VENKATESH NAIK MOHANDAS & SONS,CALICUT vs. THE ACIT, KOZHIKKODE

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ITA 561/COCH/2023Status: DisposedITAT Cochin23 October 2024AY 2016-17Bench: Shri Satbeer Singh Godara (Judicial Member), Shri Amarjit Singh (Accountant Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the lower authorities had not considered all the facts, including judicial proceedings before the High Court. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee claimed depreciation on a trademark, which was disallowed by the Assessing Officer and upheld by the CIT(A). The assessee argued that the trademark was a business asset transferred by a partner and the payment was made pursuant to a High Court order.

What were the issues?

Whether depreciation is allowable on a trademark treated as a business asset, and whether the lower authorities properly considered the evidence presented.

Which sections of the Income-tax Act were involved?

Section 32(1)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: Shri Balram R. Rao, CA
For Respondent: Smt. V. Swarnalatha, Sr. D.R
Hearing: 22.08.2024Pronounced: 23.10.2024

O R D E R Per Bench

This assessee’s appeal for A.Y. 2016-17 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/NFAC/S/250/2023- 24/1053688394(1) dated 13.06.2023 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).

Heard both the parties at length. Case file perused.

2.

The assessee pleads and following substantive grounds in the instant appeal: - “1. On the facts and in the circumstances of the case, the Ld. CIT(A), NFAC erred in upholding the order of the Assessing Officer in the manner in which he did. 2. On the facts and circumstances of the case, the Ld. CIT (A), NFAC erred in upholding the disallowance of depreciation claimed on Trademark amounting to 50,17,781/-.

Venkatesh Naik Mohandas & Sons 3. The Ld. CIT(A) as well authorities below failed to appreciate that the intangible assets being Trademark, which was transferred by the Partner, Mr. Rajeev Mohandas were business assets and by no stretch of imagination could be treated as a personal asset, since intangible asset always arise in course of business.

4. The Ld. CIT(A) as well as the authorities below failed to appreciate that the payment of 24 crore was made in pursuance of order of the High Court of Kerala dated 5.1.2016 and therefore it was not right on the part of the CIT(A) as well as the AO to misinterpret the payment as one of "personal nature".

5. The Ld. CIT (A) failed to appreciate that Mr. Ravinath Mohandas had made his claims including 'right to trademark' during the mediation proceedings itself and also the High Court of Kerala had directed the Partnership Firm 'M/s VNM and Sons' to pay an amount of 4 crore to Ravinath Mohandas from the date of order in settlement of all claims including Trademark claims. Hence the amount paid was for retention of Trademarks and all his claims including other business and commercial rights of the Appellant Firm.

6. For these and such other grounds that may be urged at the time of hearing the Appellant prays that the Appeal may please be allowed to meet the ends of justice.”

3.

Suffice to say, the assessee’s sole substantive ground raised during the course of hearing in the instant appeal challenges correctness of both the lower authorities action disallowing its depreciation claim of Rs.50,17,781/- pertaining to trademark, i.e. an intangible asset u/s. 32(1)(ii) of the Act.

4.

Learned Sr. D.R. vehemently submits that the assessee had not filed any evidence on record during assessment and in the lower appellate proceedings explaining acquisition of the alleged trademark rights in dispute.

5.

Learned counsel refers to the assessee’s paper book running into 63 pages; and more particularly, page No.6 involving judicial proceedings before the hon'ble jurisdictional high court dated 05.01.2016. Both the lower authorities have admittedly not considered all these facts in their respective proceedings. We accordingly deem it appropriate to restore the assessee’s instant sole substantive ground back to the learned Assessing Officer for his afresh appropriate adjudication subject to the rider that it shall be the taxpayer’s onus and responsibility only to file and prove all the relevant facts in consequential proceedings. Ordered accordingly.

6.

This assessee’s appeal is allowed for statistical purposes in above terms.

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