PRINCIPAL COMMISSIONER OF INCOME TAX-6 vs. M/S SAPA EXTRUSION INDIA PVT LTD

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ITA/864/2018HC KarnatakaKAHC01055641201822 October 2020Bench: ALOK ARADHE,H.T. NARENDRA PRASAD4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration as the issue had been decided against the revenue in a previous judgment. Therefore, the appeal was dismissed.

What were the facts?

The Revenue appealed against an ITAT order allowing depreciation on non-compete fee. The assessee had paid a non-competition fee to M/s. Alufit India Pvt. Ltd. as per an agreement.

What were the issues?

Whether the Tribunal was justified in allowing depreciation on non-compete fee, and whether the assessee acquired an intangible asset for which depreciation is allowable.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 22ND DAY OF OCTOBER 2020

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD

I.T.A. NO.864 OF 2018

BETWEEN:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX-6 BMTC COMPLEX, KORAMANGALA, BANGALORE

2.

DY. COMMISSIONER OF INCOMET AX CIRCLE - 6(1)(1), BMTC COMPLEX KORAMANGALA, BENGALURU. ...APPELLANTS (BY SRI E.I. SANMATHI, ADV.)

AND

M/S SAPA EXTRUSION INDIA PVT. LTD., NO.54, VIRGO NAGAR, OLD MADRAS ROAD, BANGALORE-560049 PANAAOCS4633C. …RESPONDENT (BY SRI BALRAM R.RAO, ADV.)

- - -

THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961, ARISING OUT OF ORDER DATED: 06/07/2018 PASSED IN ITA NO.402/BANG/2018, FOR THE ASSESSMENT YEAR 2013-2014 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON’BLE COURT AS DEEMED FIT. (a) SET ASIDE THE APPELLATE ORDER DATED:06/07/2018 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. ITA NO.402/BANG/2018 (ANNEXURE-A) FOR THE ASSESSMENT YEAR 2013-14 AS SOUGHT FOR IN THIS APPEAL.

THIS I.T.A. COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

Mr. E. I. Sanmathi, learned counsel for the revenue.

Mr. Balram R. Rao, learned counsel for the assessee.

2.

This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the revenue. The

subject matter of the appeal pertains to the Assessment Year 2013-14. The appeal was admitted by a Bench of this Court vide order dated 20.06.2019 on the following substantial questions of law:

“1. Whether on the facts and circumstances of the case, the Tribunal is justified in holding that the assessing authority is not right in disallowing non-competition fee of Rs.28 crores paid by assessee to M/s. Alufit India Pvt. Ltd., as per agreement dated 9.5.2011 by holding that the assessee had acquired intangible asset by relying upon the decision of Delhi High Court in the case of M/s. Sharp Business Systems Ltd., v/s.CIT and also in the case of CIT v/s. Ingersol Rand International Limited?

2.

Whether on the facts and circumstances of the case, the Tribunal is justified in allowing depreciation on non-compete fee eventhough the assessing authority rightly held that depreciation on non- compete fee is not allowable as per Section 32(1)(ii) of the Act?”

3.

When the matter was taken up today, learned counsel for the assessee submitted that the aforesaid substantial questions of law have been answered against

the revenue by this Court vide Judgment dated 10.03.2020 passed in ITA No.680/2019.

4.

The aforesaid submission could not be disputed by learned counsel for the revenue.

5.

For the reasons assigned by a Bench of this Court in the Judgment dated 10.03.2020 passed in ITA No.680/2019, we hold that no substantial question of law arises for consideration in this appeal.

In the result, the appeal fails and is hereby dismissed.

Sd/- JUDGE

Sd/- JUDGE

dn/- CT-HR

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