Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘ B’ BENCH : CHENNAI
Before: SHRI CHANDRA POOJARI & Shri Duvvuru RL Reddy
आदेश / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER
This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-1, Chennai dated 12.01.2017 pertaining to assessment year 2012-13.
ITA No612.Mds./2017 :- 2 -:
2. The assessee has raised the following grounds for our adjudication.
The Order of the learned Assistant Commissioner of Income tax is contrary to the facts, law and circumstances of the case of the Appellant.
Payment For Business Consideration - Rs. 24,78,607/- (Depreciation on Goodwill) The Assessee paid in earlier years, payments towards Business consideration for takeover of hospitals at various locations and capitalised these payments under the head Goodwill, an asset being intangible in nature and claimed Depreciation @ 25% of the Written down value. The depreciation was claimed u/s.32 for acquiring intangible assets like Patents, Trademarks, Licenses, Franchisees and other businesses. Hence, the claim for Depreciation on the above intangible assets should be allowed.
The brief facts of the case are that the assessee is in the business of running nursing homes, clinics, medical research and other related activities primarily towards eye card. During the course of assessment proceedings, the AO found that the assessee had claimed depreciation of `24,78,607/- on Goodwill @ 25%. As it is seen in paragraph 5.2 of the assessment order, it consisted of payments made to as many as three doctors towards goodwill for acquiring business. The AO rejecting the plea held that it consisted of assets on which depreciation could not be claimed and denied the claim made. In this regard, it also followed the approach with respect to similar claim and the manner in which it was held in preceding year 2010-11.
Subsequently, the Assessment was completed u/s.143(3) of the Act on ITA No612.Mds./2017 :- 3 -:
17.02.2015 by the AO, who disallowed depreciation of `24,78,607/- on Goodwill @ 25%. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).
3.1 On appeal, Ld.CIT(A) observed that an identical issue has been considered elaborately in the case of the appellant for the A.Y. 2011-12 order dated 27.5.2016 in (New ITA No.64/C1T(A)-1/2014- 15) wherein after discussion the issue has been decided against the appellant. According to the CIT(A), the expenditure is clearly in the capital field and not eligible for depreciation claimed u/s 32(1)(ii) and that is neither cannot be allowed for such reasons as a revenue expenditure. With facts remaining, the same have no reason to take a view different than what has been taken in the order under reference. This issue of appeal being covered against the appellant in the preceding year, is also decided against the appellant for the A.Y. 2012-13. Hence, the Ld.CIT(A) directed the AO to modify the order accordingly. Against the order of Ld.CIT(A), now the Assessee is in appeal before us.
We have heard both the parties and perused the material on record. Similar issue came for consideration before this Tribunal in assessee's own case for assessment year 2011-12 in ITA No.2279/Mds./2016 wherein the Tribunal held as follows:-
ITA No612.Mds./2017 :- 4 -:
“6.1 We have heard both the parties and perused the material on record. According to ld.A.R, the depreciation was claimed in the opening balance and there were no intangible assets acquired during the F.Y 2010-11. The entire payment was made during the F.Y 2009-10 and claimed the depreciation and the appeal is pending before the Ld.CIT(A) for the F.Y 2009-10. Further, the ld.A.R requested this Tribunal to remit the matter back to the file of the AO to consider the issue for both the assessment years and to decide the issue. On the other hand, the ld.D.R did not make any objection for remitting the matter back to the file of CIT(A). The issue in question is whether the assessee has acquired any Depreciable intangible assets during the FY 2009-10 or not? If so, whether the Depreciation is allowable on the assets or not?. Initial year of expenditure was incurred in the A.Y. 2010-11 and the nature of payment required to be examined in the A.Y. 2010-11, and finding has to be reached whether the expenditure is capital or revenue expenditure. The payments were made to the Doctors without mentioning the purpose, reasons for payments relevant agreement and nature of treatment of the payments in the books of the assessee as well as the recipient. In the absence of’ the complete details and relevant documents, it is not possible to decide the issue whether it is a capital expenditure or the payment is for acquiring intangible assets or payments towards non-compete fee as held by the Ld.CIT(A). The Ld.DR/AR could not submit any of the details required above. Therefore, we remit the matter back to the file of the Ld.CIT(A) with a direction to examine all the details and decide the issue afresh on merits in the light of the above discussion. The assessee’s appeal on the issue is allowed for statistical purposes.”
ITA No612.Mds./2017 :- 5 -:
Accordingly, this ground of appeal is remitted to the file of Ld.CIT(A) on similar direction given in the above Order of Tribunal .
In the result, the appeal of the assessee is allowed for statistical purposes.