL MAY BE SAID TO BE LIMITED TO THE SUBJECT MATTER OF THE APPEAL BEFORE IT BUT THE TRIBUNAL IS COMPETENT TO PASS SUCH ORDERS ON APPEAL AS IT THINKS FIT. IT WAS ALSO HELD THAT T HERE IS NOTHING IN THE ACT WHICH RESTRICTS THE TRIBUNAL TO THE DETERMINATION OF THE QUESTIONS RAISED BEFORE THE DEPARTMENTAL AUTHORITY. IT WAS ALSO HELD THAT A LL QUESTIONS WHETHER OF LAW OR OF FACTS, WHICH RELATED TO THE ASSESSMENT OF THE ASSESSEE MIGHT B E RAISED BEFORE THE TRIBUNAL. IT WAS HELD THAT THE TRIBUNAL CAN UPHOLD THE DISALLOWANCE UNDER ANOTHER SECTION. IN THE PRESENT CASE, THE TRIBUNAL IN THE IMPUGNED ORDER HAS UPHELD THE DISALLOWANCE OF DEPRECIATION ON THE BASIS THAT THE ASSESSING OFFICER HAS ALREADY ALLOWED THE DEPRECIATION IN RESPECT OF TOTAL ASSETS WHICH THE ASSESSEE HAS ACQUIRED AS PER THE ASSETS SHOWN BY THE ASSESSEE IN THE BALANCE SHEET AS ON 04/11/2004 (POST ACQUISITION) AND, THEREFORE, NO EXTRA DEPRECIATION OVER AND ABOVE THESE [ 15 ] ASSETS I S ALLOWABLE TO THE ASSESSEE. THE BASIS OF DISALLOWANCE BY THE ASSESSING OFFICER MAY BE DIFFERENT BUT STILL SUCH DISALLOWANCE CAN BE UPHELD BY THE TRIBUNAL ON THE BASIS THAT SINCE THE ASSESSING OFFICER HAS ALLOWED DEPRECIATION ON THE TOTAL ASSETS ACQUIRED BY THE ASSESSEE COMPANY POST ACQUISITION, NO MORE DEPRECIATION IS ALLOWABLE TO THE ASSESSEE OVER AND ABOVE THE DEPRECIATION ALREADY ALLOWED BY THE ASSESSING OFFICER. HENCE, THERE IS NO APPARENT MISTAKE IN THE DECISION OF THE TRIBUNAL. IN VIEW OF ABOVE DI SCUSSION, WE HOLD THAT THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER AND, THEREFORE, THERE IS NO MERIT IN THESE MISC. APPLICATIONS OF THE ASSESSEE. 11. IN THE RESULT, THE MISC. APPLICATIONS OF THE ASSESSEE STAND DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 07 /0 8 /2014. *C.L.SINGH COPY OF THE O RDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A ) 5. DR, ITAT, LUCKNOW ASSTT. REGISTRAR