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Facts
The assessee company claimed depreciation on Brand and Technology acquired in AY 2013-14. This claim was disallowed by the AO. Appeals for AY 2014-15 and 2015-16 were filed against the consequential disallowance of depreciation in those years.
Held
The Tribunal noted that the primary issue for AY 2013-14 was still pending before the CIT(A) after 8 years. The CIT(A) for AY 2014-15 and 2015-16 had confirmed disallowances despite the pendency of the earlier year's appeal.
Key Issues
Whether the consequential disallowance of depreciation for AY 2014-15 and 2015-16 could be confirmed when the primary issue for AY 2013-14 was still pending.
Sections Cited
154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K.
Per Prashant Maharishi, Vice President
This appeal is filed by Tata Hitachi Construction Machinery Company Pvt. Ltd. (the assessee/appellant) for the assessment years 2014-15 & 2015-16 against the appellate order passed by the CIT(Appeals)-14, Bengaluru [ld. CIT(A)] dated 13.1.2020 & 20.1.2020 respectively.
The only issue in both the appeals is that the ld. CIT(A) has confirmed the disallowance of depreciation on Brand and Technology amounting to Rs.17,27,53,888 and Rs.12,95,65,416 for the respective assessment years.
IT(IT)A Nos.323 & 324/Bang/2020 Page 2 of 4
In one of the grounds of appeal raised by the assessee, it is submitted that the allowability of the above depreciation is subject to the outcome of the assessee’s appeal before the CIT(A), LTU for AY 2013-14 wherein the assessee has objected to the action of the ld. AO in holding the actual cost of Brand and Technology from M/s Serviplem Technology and M/s. Comoplesa Lebrero as Nil.
4. Before us also it is submitted by the ld. AR, Smt. Pratibha R., Advocate that the issue for the first year for AY 2013-14 is pending before the ld. CIT(A), LTU and unless that issue is decided, the issue of depreciation for these respective appeals cannot be decided.
The ld. CIT(DR) also confirmed the fact that assessee’s appeal before the ld. CIT(A), LTU for AY 2013-14 is stated to be pending.
We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. The assessee is a company engaged in the business of manufacture, purchase and sale of hydraulic excavators, loaders, mechanical shovels, cranes, dumpers, etc. During the AY 2013-14 the assessee acquired the two companies Serviplem and Comoplesa and stated that it has also acquired the value of Brand and Technology amounting to Rs.77.82 crores. The ALP of the above asset was considered at Nil by the ld. TPO and therefore the ld. AO disallowed the depreciation of Rs.9,72,75,000 for that assessment year. The appeal against that assessment year is pending before the ld. CIT(A), LTU since 8.3.2017. It is stated that still it is not decided. Meanwhile for the assessment years in the appeals before us action u/s. IT(IT)A Nos.323 & 324/Bang/2020 Page 3 of 4
154 of the Act was taken and consequent depreciation was not allowed in both these years. When we find that the first year of the claim of depreciation for AY 2013-14 is not decided even after 8 years of filing of the appeal by the CIT(A), LTU, these appeals for AYs 2014-15 & 2015-16 are merely consequential. It is also surprising that the ld. CIT(A) for both these assessment years has noted that the appeal for AY 2013-14 is pending before the CIT(A), LTU, still confirmed the disallowance of depreciation made u/s. 154 of the Act. Judicial propriety demands that the ld. CIT(A) for both these assessment years should have tagged either the appeal of the assessee to AY 2013-14 along with these appeals or should have waited for the decision of the ld. CIT(A) for AY 2013-14. As it is not known to us that when the appeal of the assessee for AY 2013-14 would be decided, these appeals are also restored to the file of the ld. CIT(A) with a direction to decide these consequent appeals after deciding the issue in AY 2013-14. Accordingly both these appeals are allowed for statistical purposes without commenting on the merits of the case.
Pronounced in the open court on this …….. day of November, 2025.
( SOUNDARARAJAN K. ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the …. November, 2025.
/Desai S Murthy /