AMERICAN EXPRESS SERVICES INDIA P.LTD, V. ASST CIT 2(1),

MA 70/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2160 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 12-02-2014
• Court: TRIBUNAL
• Department Lawyers: B P K
• Keywords: Depreciation; Cost of acquisition
• Section: 32; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI VIJAY PAL RAO, JM MA NO.70/MUM/2014 (ARISING OUT OF CO NO.202/MUM/2009) (ASSESSMENT YEAR :2002-2003) M/S AMERICAN EXPRESS SERVICES INDIA LIMITED, MERCANTILE HOUSE, 1 ST FLOOR, 15 K.G. MARG, NEW DELHI-110 001 VS. ACIT, CIR-2(1), MUMBAI- 400 020 PAN NO. : AABCT 0555 D APP LICANT .. RESPONDENT ASSESSEE BY : SHRI RAJAN R. VORA REVENUE BY : SHRI B.P.K. PANDA DATE OF HEARING : 6 TH JUNE, 2014 DATE OF PRONOUNCEMENT : 6 TH JUNE, 2014 O R D E R PER R.C.SHARMA, AM : THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSE SSEE UNDER SECTION 254(2) OF THE I.T. ACT, ARISING OUT OF THE ORDER OF THE TRIBUNAL PASSED IN ITA NO.4106/MUM/2012 ALONG WITH C.O.NO.20 2/2009, DATED 3-2-2012. 2 . SHRI RAJAN R. VORA, APPEARED ON BEHALF OF THE ASS ESSEE AND CONTENDED THAT THE TRIBUNAL VIDE ITS ORDER DATED 3- 2-2012 DISPOSED OF THE REVENUES APPEAL AS WELL AS CROSS OBJECTION FIL ED BY THE ASSESSEE, HOWEVER, GROUNDS NO.6 & 7 RAISED BY THE ASSESSEE IN CROSS OBJECTION WITH REGARD TO VALUATION OF GOODWILL AND DEPRECIATI ON ON GOODWILL WAS NOT ADJUDICATED BY THE TRIBUNAL, WHICH AMOUNTS TO M ISTAKE APPARENT FROM RECORD. LEARNED AR FURTHER ARGUED THAT THE TRI BUNAL HAD NOT ADJUDICATED GROUND RELATING TO COST OF ACQUISITION OF GOODWILL I.E. VALUE TO BE TAKEN AT RS.8 CRORES, WHICH AMOUNTS TO MISTAK E APPARENT FROM RECORD. THEREFORE, IT NEEDS TO BE RECONSIDERED ON T HE BASIS OF FACTS MA NO.70/2014 2 AVAILABLE ON RECORD. WITH REGARD TO THE CLAIM OF DE PRECIATION AS PER GROUND NO.7 RAISED IN THE CROSS OBJECTION FILED BY THE ASSESSEE, LEARNED AR INVITED OUR ATTENTION TO THE FOLLOWING O BSERVATION OF THE TRIBUNAL AT PARA 10, WHEREIN CLAIM OF DEPRECIATION ON GOODWILL WAS DECLINED :- THE ASSESSEE HIMSELF TAKEN THE GROUND, NO SPECIFIC ARGUMENTS WERE ADVANCED BEFORE US. IN ANY CASE, ONCE THE ASSE SSEE HAS HIMSELF ACCEPTED THIS PAYMENT AS GOODWILL SIMPLICIT OR, THERE CANNOT BE ANY GOOD REASON TO UPHOLD THE ADMISSIBILI TY OF DEPRECIATION THEREON. WE, THEREFORE, REJECT THE GRI EVANCE OF THE ASSESSEE AS WELL. AS PER LEARNED AR, THE ISSUE WITH REGARD TO ALLOWA BILITY OF DEPRECIATION ON GOODWILL HAS BEEN DECIDED IN FAVOUR OF THE ASSES SEE BY THE HONBLE SUPREME COURT IN THE CASE OF SMIFS SECURITIES PVT. LTD., 348 ITR 302 (SC), ORDER DATED 22-8-2012 . HE FURTHER RELIED ON THE ORDER OF HONBLE APEX COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. , (2008) 