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Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED & Ms. MADHUMITA ROY
आदेश / O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)– Gandhinagar, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)/GNR/261/2013-14dated 30/06/2014 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961(hereinafter referred to as "the Act") dated 30/04/2013 relevant to Assessment Year (AY) 2009-10.
ITA No.2585/Ahd/2014 Tudor India Ltd. vs. Jt.CIT(GNR)Range Asst.Year – 2009-10 - 2 - The assessee has raised the following ground (Ground No.7.1) of appeal:- 7.1. Without prejudice to above, the Learned Commissioner has erred in not allowing depreciation on the amount of Management fees considered to be an expenditure of capital in nature.
The only issue raised by the assessee is that the learned CIT (A) erred in not allowing depreciation on the management fees which was treated as capital in nature.
At the outset, we note that the assessee also raised the identical issue in its own case bearing ITA No. 612/AHD/2014 in the assessment year 2008-09 which has been decided by us in its favour vide order dated 13-5-2019. The relevant extract of the order is reproduced as under:
6.3. Now the controversy arises before us whether the assessee is entitled for depreciation on the management fees as discussed above. It is an undisputed fact that the ITAT in the own case of the assessee in ITA No. 2585/AHD/2014 vide order dated 6-6-2018 in the AY 2009-10 has held that 60% of the expenses are capital in nature on account of expansion and increase in the installed capacity. The relevant fact of the order is reproduced below: ‘’7.1 We, therefore, taking into consideration the entire aspect of the matter including the order passed in the identical case as mentioned hereinabove is of the considered opinion that the issue is squarely covered by the judgment discussed above and we think it fit to divide the alleged managerial fees into capital and receipt nature of expenses in the ratio of 60:40.’’ From the above it is clear that the management fee allocated by the parent company to the assessee is capital in nature to the extent of 60% out of the total allocation of the management fees for the expansion of the installed capacity. Therefore we are of the view that such allocation of management fee is entitled for the depreciation at the rate as prescribed under section 32 of the Act. Accordingly we direct the AO to allow the depreciation to the
ITA No.2585/Ahd/2014 Tudor India Ltd. vs. Jt.CIT(GNR)Range Asst.Year – 2009-10 - 3 - assessee at the prescribed rate on the amount of management fee treated as capital in nature. Hence the ground of appeal of the assessee is allowed. 7. In the result, the appeal of the assessee is allowed.
2.2 The facts of the case on hand are identical to the facts of the case as discussed above. Therefore respectfully following the order of the ITAT as discussed above, we are inclined to allow the ground of appeal of the assessee. Hence the ground of appeal raised by the assessee is allowed.
In the result the appeal of the assessee is allowed
This Order pronounced in Open Court on 13/05/2019
Sd/- Sd/- (Ms.MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 13/05/2019 ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-Gandhinagar �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad