BRITANNIA BEL FOODS PRIVATE LIMITED,KOLKATA vs. DEPUTY COMMISSION OF INCOME TAX, CIRCLE 7(1), KOLKATA, KOLKATA

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ITA 1470/KOL/2026Status: DisposedITAT Kolkata24 August 2026AY 2018-196 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that depreciation on intangible assets is allowable as per previous rulings in the assessee's own case. Regarding the interest income, it was noted that the AO had rectified the double taxation error under Section 154.

What were the facts?

The assessee claimed depreciation on intangible assets like technical know-how and marketing infrastructure, which was disallowed by the AO and confirmed by the CIT(A). Separately, interest income was initially taxed twice in the computation sheet, leading to an erroneous addition.

What were the issues?

Whether depreciation on acquired intangible assets is allowable. Whether an erroneous double taxation of interest income in the computation sheet warrants rectification.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Akkal Dudhwewala, AR
For Respondent: Shri Santanu Ghosh, DR
Hearing: 20.07.2026Pronounced: 24.08.2026

Per Rajesh Kumar, AM:

These are appeals preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] even dated 26.02.2026 for the AY 2017-18 & 2018-19.

ITA No. 1469/KOL/2026 2. The sole grievance in this appeal relates to the disallowance of depreciation on WDV of the intangible assets comprising of technical knowhow, marketing infrastructure, non-compete fees etc. amounting to Rs.54,96,567/-.

ITA Nos.1469 & 1470/KOL/2026 Britannia Bel Foods Pvt. ltd.; A.Y. 2017-18 & 2018-19 2.1. The facts of the case are that the assessee is a private limited company which is carrying on the business of marketing, distribution & sale of value-added dairy products. Pursuant to Business Transfer Agreement dated 22.03.2002 the assessee had purchased dairy business of Britannia Industries Limited (BIL). Under the said Business Transfer Agreement (BTA) the appellant had purchased intangible rights relating to dairy products for consideration specified therein. The intangible rights purchased inter alia included know how, marketing infrastructure, goodwill etc. The consideration for each of the intangible right was clearly defined in the Business Transfer Agreement and the same was paid to BIL. Besides, BIL also entered into a Non-Compete Agreement on 22.03.2002 in terms of which BIL agreed not to carry on competing dairy business. For accepting the Non-Compete Covenant separate and distinct consideration was paid. In respect of the intangible rights, privileges and assets acquired in terms of the BTA dated 22.03.2002 the appellant claimed depreciation u/s 32(1)(ii) of the Act. In the income tax assessments for A.Ys. 2003-04 to 2009-10, the assessee’s claim for depreciation on the actual cost/WDV of the intangible assets was disallowed by the AO. On appeal by the assessee, the CIT(A) directed the AO to allow depreciation of intangible assets as claimed by the assessee, which was upheld by this Tribunal vide order dated 19.02.2018 in ITA Nos.2678-2682, 6308 & 6592/Mum/2012. For the relevant AY 2017-18, the assessee had filed return of income admitting total income of Rs.33,37,76,640/-. The AO observed that, the assessee had been claiming depreciation on these intangible assets since 2003-04 and that his predecessors had rejected the claim. Though the claim of the assessee was Page | 2

ITA Nos.1469 & 1470/KOL/2026 Britannia Bel Foods Pvt. ltd.; A.Y. 2017-18 & 2018-19 allowed by the appellate authorities, in order to maintain a consistent stand, the AO disallowed the depreciation on the intangible assets and added it back to the total income of the relevant year.

2.2. In the appellate proceedings, the Ld. CIT(A) confirmed the action of the AO and upheld the disallowance.

2.3. After hearing the rival contentions and perusing the materials available on record, we find that this issue is no longer res-integra. We observe that, the issue of disallowance of depreciation on intangible acquired by the assessee and the same has been allowed by this Tribunal in assessee’s own case for AY 2011-12 in ITA No.1113/Kol/2016 dated 01.03.2018 by holding as under:-

5.

At the time of hearing of the appeal it was brought to our notice that the issue of disallowance of depreciation on intangible acquired by the assessee was the subject matter of dispute from A.Y.2003-04 to 2009-10 between the assessee and the department. The Hon’ble ITAT in ITA Nos.2678 to 2682/Mum/2012 and 6592/Mum/2012 for A.Y.2003-04 to 2009-10 considered the issue by its order dated 19.02.2018 and ultimately came to the conclusion that there was a genuine business transfer agreement and that the residual value after allocation of values to the various assets was treated as good will and that the valuation done by the valuers was proper. The tribunal further placed reliance on the decision of the Hon’ble Supreme Court in the case of CIT vs Snifs Securities Ltd. 348 ITR 302 (SC) came to the conclusion that the transfer of intangible such a good will is allowable u/s 32(1)(ii) of the Income Tax Act, 1961 (Act). The Tribunal also came to the conclusion that the acquisition of knowhow , payment for acquisition of marketing infrastructure, payment of consideration of non-composite fee and payment of acquisition of good will would all be payment for acquiring intangible assets and the assessee would be eligible for depreciation on acquisition cost of such intangible assets. In view of the decision of the tribunal referred to above we find no merits in this appeal raised by the revenue. 2.4. Following the above, we direct the AO to allow the depreciation on intangible assets, as claimed by the assessee in the return of income, and thus delete the disallowance.

ITA Nos.1469 & 1470/KOL/2026 Britannia Bel Foods Pvt. ltd.; A.Y. 2017-18 & 2018-19 3. The appeal of the assessee is allowed.

ITA No. 1470/KOL/2026 4. The only issue involved in this appeal relates to the action of the Ld. CIT(A) confirming the addition of interest income of Rs.4,59,27,580/-.

4.1. The facts of the case are that the assessee is a private limited company which is carrying on the business of marketing, distribution & sale of value-added dairy products. The assessee had filed return of income on 30.09.2018 admitting total income of Rs.41,13,79,600/-. The case of the assessee was selected for scrutiny. Notices u/s 143(2) and 142(1) of the Act was issued, which was complied with by the assessee. The assessment was completed u/s 143(3) vide order dated 09.03.2021 assessing total income as per the return of income at Rs.41,13,79,600/-. It was noticed by the assessee that though there was no addition made in the assessment order but in the ITNS Computation Sheet annexed to the assessment order, the total income was computed at Rs.45,73,07,180/-. There was an erroneous adjustment of Rs.4,59,27,580/- [Rs.45,73,07,180 - Rs.41,13,79,600] made in the computation sheet and it was identified that the interest income of Rs.4,59,27,580/- had been taxed twice therein viz., as declared by the assessee under the head ‘Other Sources’ and again added in the computation sheet under the head ‘Business Income’.

4.2. In the appellate proceedings, the Ld. CIT(A) observed that the AO had not made any separate addition in the assessment order and therefore no interference was called for. He further Page | 4

ITA Nos.1469 & 1470/KOL/2026 Britannia Bel Foods Pvt. ltd.; A.Y. 2017-18 & 2018-19 held that, in absence of documentary correlation between the profit & loss account, Computation of income & assessment figures, the allegation of double taxation in the computation sheet remained unsubstantiated. The Ld. CIT(A) accordingly, dismissed the appeal of the assessee.

4.3. After hearing the rival contentions and perusing the materials available on record, the Ld.AR brought to our notice that the above mistake in the ITNS Computation Sheet had since been rectified by the AO vide order dated 30.09.2022 passed u/s 154 of the Act, copy of which has been placed at pages 85 to 86 of the paper book. It is noticed that, the AO had rectified the mistake in the computation sheet and correctly computed the assessable total income at Rs.41,13,79,600/- as declared by the assessee in the return of income. The Ld. AR had additionally taken us through the reconciliation of interest income offered to tax in the return of income and the computation of income, placed at page 87 of the paper book to show that the interest income had already been offered to tax under the head ‘other sources’ and that the same amount was mistakenly again added in the computation sheet under the head ‘business income’. We find the same to be verifiable as well. The Ld. DR appearing for the Revenue was unable to controvert the rectification order passed by the AO. In view of the aforesaid, we are of the view that, once this apparent mistake in the computation sheet has already been verified and rectified by the AO u/s 154 of the Act, the order passed by the Ld.CIT(A) sustaining the erroneous adjustment made in the computation sheet, was unjustified. We thus set aside the order of the Ld. CIT(A) and allow the grounds raised by the assessee. Page | 5

ITA Nos.1469 & 1470/KOL/2026 Britannia Bel Foods Pvt. ltd.; A.Y. 2017-18 & 2018-19 5. The appeal of the assessee is allowed.

6.

In the result, both the appeals of the assessee are allowed.

Order pronounced on 24.08.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 24.08.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

(Manish Bhoi) Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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