FRANKLIN TEMPLETON MANAGEMENT (INDIA) P.LTD., MUMBAI V. DY CIT -RANGE-6(3)(1), MUMBAI

MA 343/MUM/2023

AI Insights

The case involves Franklin Templeton Management (India) P. Ltd., which filed a miscellaneous application under section 254(2) of the Income-tax Act, 1961, concerning the disallowance of depreciation on goodwill amounting to \\u20b9 1,47,05,938 for the assessment year 2016-17. The coordinate bench had previously allowed depreciation on goodwill in the assessee's own cases for earlier years but remanded the issue back to the Assessing Officer for the current year. The assessee argued that this was an error and that the Tribunal should have directed the Assessing Officer to allow depreciation for the assessment year in question, citing precedents and judicial support for their application. The Tribunal agreed with the assessee, directing the Assessing Officer to allow depreciation and correcting the assessment year mentioned in the order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113049 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 07-09-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 26-04-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN BEND E
• Keywords: Depreciation
• Section: 254(2); 20

Judgement Text

11I N THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI RAHUL CHAUDHARY, JM MA N o. 34 3/ Mu m / 20 23 A ri si n g o ut o f I TA 20 46/ M u m/ 2 02 0 (Ass essm ent Y ea r 2 016-17) F r a n k l i n T e m p l e t o n M a n a g e m e n t ( I n d i a ) P . L t d . 12 th & 1 3 th f l o o r , I n d i a B u l l s F i n a n c e C e n t e r , T o w e r–2, S e n a p a t i B a p a t M a r g , E l p h i n s t o n e ( W ) , M u m b a i-4 0 0 0 1 3 Vs . Dy . CI T–Ra ng e 6 (3 )(1 ) Room no.50 6, 5 th F l oor, Aay ak a r Bha va n, M.K. road , M umb a i-4 00 02 0 (Applicant) (Respondent) PAN No. AAACT1609B Assessee by : Shri F a rooq I ra ni, AR Revenue by : Shri H .M . Bhatt & Shri Arun Bend e, D Rs D ate of h e ari ng : 08.09 .20 23 Date of pronouncement : 11.0 9.2023 O R D E R PER PRASHANT MAHARISHI, AM: 01. This Miscellaneous Application is filed under section 254(2) of the Income- tax Act, 1961 (the Act), arising out of the order of the coordinate bench dated 18 th October, 2022, for A.Y. 2016-17. 02. As per Miscellaneous Application, the assessee states that while deciding ground No. 1 of the appeal of the assessee regarding disallowance of claim of depreciation on goodwill amounting to ₹ 1,47,05,938/- , it was stated that though claim of depreciation on goodwill is allowed by the coordinate bench in assessee’s own case for A.Y. 2005-06, 2010-11 and 2011 – 12. Therefore, for this year only the consequential depreciation is to be allowed on the opening WDV of the block of intangible asset comprising of goodwill. It was further stated that revenue did not challenge before Hon'ble High Page | 2 MA No. 343/Mum/2023 Franklin Templeton Management (India) P. Ltd; A.Y. 16-17 Court for A.Y. 2010-11 that whether goodwill is arising. Despite this, in paragraph number 13-14, 15 and 17 the coordinate bench has recorded the orders of the coordinate bench for earlier years. However, in paragraph no. 19, the coordinate bench has sent back the issue to the file of the learned Assessing Officer for fresh adjudication. Therefore, it is submitted that the coordinate bench has committed an error in remanding the matter back to the file of the Assessing Officer for adjudication. In fact, tribunal should have directed ld AO to allow depreciation for Assessment year. For A.Y. 2010-11, the Tribunal has allowed the claim of the depreciation and learned AO is directed only for quantification of depreciation on goodwill. Accordingly, direction was requested. 03. The assessee in Miscellaneous Application relied upon the several judicial precedents supporting its miscellaneous application. 04. It further stated that the coordinate bench at paragraph number 4, 13, 15 and 17 of the order has inadvertently quoted the A.Y. 2000-2011 against the correct A.Y. of 2010-11. Therefore, there is a mistake apparent on record, which is required to be rectified. 05. The learned authorized representative reiterated what is submitted in the miscellaneous application. 06. The learned departmental representative opposed the miscellaneous application. 07. On careful consideration of the rival arguments placed before us, it is clear that when in earlier year the revenue has not disputed that whether goodwill is arising in the appellant’s case and allowability of consequent depreciation on the same, we are of the view that assessee is entitled to depreciation on the opening written down value of the intangible asset i.e. goodwill. Therefore, we direct the learned assessing officer to grant depreciation to the assessee on the opening written down value of the goodwill for the present year i.e. A.Y. 2016 – 17. 08. Further, inadvertently the assessment year mentioned in paragraph number 4, 13, 15 and 17 as A.Y. 2000-11, may be replaced as 2010– 11. 09. In the result, the miscellaneous application of the assessee is allowed. Page | 3 MA No. 343/Mum/2023 Franklin Templeton Management (India) P. Ltd; A.Y. 16-17 Order pronounced in the open court on 11.09. 2023. Sd /- Sd /- (RAHUL CHAUDHARY) (P RASH ANT M AH ARI SHI ) (JUDI CI AL M EM BER) (AC COUN T AN T M EM BER) Mumbai, Dated: 11.09. 2023 Sudip Sarkar, Sr.PS/Dragon Page | 4 MA No. 343/Mum/2023 Franklin Templeton Management (India) P. Ltd; A.Y. 16-17 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai