DCIT 9(3)(1), MUMBAI vs. DHL LEMUIR LOGISTICS P.LTD, MUMBAI

सुनवधई की तधयीख / Date of Hearing : 19.7.2016 घोषणध की तधयीख /Date of Pronouncement : 25.7.2016 आदेश / O R D E R

Per RAJESH KUMAR, Accountant Member:

is against the direction by the ld. CIT(A) relying on the decision of the Apex Court in the case of CIT V/s Smifs Securities Ltd reported in 348 ITR 302 (SC) by ignoring the fact that the facts of the said case are distinguishable from the facts of the assessee’s case and also in-complete disregarding the CBDT circular No.549 dated 31.10.1989.

3. Facts of the case are that he assessee filed its return of income for the assessment year 2009-10 on 30.9.2009 declaring total income of Rs.63,71,94,610/- which was revised on 30.3.2011 at an income of Rs.33,90,50,860/- by claiming depreciation of Rs.29.81 crores at the rate of 20% on written down value (WDV) of block of intangible assets of Rs.119.25 crores. In the revised return, the assessee declared the profit us/ 115JB of the Act at an amount of Rs.42,00,26,456/-. The case of the assessee was selected for scrutiny and statutory notices u/s 143(2) dated 19.8.2010 and 142(1) dated 21.12.2010 were issued and served upon the assessee.

4. During the course of assessment proceedings, the AO asked the assessee to explain and justify the allowability of depreciation of Rs.29,81,43,750/- in respect of intangible assets (goodwill) which was claimed by the assessee in is revised return of income filed on 30.3.2011. The assessee replied that it had incurred cost towards goodwill at Rs.159.01 crores during the financial year 2007-08. The assessee also claimed depreciation on the said intangible assets to the tune of Rs.39,75,26,000/- for the year ending on 31.3.2008 and accordingly, WDV of the said intangible block of assets as on 1.4.2008 arrived at Rs.119,25,75,000/- and thus, rightly claimed depreciation on the said WDV at the rate of 25% amounting to Rs.29,81,43,750/- as per the provisions of section 32 (1)(iii) of the Act by filing revised return on 30.3.2011. In defence of his submissions, the assessee relied on the series of decisions as incorporated in para 4.2 of the assessment order. The AO ultimately rejected the submissions of the assessee and disallowed the depreciation of Rs.29,81,43,750/- on goodwill and added the same to the total income of the assessee and framed the assessment at Rs.63,71,94,610/- under the normal provisions of Act and Rs.42,00,26,450/- under section 115JB of the Act, vide order dated 13.3.2013 passed under section 143(3) r.w.s. 92CA(4) of the Act. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A). The ld. CIT(A) after considering the submissions ofld.AR, which has been incorporated in para 2.2 of the appeal order allowed the appeal of the assessee by observing and holding as under : “3. Decision After careful perusal of the assessment order and the written submissions filed by the A/R of the appellant it has been observed that the case of the appellant company is covered by the order of my predecessor in Appeal No. CIT(A)-16/ Addl.CIT-8(1)/IT- 190/2011-12 vide order dated 23.08.2013. Hence the AO is directed to allow the depreciation on intangible assets as" appearing ''in the audited books of account of the appellant filed with the return of income as directed by my predecessor. Hence the ground”