2014 (5) TMI 399 - HC - Income Tax

Addition to be sustained or not - Accrual of income - Advisory fees Difference between the amount of investment advisory fees computed Maximum rates specified under regulation 52(2) of the Securities and Exchange Board of India (Mutual Fund) Regulation Held that - Franklin Templetion Asset Management (India) Pvt. Ltd. 2011 (9) TMI 39 - BOMBAY HIGH COURT - the Tribunal s view cannot be said to be suffering from any perversity or error of law apparent on the face of the record - The revenue has been unable to point out anything to the contrary or order of the superior Court thus, no substantial question of law arises for consideration Decided against Revenue. Depreciation at 60% on peripheral devices Held that - Tribunal was rightly of the view that all the items that are referred to in the order of the AO are used along with the computer system of the assessee company - the peripherals are used in the computer - the components are ancillary and used along with the computer Decided against Revenue.

Summary

Issues:
1. Whether the Income Tax Appellate Tribunal was justified in upholding the order of the Commissioner of Income Tax (Appeals) regarding the addition made by the Assessing Officer related to investment advisory fees.
2. Whether the Income Tax Appellate Tribunal was justified in considering certain items as part of a block of computers for depreciation purposes instead of categorizing them as peripheral devices.

Analysis:

1. The first issue raised was whether the Income Tax Appellate Tribunal was correct in supporting the Commissioner of Income Tax (Appeals) in not sustaining the addition made by the Assessing Officer concerning the investment advisory fees. The Court noted that a Division Bench had previously considered a similar question for the same assessee in a previous case. The Court found that the Tribunal's decision was not flawed or legally erroneous. The Court, therefore, concluded that the issue favored the assessee based on the previous Division Bench decision, and the current appeal did not raise any substantial question of law.

2. The second issue involved whether certain items should be considered part of a block of computers for depreciation purposes or categorized as peripheral devices. The Tribunal had previously addressed this issue in the case of the same assessee for a different assessment year. The Tribunal found that all the items in question were used in conjunction with the computer system of the assessee company. Despite arguments that certain components were used independently of the computer, the Tribunal determined that the peripherals were indeed utilized with the computer system. As a result, the Tribunal upheld the Commissioner of Income Tax (Appeals) decision. The Court found that the Tribunal's decision was reasonable based on the specific facts and circumstances of the case. Since there was no legal flaw in the factual findings, the Court concluded that no substantial question of law arose on this issue. Therefore, the appeal was dismissed for lacking merit.