2020 (8) TMI 71 - ITAT MUMBAI

Revision u/s 263 - claim for depreciation on the leasehold rights - claim of depreciation of capitalized amount of stamp duty paid - HELD THAT:- Stamp duty expenses incurred for taking the property under consideration on lease for a period of 33 years was to be construed as an “intangible asset” within the meaning of Sec. 32(1)(ii), and thus eligible for depreciation, cannot be accepted. Apart from that, we are also unable to comprehend that as to how a simpliciter payment of stamp duty expenses on the lease agreement (pending registration), would bring into existence an intangible asset of the same genus, as that of the six specified categories of assets, viz., knowhow, patents, copyrights, trademarks, licenses or franchises, as contemplated in Sec. 32(1)(ii) .

Insofar the plethora of judicial pronouncements that have been pressed into service by the assessee, in order to drive home its claim that the expenses incurred towards payment of stamp duty expenses on the lease agreement (pending registration) was in the nature of an “intangible asset” falling within the meaning of Sec. 32(1)(ii) same being distinguishable on facts would thus not assist its case.

A.R had not brought to our notice any judicial pronouncement/order, wherein it has been held that the stamp duty expenses incurred on a lease agreement (pending registration) was to be construed as an “intangible asset” eligible for depreciation u/s 32(1)(ii) - We are unable to comprehend that as to on what basis the A.O while framing the assessment had vide his order passed u/s 143(3), dated 12.02.2015, therein allowed the assessee’s claim for depreciation on the capitalised amount of stamp duty expenses (pending registration).

Allowing of the assessee’s claim for depreciation on the stamp duty expenses (pending registration) by the A.O cannot be held to a possible view in law, therefore, no infirmity arises from the order passed by the Pr. CIT u/s 263, dated 30.03.2017, observing, that the allowing of the assessee’s claim for depreciation of ₹ 1,39,11,652/- i.e @25% on the amount of stamp duty deposited, had rendered the order passed by the A.O u/s 143(3), dated 12.02.2015, as erroneous insofar it was prejudicial to the interest of the revenue. On finding no infirmity in the order passed by the Pr. CIT u/s 263 - Decided against assessee.