TMI Blog2021 (11) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... . Deduction in respect of education cess and secondary higher education cess u/s 37(1) - HELD THAT:- The issue raised in the additional ground is a pure legal issue, which does not require any verification of facts. Therefore, we admit the same for adjudication. As in the case of Sesa Goa Limited [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] had held education cess is an allowable expenditure as the word cess is conspicuously absent under the provisions of section 40(a)(ii) . The Mumbai Bench of the Tribunal in the case of Voltas Limited [ 2020 (7) TMI 125 - ITAT MUMBAI] had admitted additional ground of appeal with regard to the claim of education cess and adjudicated the matter in favour of the assessee, by following the judgment of the Hon'ble Bombay High Court in the case of Sesa Goa Limited - In the light of the aforesaid judicial pronouncements, we hold that education cess is to be allowed as deduction. It is ordered accordingly. - IT(TP)A No. 287/Bang/2021 - - - Dated:- 12-10-2021 - George George K., Member (J) And B.R. Baskaran, Member (A) For the Appellant : V. Nageshwar Rao, Advocate For the Respondents : Sumer Singh Meena, CIT (OSD)-DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and non-routine AMP expenses was ₹ 60.36 crore. The TPO accordingly held that the difference between the above said amount of ₹ 60.36 crore and ₹ 27.85 crore is liable to be adjusted. Accordingly, he adjusted ₹ 32.50 crore as transfer pricing adjustment. 3.2. The Ld. Dispute Resolution Panel (DRP) confirmed the TP adjustment made by the AO/TPO. 3.3. Aggrieved, the assessee preferred an appeal to the ITAT. The learned AR submitted that the issue raised is covered by the order of the Tribunal in assessee's own case for assessment year 2015-2016 in IT(TP)A No. 2491/Bang/2019 (order dated 16.02.2021). It was submitted that for fresh determination of ALP of AMP expenses the case was restored to the files of AO/TPO by the Tribunal for assessment year 2015-2016. The learned AR stated that similar view may be taken in this case also. 3.4. The learned DR supported the orders of the Income Tax Authorities. 3.5. We have heard rival submissions and perused the material on record. The Tribunal in assessee's own case for assessment year 2015-2016 had restored the issue of ALP determination for the AMP expenses to the files of AO/TPO for de novo consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed on those years by the AO. Accordingly, the AO disallowed the claim of depreciation amounting to ₹ 1,35,90,554 for this assessment year also after discussing in detail about the merits of the claim. 4.2. The view taken by the AO was confirmed by the DRP in its directions dated 29.03.3021. 4.3. Aggrieved, the assessee has raised this issue before the Tribunal. The learned AR submitted that an identical issue was considered by the Tribunal in assessee's own case for assessment year 2015-2016 (supra). It was submitted that the Tribunal for assessment year 2015-2016 followed its earlier order for assessment years 2011-2012 and 2008-2009 and decided the issue in favour of the assessee by holding that the assessee is entitled to depreciation on intangible assets. 4.4. The learned Departmental Representative strongly supported the direction of the DRP. 4.5. We have heard rival submissions and perused the material on record. An identical issue was considered in assessee's own case by the co-ordinate Bench of the Tribunal for assessment year 2015-2016. The Tribunal for assessment year 2015-2016 followed the Tribunal order for the assessment year 2011-2012 and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax (Appeals) ['CIT(A)', for short] has come to the conclusion that the authorised representatives had filed copies of the Orders of the High Court ordering amalgamation of the above two Companies; that the assets and liabilities of M/s. YSN Shares and Securities Private Limited were transferred to the assessee for a consideration; that the difference between the cost of an asset and the amount paid constituted goodwill and that the assessee-Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee Company stood increased. This finding has also been upheld by Income Tax Appellate Tribunal ['ITAT', for short]. We see no reason to interfere with the factual finding. 7. One more aspect which needs to be mentioned is that, against the decision of ITAT, the Revenue had preferred an appeal to the High Court in which it had raised only the question as to whether goodwill is an asset under Section 32 of the Act. In the circumstances, before the High Court, the Revenue did not file an appeal on the finding of fact referred to hereinabove. 8. For the afore-stated reasons, we ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003-2004 continues to operate and no proceedings under the Act were initiated to disturb the same. 12.3 We also note that the Ld. DR have not brought anything on records suggesting that any action against the assessee was taken under section 147 of the Act on account of escapement of income. 12.4 In view of above there remains no ambiguity that the assessee is eligible for the depreciation in respect of the intangible assets as discussed above. Accordingly, we do not find any reason to interfere in the order of Ld. CIT(A). 12.5. Thus, the ground of appeal of the Revenue is dismissed. In AY 2011-12, the Ld. CIT(A) had deleted the disallowance of depreciation on intangible assets and hence the Revenue was in appeal before the Tribunal. The coordinate bench, following the decision rendered in 2008-09, confirmed the order of Ld. CIT(A) in deleting the disallowance in AY 2011-12. 8. We notice that the co-ordinate benches are taking a consistent view on this matter. Accordingly, following the above said decision of coordinate bench, we direct the assessing officer to delete the disallowance of depreciation on intangible assets. 4.6. In view of the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid by a Assessee towards the cess , when it comes to computing income chargeable under the head profits and gains of business or profession . 5.4. The Hon'ble High Court also placed reliance on the CBDT Circular dated 18.05.1967, which clarified that upon omission of the term cess from the present section 40(a)(ii) of the I.T. Act, only rates or taxes needs to be disallowed, and hence, education cess ought not to be treated as Income-tax to be disallowed u/s. 40(a)(ii) of the I.T. Act. 5.5. The Hon'ble Rajasthan High Court in the case of CIT v. Chambal Fertilizers and Chemical Limited (D.B. IT Appeal No. 52 of 2018 (judgment dated 31.07.2018) had held education cess is not to be disallowed u/s. 40(a)(ii) of the I.T. Act. The relevant finding of the Hon'ble Rajasthan High Court, reads as follows:- 13. On the third issue in appeal no. 52/2018, in view of the circular of CBDT where word Cess is deleted, in our considered opinion, the tribunal has committed an error in not accepting the contention of the assessee. Apart from the Supreme Court decision referred that assessment year is independent and word Cess has been rightly interpreted by the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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