2016 (2) TMI 922 - AT - Income Tax

Rectification of apparent mistake in the order of Tribunal - claim of depreciation on management rights denied - Held that - We have considered rival contentions and gone through the order of the Tribunal wherein the Tribunal has restored assessee s ground for claim of depreciation on management rights for deciding as per the order of the Tribunal in assessee s own case in the preceding year. However there is no order of the Tribunal in assessee s own case therefore it amounts to mistake apparent from record. The Tribunal in its order has quoted various decisions of the Hon ble High Courts and Tribunal wherein depreciation was allowed in case of intangible assets. Accordingly we rectify the order dated 10-7-2015 to the extent of observation made in para 10 of the order and direct the AO to allow assessee s claim of depreciation following the decisions of Hon ble High Court and Tribunal. Before parting with the matter it is pertinent to mention that recently the Hon ble Supreme Court in the case of Smifs Securities Ltd. 2012 (8) TMI 713 - SUPREME COURT held that intangible assets in the form of goodwill is eligible for claim of depreciation. - Decided in favour of assessee.

Summary

Issues:
Rectification of apparent mistake in Tribunal's order regarding claim of depreciation on management rights.

Analysis:
The judgment revolves around the rectification of an apparent mistake in the Tribunal's order dated 10-7-2015 concerning the assessee's claim of depreciation on management rights. The assessee filed miscellaneous applications seeking rectification, arguing that the Tribunal erroneously remanded the matter to the AO based on a decision in the assessee's own case, which did not exist. The ld. AR contended that it was the first year of the claim and no such order existed, highlighting the mistake in the Tribunal's observation in para 10 of the order. Conversely, the ld. DR argued that there was no mistake in the Tribunal's order.

Upon considering the contentions, the Tribunal acknowledged the absence of an order in the assessee's own case, deeming it a mistake apparent from the record. The Tribunal referred to various decisions of High Courts and Tribunals allowing depreciation on intangible assets in para 9 of the order. Consequently, the Tribunal rectified the order to allow the assessee's claim of depreciation, directing the AO to follow the decisions cited in para 9. Notably, the Tribunal referenced a recent Supreme Court judgment affirming the eligibility of intangible assets like goodwill for depreciation claims.

In conclusion, the Tribunal allowed all the assessee's miscellaneous applications, rectifying the order to permit the claim of depreciation on management rights in line with the decisions of the Hon'ble High Courts and Tribunal. The judgment emphasizes the importance of correcting apparent mistakes and aligning decisions with established legal precedents.