2019 (7) TMI 1976 - AT - Income Tax

Disallowance of depreciation on the cost of know-how and intangibles acquired from ORG of their division of Adex Business purchased along with all assets and liabilities the compendious heading of Goodwill - HELD THAT - As gone through the order of the Tribunal and noticed that this issue was not adjudicated. Assessee stated that he is only interested in recalling of the ground. We are of the view that the issue raised by assessee has not been adjudicated. Hence, the same requires adjudication. Hence, qua ground No. 3 only, the appeal of assessee is recalled.

Summary

Issues involved:
Rectification of mistake apparent on record in the order of Tribunal dated 20.03.2017 regarding disallowance of depreciation on the cost of know-how and intangibles acquired by the Appellant from ORG.

Detailed Analysis:

1. Rectification of Mistake Apparent on Record:
The assessee sought rectification of a mistake apparent on record in the Tribunal's order dated 20.03.2017 related to the disallowance of depreciation on the cost of know-how and intangibles acquired from ORG. The grounds for rectification included the failure to allow depreciation on assets acquired along with goodwill, as per the IT Rules and purchase agreement terms.

2. Grounds for Rectification:
The assessee contended that the CIT(A) erred in upholding the disallowance of depreciation on the acquired know-how and intangibles, despite the business purchase agreement clearly specifying the inclusion of these assets along with goodwill. The appellant argued that depreciation should have been allowed on the 2/3rd value of the consideration paid or as determined by the Assessing Officer, including goodwill.

3. Non-Adjudication of the Issue:
Upon review, it was found that the Tribunal did not adjudicate on the issue raised by the assessee regarding the depreciation on know-how and intangibles. The assessee expressed interest in recalling the ground for adjudication, which was not contested by the Departmental Representative.

4. Decision and Recall of Appeal:
Considering the non-adjudication of the issue, the Tribunal decided to recall the appeal solely with respect to ground No. 3 concerning the disallowance of depreciation on acquired assets. The decision was made to allow for proper adjudication of the issue raised by the assessee.

5. Final Order:
The order for the recall of the appeal on ground No. 3 was pronounced in the open court on 26-07-2019, indicating the Tribunal's acknowledgment of the need for further examination and resolution of the depreciation issue related to the acquired know-how and intangibles.

This detailed analysis highlights the key aspects of the judgment, focusing on the rectification sought by the assessee regarding the depreciation treatment of acquired assets, the grounds presented for rectification, the non-adjudication of the issue by the Tribunal, the decision to recall the appeal for proper adjudication, and the final order pronouncement date.