Deputy Commissioner of Income-tax, Pune V. M/s. Chemetall Rai India Ltd., Pune

MA 44/PUN/2022

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Circle-1(1), Pune as the applicant and M/s. Chemetall Rai India Ltd. as the respondent. The dispute arose from an order dated 18-12-2018 by the Income Tax Appellate Tribunal, Pune, concerning the assessment year 2009-10. The main issue was the allowance of depreciation on technical know-how acquired by the assessee, which was effective from 31-03-2009, after the close of the financial year. The Tribunal had previously directed the AO to verify the use of this technical know-how in manufacturing during the relevant year to determine the depreciation allowance.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137798 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-02-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 17-10-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 207

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘B’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER Miscellaneous Application No.44/PUN/2022 (arising out of ITA No.1720/PUN/2016) Assessment Year : 2009-10 DCIT, Circle-1(1),Pune Vs. M/s. Chemetall Rai India Ltd., Gat No.569, Village Koregaon Bhima, Pune Nagar Road, Tal. Shirur, Pune 412 207 PAN : AAACP2287P (Applicant) (Respondent) आदेश / ORDER PER R.S.SYAL, VP : This Miscellaneous Application has been moved by the Revenue against the order dated 18-12-2018 passed by the Tribunal u/s.254(1) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2009-10. 2. The ld. DR contended that the Tribunal noted in para no.8 of its order that the assessee paid Rs.7.27 crore and the TPO in the revised remand report determined Arm’s Length Price (ALP) of the international transaction of purchase of technical know-how at Rs.6.07 crore. He argued that the ld. CIT(A) disallowed the Assessee by: Shri R.D. Onkar Revenue by: Shri Suhas Kulkarni Date of hearing 17-02-2023 Date of pronouncement 20-02-2023 M.A.No.44/PUN/2022 M/s. Chemetall Rai India Ltd., 2 depreciation on the ground that the agreement was entered into by the assessee on 21-04-2009, i.e. after close of the year though it was effective from 31-03-2009, but the Tribunal gave direction to allow such depreciation subject to certain verification. 3. The Tribunal in para no.9 of its order has discussed the determination of the ALP of the international transaction and thereafter in para no.14 espoused the question as to whether any disallowance of depreciation could have been made. It noted the arguments of the ld. AR that the assessee manufactured MPP products with the help of such new technical know-how during the year. In the absence of any positive evidence with the ld. AR during the course of hearing showing the use of new technical know-how, the Tribunal remitted the matter to the file of the AO to allow depreciation on technical know-how after verification. The verification has also been clarified in the order itself that if some goods were found to be manufactured by using such technical know-how acquired from Chemetall Corporation, USA during the year under consideration, then depreciation should be allowed. If, on the other hand, the contention of the assessee was not found to be correct, then the direction was not to allow depreciation. M.A.No.44/PUN/2022 M/s. Chemetall Rai India Ltd., 3 4. We fail to appreciate any reason for grievance by the AO because the matter has been sent back to him to consider if the technical know-how was actually used for manufacturing the products. It is only if his determination on the point leads to the conclusion that the technical know-how was used that he will allow depreciation and vice-versa. In view of the above facts and the decision of the Tribunal, we are satisfied that there is no mistake, much less a mistake apparent from record in the order, requiring any rectification. 5. In the result, the Miscellaneous Application is dismissed. Order pronounced in the Open Court on 20 th February, 2023. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 20 th February, 2023 सतीश M.A.No.44/PUN/2022 M/s. Chemetall Rai India Ltd., 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. The Pr. CIT-5, Pune DR, ITAT, ‘B’ Bench, Pune 5. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 17-02-2023 Sr.PS 2. Draft placed before author 20-02-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *