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2018 (3) TMI 519

user of brand name, trademark, logo for 3 years and similarly, the intellectual property right such as design, drawings, manufacturing processes and technical knowhow in respect of the products manufactured by unit was acquired, we hold that the expenditure incurred in this regard as valued by the approved valuer is capital expenditure on which the claimed depreciation was allowable - Decided in favour of assessee - Depreciation on Chemical Recovery Plant - Held that:- Again relying on DCIT vs. ABC Paper Ltd [supra] wherein held AO vide his remand report as mentioned that he has duly verified the statutory Excise returns filed with the Central Excise Department alongwith Cenvat credit records wherein the said Cenvat credit pertaining the Chemical Recovery Plant (CRP) was entered and also its corresponding entries in the Excise records - RG 23 C Part II (Entry book of duty credit of capital goods) and tallied the same with the Central Excise records, original invoices and original IGPs. The original IGPs which are made at the time receipt of the material were also produced before the AO during the remand proceeding and were duly verified by him and tallied with the relevant invo .....

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ee. Further, in response to notice u/s. 153A of the Act, assessee filed his return declaring income of ₹ 17,53,54,906/- for AY 2008-09. Later on, notices u/s. 143(2) and 142(1) of the Act were also issued and AO completed the assessment vide order dated 31.3.2015 passed u/s. 143(3) of the Act by making addition of ₹ 4,10,67,290/- for AY 2008-09 on account of depreciation claimed. Aggrieved with the assessment order, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 20.12.2016 has partly allowed the appeal by respectfully following the Ld. CIT(A)-IV, New Delhi order dated 16.2.2012 passed in Appeal No. 98/2010-11. Aggrieved with the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 4. Ld. DR relied upon the Order of the AO and reiterated the contentions raised in the grounds of appeal. 5. On the contrary, Ld. Counsel of the assessee has relied upon the order of the Ld. CIT(A) and stated he has passed a well reasoned order which does not need any interference. During the hearing, Ld. Counsel of the assessee has filed a letter dated 6.7.2017 stating therein that in the case of the assessee, AO has passed an assessment order u/s .....

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the assessee company and deleted all the disallowances made by the Ld. AO. Against the order of the Hon'ble CIT(A)-IV, Kanpur dated 20.12.2016, the Income Tax Department has filed appeals before the ITAT for the aforesaid Assessment Years vide appeal No. 1339/Del/2017, 1340/Del/2017, 1341/Del/2017, 1342/Del/2017, 1343/Del/2017, 1344/Del/2017, 1345/Del/2017 & 1346/Del/2017. In view of the above, he requested that respectfully following the ITAT, A Bench decision dated 11.5.2017 on the additions in dispute, all the Appeals of the Revenue may be dismissed. 6. We have heard both the parties and perused the relevant records, especially the impugned order. For the sake of convenience, we are reproducing herewith the relevant portion of the impugned order passed by the Ld. CIT(A):- With regard to the addition on account of depreciation on chemical recovery plant, I have carefully gone through the assessment order, written submission filed as well as verbal argument of the Ld. ARs. Moreover, it is seen that the AO has made addition only to keep the matter live. Nothing has been mentioned in assessment order as to how it is related to evidence collected in search. Although AY 2013- .....

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of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed As can be seen from the above, the definition of intangible assets under Section 32(1 )(ii) is an inclusive definition which not only includes know-how, patents, copyrights, trademarks, licences, franchises but also any other business or commercial rights of similar nature. Therefore, the interpretation of the AO - that since brand is not specifically mentioned in Section 32(1) (ii), it cannot be equated with trade mark and hence, depreciation on the same is not admissible - appears to be based on lack of proper appreciation of the provisions of the above Section which specifically includes not only trade mark but also any other business or commercial rights of similar nature . Further, since trade mark has not been specifically defined under the I T. Act, as pointed out by the Ld. AR vide written submission reproduced supra, we have to rely on the definition of trade mark under the Trade Marks Act, 1999. As per Section 2(zb) of the Trade Marks Act, 1999 trade mark includes mark and the definition of mark as per Section 2(m) of .....

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rks, licenses, franchises, the claim of depreciation is indeed admissible thereupon. We accordingly direct the A.O to allow the claimed depreciation on the above assets. In view of the facts and circumstances and statutory provisions as discussed above and respectfully following the judicial pronouncements on the issue cited supra and also considering the rule of consistency as the assessee s claim for depreciation on the said brands has been allowed by the AO in the earlier two assessment years, I find that the impugned addition of ₹ 99,01,500/- made by the AO cannot be sustained. The same is, therefore, deleted. 5.1 This finding of the Ld. CIT (A) could not be controverted by the department before us. The department also could not point out any judicial precedents in favour of the revenue on this issue. We, therefore, uphold the finding of the Ld. CIT (A) on this issue and dismiss this ground of appeal of the department. 6.2 After perusing the aforesaid finding of the Tribunal, we are of the considered view that the issue in dispute in the present appeal, relating to allowing the depreciation on paper brand is squarely covered by the aforesaid decision of the ITAT, hence, w .....

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very Plant was not put to use during the year under consideration as certain parts were still under construction / testing stage as per details retrieved from details of addition of fixed assets submitted by the assessee on sample basis. However, as argued by the Id. AR, the total depreciation (including additional depreciation) claimed by the assessee for the above plant was ₹ 7,67,09,481/- which included depreciation on factory building at ₹ 22,73,462/- and depreciation on plant and machinery at ₹ 7,44,36,109/-. The Assessing Officer has disallowed the depreciation on plant and machinery, but has allowed depreciation on the factory building which is part and parcel of the same Chemical Recovery Plant. It is argued by the Ld. AR, both the building and plant and machinery were compositely completed and put to use together in March 2008. It is argued that the AO s action in partly allowing depreciation on the above factory while disallowing depreciation on the remaining part is bad in law and facts. Further, it is argued by the Ld. AR that the said Chemical Recovery Plant was fully commissioned on 21.03.2008 and it started its operations from the said date. The sai .....

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atutory Excise returns filed with the Central Excise Department alongwith Cenvat credit records wherein the said Cenvat credit pertaining the Chemical Recovery Plant (CRP) was entered and also its corresponding entries in the Excise records - RG 23 C Part II (Entry book of duty credit of capital goods) and tallied the same with the Central Excise records, original invoices and original IGPs. The original IGPs which are made at the time receipt of the material were also produced before the AO during the remand proceeding and were duly verified by him and tallied with the relevant invoices. The AO has not made any adverse comment whatsoever on merit. Considering the above, I find that the impugned addition of ₹ 7,44,36,109/- made by the AO cannot be sustained on facts or in law. The same is, therefore, deleted. 7.1 Keeping in view of the facts and circumstances of the present case as well as the finding of the ITAT, as reproduced above, we are of the view that the issue in dispute has already been decided by the Tribunal against the Revenue and in favour of the assessee, therefore, respectfully following the aforesaid decision of the ITAT, we decide the issue in dispute against .....

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