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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI S. RIFAUR RAHMAN, AM & SHRI RAVISH SOOD, JM
आदेश / O R D E R
Per S. Rifaur Rahman, Accountant Member:
The present appeal has been filed by the assessee against the order of Ld. Commissioner of Income Tax – 22, Mumbai in short ‘Ld. CIT(A)’, dated 27.02.2017 for AY 2013-14 on the grounds mentioned herein below:-
SNB Infrastructure Pvt. Ltd.
1. On the facts and in the circumstances of the case and in law the appellant was unable to prefer the appeal within the stipulated time of sixty days. The appellant was under a bonafide mistaken impression of having filed the appeal when in fact the appeal filed was for A Y 2011-12. It is submitted that the issue agitated in this appeal is the subject matter of appeal for A Y 2010-11 & 2011-12. Upon realising that the appeal has been prepared but not filed immediately the steps were taken to file the same. It is earnestly prayed that the delay in filing of the appeal by 48 days be condoned and in the interest of justice the appeal be taken on record and admitted. 2. (NIL) 3. On the facts and in the circumstances of the case and in law the learned CIT (A) erred in sustaining the order of the AO. The learned CIT (A) ought to have granted the claim of depreciation on intangibles for Rs.1,56,26,984/- on the basis of facts and in accordance with the law.
On the facts and in the circumstances of the case and in law the learned CIT (A) without appreciating the submissions made and on the specious ground of the facts and circumstances being identical denied the claim of depreciation. The learned AO was enjoined to accept claim with regard to the depreciation of Rs 1,56,26,984/-.
SNB Infrastructure Pvt. Ltd. 5. On the facts and in the circumstances of the case and in law the learned CIT (A) erred in denying the claim of depreciation of Rs, 1,56,26,984/- on intangibles. The learned CIT (A) failed to realize that conditions precedent being met for succession under 47(xiii) the claim for depreciation made on the assets on the date of succession which included intangibles as well.
All the above grounds are independent and without prejudice to each another.
At the very outset, it is noticed that none appeared on behalf of assessee in spite of several occasions posted for the hearing on 15.10.18, 03.12.18, 07.02.19, 22.04.19, 01.07.19, 16.09.19 and 20.11.19. From the records, we also noticed that notice was issued to the assessee on the address given by the assessee on Form No. 36. But even in spite of that, none had appeared on behalf of the assessee on the subsequent dates. On the other hand, Ld. DR is present in the court and is ready with arguments. Therefore, we have decided to proceed with the hearing of the case ex-parte with the assistance of the Ld. DR and the material placed on record. From the records, we also notice that there is a delay of 48 days in filing the appeal and for that an affidavit was filed.
SNB Infrastructure Pvt. Ltd.
We have heard Ld. DR and we have also perused the material placed on record as well as the orders passed by revenue authorities. As per the facts of the present case, assessee is engaged in the business of infrastructure development and filed its return of income on 28.09.13 declaring total income at Rs. 2,74,42,870/-. The return was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and notice u/s 143(2) and 142(1) were issued and served on the assessee. In this regard, relevant information was submitted by assessee as called for. But, AO has not accepted the contention of the assessee and disallowed the claim of assessee.
4. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of the assessee and submission which are detailed in para no. 4.2 of its order, had dismissed the appeal filed by the assessee.
Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above ground raised by the assessee in para no. 4.3 of its order and the same is reproduced below:-
4.3 I have considered the facts of the case and the appellant's submissions. The same issue had come up for SNB Infrastructure Pvt. Ltd. consideration in the appellant's appeal for A.Y. 2010-11 wherein the undersigned had observed and decided the issue as under:
5.3 I have considered the facts and circumstances of the case. The appellant has sought to justify its claim of depreciation on intangible assets by referring to the provisions under section 47 which provide for certain transactions which though are transfer within the meaning of transfer under 2(47) are not treated as transfer for the purposes of determination of capital gains. Attention was drawn to clause (xiii) of the said section which relates to the transfer of partnership business and succession by a private limited company. It was contended that there is an express reference to the intangible assets in the said section which indicates that the possibility of intangibles being a part of assets and liabilities was envisaged by the legislature and that the express provision of intangibles covers the transfer of intangibles which in its case are that of commercial rights and registrations along with goodwill. I find no merits in the appellant's contention. No intangible assets on account of goodwill and commercial rights and registration existed in the books of the partnership firm before succession. The question of intangible assets being transferred to the succeeding appellant company, therefore, does not arise. The appellant also drew attention to the issue of transfer under Section 47(xiv) with regard to the SNB Infrastructure Pvt. Ltd. creation of intangibles at the time of transfer. It was submitted that no fault has been found on such intangibles arising on the eve of transfer under 47(xiv) and that the acceptance of the intangibles in such transfer affirms that the same is within the tenets of the legal provisions. Reliance was placed on the ruling of Mumbai Tribunal wherein the Hon'ble ITAT in the case of Asst. CIT v. Nayan L. Mepani (MumO (2012) 49 SOT 641 (Mumbai) held that the intangibles arising on the transfer under 47(xiv) does not violate the provisions and resultantly the amounts considered under the transfer needs to be taken as the cost of acquisition for the purposes of depreciation. The judgement relied upon by the appellant is also not applicable in the instant case. It is precisely because of the fact that no consideration was paid for the intangible assets which were created on succession that depreciation was disallowed as there was no cost of acquisition. In view of all these facts and observations, the appellant's grounds of appeal on the issue of depreciation on intangible assets are dismissed.
Facts and circumstances of the instant appeal being identical with that of the earlier year, the appellant's grounds of appeal on this issue are dismissed for this Assessment Year too.