M/S.INTERNATIONAL BUSINESS SERVICES GROU vs. THE COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court allowed the appeal on the first issue, setting aside the orders of the Tribunal and lower authorities. It remanded the matter to the Assessing Officer for reconsideration along with assessments reopened for preceding years. This was to facilitate the inclusion of income received under a non-competition agreement under Section 28(v)(a), as proposed by the Assessing Officer. Regarding the second issue, the Court dismissed the appeal, upholding the Tribunal's finding that the assessee is not entitled to depreciation on furniture and fixtures provided in a rented-out building. The reasoning was that these items were not used in business, and there is no scope for granting depreciation under the head 'property'. The Court found no ground to interfere with the Tribunal's decision on this point.
What were the facts?
This appeal concerns M/s International Business Services Group Pvt. Ltd. (the assessee) and the Commissioner of Income Tax, Trivandrum (the revenue). The assessment year is not explicitly stated for the primary issue, but the appeal is ITA No. 1805 of 2009, filed against an order of the Income Tax Appellate Tribunal, Cochin Bench. The Assessing Officer issued a notice under Section 148 proposing to reopen assessments to include income received under a non-competition agreement under Section 28(v)(a). The assessee also claimed depreciation on furniture and fixtures provided in a building given on rent. The Tribunal had previously ruled on these matters.
What were the issues?
1. Whether the assessment for the current year should be set aside and remanded to the Assessing Officer for reconsideration along with assessments reopened for preceding years, specifically to consider income received under a non-competition agreement under Section 28(v)(a)? - Assessee's contention: Not explicitly recorded, but the appeal was allowed on this issue, implying agreement with the remand. - Revenue's contention: Not explicitly recorded. 2. Whether the assessee is entitled to claim depreciation on furniture and fixtures provided in a building given on rent, when the income is assessed under the head 'property'? - Assessee's contention: Not explicitly recorded. - Revenue's contention: Not explicitly recorded, but the Tribunal's view was upheld, suggesting the revenue likely argued against the claim.
Which sections of the Income-tax Act were involved?
Section 28(v)(a),Section 148
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Ramachandran Nair, J. During hearing of this appeal, the counsel for the assessee brought to our notice a notice issued by the Assessing Officer under Section 148 proposing to reopen the assessment to bring to the entire income received under non-competition agreement under Section 28(v)(a) of the Income Tax Act. The details as to whether income is accounted on accrual basis or on cash basis and the dates and the order in which the amounts were received are not clear from the orders issued for this year. In any case in view of the proposal of the Assessing Officer for reopening earlier year's assessments, we feel in order to facilitate it the assessment for this year also can be set aside and remanded to the Assessing Officer for consideration along with the assessments reopened for other years. Accordingly appeal is allowed by setting aside the order of the Tribunal and that of the lower authorities and we remand the issue to the Assessing Officer for reconsideration along with assessments reopened for the preceding years for considering income received under the non-competition agreement.
The next question raised is assessee's claim for depreciation in respect of furniture and fixtures etc provided in the building given on rent by the assessee. The Tribunal took the view that assessee is not entitled to depreciation because there is no scope for granting depreciation in the assessment of income under the head property. We do not find any ground to interfere with the Tribunal's finding because the furniture and other articles in respect of which depreciation is claimed are not used in business but are facilities provided in a rented out building. Consequently
the appeal on this issue is dismissed. C.N.RAMACHANDRAN NAIR Judge K. SURENDRA MOHAN Judge jj
More judgments on Section 148
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
- Adj Agri International LLP, Rajkot vs The Income Tax Officer, Ward-1(1)(1), RajkotITA 1198/RJT/2026[2018-19]Status: Disposed21 Oct 2026AY 2018-19
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