TMI Blog2016 (7) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... he opening written down value. In our considered view this is not permitted in law. Thus the order of the First Appellate Authority, to the extent of his decision to allow depreciation on technical know-how fees is to be upheld. - Decided in favour of assessee Rate of depreciation on computer peripherals - Held that:- The issue is covered by the decision of Hon’ble Delhi High Court in the case of CIT vs. BSES Yamuna Power Ltd. (2010 (8) TMI 58 - DELHI HIGH COURT ) and ACIT vs. Caparo Maruti Ltd. Delhi [2012 (4) TMI 665 - ITAT DELHI] saying as computer peripherals are the part of the computer system, they are entitled to depreciation at the higher rate of 60%.- Decided in favour of assessee Addition made on account of difference in trading a/c u/s 145A - Held that:- The A.O. has enhanced the figures of sales, closing stock, opening stock and purchases, by the amount of excise duty while adopting inclusive method. While doing so, he should have reduced the excise duty actually paid by the assessee of ₹ 1,71,31,908/- as it has been already included. In view of the above discussion we uphold the order of the First Appellate Authority in deleting the addition - Decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per which the value of the various assets was determined as under: Particulars Amount (Rs.) Land 1,20,57,000 Building 3,89,45,713 Plant Machinery 4,37,39,700 Intangible Assets (Technical Know How) 2,50,00,000 Net Current Assets 1,25,00,000 Gross Consideration 13,22,42,413 The appellant has filed its return of income for A.Ys. 2005-06 and 2006-07 claiming depreciation u/s 32 of the Act as per Table A above which was allowed by the Department vide intimation u/s 143(1) for A.Y 2005-06 and assessment order u/s 143(3) for A.Y 2006-07. However, in A.Y. 2007-08 the AO while accepting the cost of purchase of all the other assets as mentioned above, has fully disallowed depreciation in respect of technical know-how on the ground that there was a difference in the cost of acquisition of the said technical know-how between the appellant's books wherein it was show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noring the fact that as per the provisions of S.145A the assessee is required to prepare memorandum trading account for the year under consideration by exclusive and inclusive method. 4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 5. We have heard Shri K.K.Jaiswal, Ld.D.R. on behalf of the Revenue and Shri P.C.Yadav, the Ld.Counsel for the assessee. 6. On a careful consideration of the facts and circumstances of the case, perusal of material on record, orders of lower authorities, case laws cited, we hold as follows. 7. Shri KK Jaiswal, the Ld.D.R. submitted that : a. No specific agreement vis-a-vis valuation of each of the asset transferred by the seller to assessee was there which would show the value of each of the asset transferred in a specific manner. b. The MOU did not specify that any knowhow was transferred to assessee. c. Whatever technology and plant and machinery transferred to assessee did not cover under section 32 of the Act. d. Opinion of valuer and approvals taken from Central and state authorities ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value fixed by the Valuing Officer. 8. After hearing rival submissions we hold as follows. 9. The assessee company entered into Memorandum of Understanding (MOU) for transfer of business as going concern with M/s Premium Energy Transmission Ltd. (PET Ltd.). The assessee claimed to have acquired technical know-how. It was disclosed in the accounts and financial statements as an asset and depreciation was claimed on the same for the A.Y. 2005-06. The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). Thus the depreciation claimed on the block of assets, being technical know-how was not disturbed by the Revenue in the first year of claim. PET Ltd. filed its return of income and offered ₹ 2.75 crores as its profit, on sale of know-how to the assessee company. For the A.Y. 2006-07 the assessee company filed its return of income declaring the written down value of know-how and claiming depreciation thereon. The assessment order was passed by the A.O. u/s 143(3) of the Act and the claim of depreciation on technical know-how fees was not disturbed. 9.1. During this year the A.O. for the reasons given in his order, seeks to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined by a valuer. The Ld.CIT(A) cannot tinker with the figure of opening written down value. It is well settled that valuation by a Valuer is an opinion and the transaction between the parties is a fact. An opinion cannot replace a fact. Thus, we allow the Cross Objections of the assessee and direct the A.O. to grant depreciation on the opening written down value of the asset of technical know-how. In the result the Cross Objections are allowed. 11. We now take up the appeal of the Revenue for the A.Y. 2009-10 in ITA 1261/Del/2013. 12. Ground no.1 of the Revenue is on the issue of allowability of depreciation on technical know-how. 12.1. Consistent with the view taken for the A.Y. 2007-08 and 2008-09 we dismiss this ground of the Revenue. 13. Ground no.2 is on the issue of rate of depreciation on computer peripherals. The issue is covered by the decision of Hon ble Delhi High Court in the case of CIT vs. BSES Yamuna Power Ltd. reported in 358 ITR 47 (Delhi) and ACIT vs. Caparo Maruti Ltd. Delhi order dated 13.4.2012. Thus this ground of the Revenue is dismissed. 14. Ground no.3 is on the issue whether the Ld.CIT(A) was right in law in deleting the addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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