305 ITR 227 (SC) IN SUPPORT OF THE PROPOSITION THAT JUDICIAL DECISION ACTS RETROSPECTIVELY AND THE DOCTRINE OF PROSPECTIVE OVERRULING IS EXCEPTION TO THE GENERA L RULE. ACCORDINGLY, IT WAS CONTENDED THAT DECLINE OF CLAIM OF DEPRECIATION ON GOODWILL BY TRIBUNAL WAS NOT CORRECT AND IN VIEW OF SUBSEQUENT DECISION OF THE HONBLE SUPREME COURT, THE SAME AMOUNTS TO A MISTAK E APPARENT FROM RECORD. 3 . ON THE OTHER HAND, LEARNED DR CONTENDED THAT THER E IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL WITHIN THE MEA NING OF SECTION 254(2) OF THE ACT. MA NO.70/2014 3 4 . WE HAVE CONSIDERED RIVAL CONTENTIONS, GONE THROUG H THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE AS WELL AS ORDER OF THE TRIBUNAL. WE FOUND THAT THE TRIBUNAL VIDE ITS ORDER DATED 3-2-2012 DISPOSED OF THE REVENUES APPEAL IN ITA NO.4106/MUM /2007 AND CROSS OBJECTION FILED BY THE ASSESSEE BEARING CO NO .202/MUM/2009. IN THE CROSS OBJECTION, GROUNDS NO.6 & 7 WERE PERTA INING TO VALUATION OF GOODWILL AND CLAIM OF DEPRECIATION ON GOODWILL. WE FOUND THAT ISSUE WITH REGARD TO VALUATION OF GOODWILL HAS NOT BEEN D ECIDED BY THE TRIBUNAL, THEREFORE, IT AMOUNTS TO MISTAKE APPARENT FROM THE RECORD. ACCORDINGLY, WE RECALL GROUND NO.6 FOR DECIDING AFR ESH BY THE TRIBUNAL. GROUND NO.7 WITH REGARD TO CLAIM OF DEPRECIATION O N GOODWILL, WE FOUND THAT THIS GROUND OF ASSESSEE WAS DISMISSED BY TRIBUNAL. HOWEVER, SUBSEQUENTLY, HONBLE SUPREME COURT IN THE CASE OF SMIFS SECURITIES PVT. LTD (SUPRA) HAS HELD THAT GOODWILL IS AN INTANGIBLE ASSET WITHIN THE MEANING OF SECTION 32 OF THE ACT AND ELIGIBLE FOR DEPRECIATION. SINCE THE ISSUE OF CLAIM OF DEPRECIAT ION ON GOODWILL HAS BEEN DECIDED BY THE HONBLE APEX COURT IN THE CASE OF SMIFS SECURITIES PVT. LTD (SUPRA) IN ASSESSEES FAVOUR, THEREFORE, THE CONTRARY DECISION TAKEN BY THE TRIBUNAL AMOUNTS TO MISTAKE APPARENT FROM RECORD, IN VIEW OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA). ACCORDINGLY, WE RECALL THIS GROUND OF CROSS OBJECTION ALSO FOR DECI DING AFRESH. THE REGISTRY IS DIRECTED TO ISSUE NOTICE TO BOTH THE PA RTIES AND FIX THE CASE FOR HEARING ON 7 TH JULY, 2014 . MA NO.70/2014 4 5 . IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN THE TERMS INDICATED HEREINAB OVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH JUNE,2014. SD/- ( VIJAY PAL RAO ) SD/- ( R.C.SHARMA ) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI ; DATED: 06/06/2014 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) ! ' ! ' ! ' ! ' , / ITAT, MUMBAI 1. #$ / THE APPELLANT 2. %#$ / THE RESPONDENT. 3. & ( ) / THE CIT(A), MUMBAI. 4. & / CIT 5. '() ! , ! ' , / DR, ITAT, MUMBAI 6. )*+ , / GUARD FILE. % //TRUE COPY//