Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 1089 - AT - Income TaxRevision u/s 263 - exercise of jurisdiction by the Commissioner under section 263 - allowability of depreciation on know-how, trademarks and patents - Held that:- The issue of claim of depreciation on know-how, trademarks and patents has thus been decided by the Tribunal in favour of assessee by deliberations in the appeal relating to assessment years 2004-05 and 2005-06 vide consolidated order dated 12.12.2017. The issue thus, on merits stands decided in favour of assessee. Once the issue has been decided in favour of assessee then, on merits the order of Commissioner under section 263 of the Act cannot be upheld. Coming to the second aspect of the order of Commissioner in invoking the jurisdiction under section 263 the Tribunal has taken a view that where bifurcation of assets had taken place in assessment year 2003-04 and depreciation had been allowed on the assets i.e. tangible assets and know-how, trademarks, patents and balance value attributed to goodwill; Assessing Officer had allowed the depreciation on tangible assets and the value attributed to know-how, trademarks and patents while completing assessment for assessment year 2003-04, which cannot be disturbed. AO denied the depreciation on goodwill, which was allowed by the Tribunal vide separate order. The assets thus, entered into the block of assets and depreciation was claimed on the WDV from assessment year 2004-05 onwards. Commissioner in the year under appeal vide order passed under section 263 had held the order passed by the AO in allowing the aforesaid depreciation on know-how, trademarks and patents, as erroneous and prejudicial to the interest of Revenue. AO had allowed the depreciation on WDV of intangible assets of know-how, trademarks and patents, since the same was allowed to the assessee since the year of first claim and it had entered into the block of assets. Tribunal vide order dated 12.12.2017 in assessment years 2004-05 and 2005-06 has held that once the assets entered into block of assets, then depreciation on WDV on such assets cannot be disturbed in the subsequent orders. AO could not have tinkered with the claim of depreciation on know-how, trademarks and patents in the subsequent years and hence, the order passed by the Assessing Officer allowing the same, cannot be said to be erroneous and hence not prejudicial to the interest of Revenue. Consequently, there is no merit in the exercise of jurisdiction by the Commissioner under section 263 of the Act. Thus, we hold the order passed by the Commissioner under section 263 is both invalid and bad in law both on jurisdictional issue and even on merits - Decided in favour of assessee.
|