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TMI Blog2018 (8) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Revenue is that the ld.CIT(A) has erred in law and on facts in deleting additions of ₹ 1,14,84,375/-, ₹ 64,59,961/- and ₹ 36,33,728/- which were added by the AO by making disallowance of depreciation on non-compete territory rights in the assessment years 2003-04, 2005-06 and 2007-08 respectively. 3. Facts in all three years are common except variation of dates. In the assessment year 2002-03, notice under section 148 was issued on 30.3.2004 for reopening of the assessment. The AO intended to disallow depreciation on non-compete territory rights in that assessment years. Aggrieved with this notice, the assessee filed a Special Civil Application before the Hon ble Gujarat High Court. It appears that the Hon ble High Court has stayed the proceedings in the assessment year 2002-03. In subsequent assessment years the ld.AO disallowed the depreciation without adjudicating the issue specifically by observing that since the department has not yet accepted the assessee s claim for depreciation, the same is being disallowed . and that .. however, consequential effect would be given on the issue, if required, as per the decision of Hon ble Gujarat High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons or date of CIT(A) s order. The order of the AO passed under section 154 of the Act in the assessment year 2003-04 reads as under: ORDER U/S. 154 OF THE I.T. ACT, 1961 Vide application dated 22/08/2015 bearing ASK No.278240815008028, assesee had requested that in appeal effect for CIT(A)'s order dated 27/09/2006 the issue of depreciation of ₹ 1,14,84,375/- had not been given effect to. Further, no appeal was filed on this issue of depreciation before Hon'ble ITAT. Therefore, it according to assessee assumes finality and depreciation should be allowed in effect to CIT(A)'s order. 2. The claim of the assesee has been duly verified. It has been found that the issue of depreciation was left given effect to until SCA No.375 of 2005 is decided by Hon'ble Gujarat High Court in assessee's own case for A.Y. 2002-03. In this assessment year i.e. A.Y. 2002-03, the case was reopened u/s 147 of the IT Act. The reason recorded for reopening contained the issue of allowability of depreciation on non-compete territory rights . On being provided with the reason, assessee filed an SCA before Gujarat High Court and, thus, for all subsequent years in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. During A Y.2002-03 the case of the appellant was re-opened and the appellant had gone to the High Court through Special Civil Application No.375 of 2005. The Hon'ble Gujarat High Court vide their order dated 9/7/2012 quashed the proceedings u/s.147 of the Act but has not given its ruling on the merits of the case. Thus, according to A.O the order of Hon'ble High Court of Gujarat does not call into question the. validity of this disallowance. Hence, the A.O has refused to give claim of allowance of depreciation to the appellant for ₹ 1,14,84,375/-. During the appellate proceedings the appellant has brought to the notice of the undersigned that there are four assessment years in which the identical issue was involved. These four assessment year- are A.Y.2003-04, 2004-05, 2005-06 and 2007-08. The Hon'ble ITAT Ahmedabad vide their order in ITA No.575/Ahd/2013 for A.Y.2006-07 pronounced on 10/5/2013 has held at para-6 to 10 as follows:- 6. In ITA No. 575/Ahd/2013, i.e. revenue's appeal for the assessment y year 2006-07, the grievance raised by the Assessing Officer is as follows: That the learned CIT(A) has erred in law, and on facts, in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had given the same finding as quoted above in the assessment year 2003-04 and 2004-05. The Revenue, in those years, accepted the findings of the learned CIT(A) and had not filed appeal before the Tribunal against the findings of the learned CIT(A). Learned DR could not point out any distinguishing features in the above years under appeal. Therefore, we donot find any good reasons to interfere with the order of the learned CIT(A), which is confirmed and the ground of appeal of the revenue is dismissed. 8. It was in this backdrop, and for the same reasons the assessee's claim for depreciation of ₹ 48,44,971, on non- compete territory rights, was declined by the Assessing Officer. While doing so, the Assessing Officer observed that, considering the facts of the case and discussion made in this behalf in the assessment orders for AYs 2003-04, 2004- 05 and 2005-06, the claim is disallowed for the assessment year 2006-07 also and that however, consequential effect would be given on the issue, if required, as per the decision of Hon'ble Gujarat High Court . When the matter travelled before the CIT(A), the same directions were repeated but then once again came up bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court's order will not come to the rescue to the assesses in this case since there is no such finding or direction on merits, which can be given effect, in terms of Hon'ble Supreme Court's judgment in the case of Rajinder Nath Vs C/T[ 120 ITR 14). The relaxation under section 153(3), as held by Hon'ble Supreme Court in this case, comes to the rescue of the revenue only in respect of such findings or directions as are necessary for disposal of the matter. The matter having been decided on the ground of jurisdiction alone, there was no need to deal with the merits of the case, and, as such, following Hon'ble Supreme Court's judgment in the case of Rajinder Nath, the inherently limited scope of section 153(3) does not help the Assessing Officer. The disallowance of depreciation thus seems to have reached finality. The law is fairly we/I settled that once Assessing Officer accepts a particular position by not challenging the same in further appeal, it cannot be open to him to disturb the position having so reached finality, by appeal in another year. No doubt (here is no res judicata in income tax proceedings but principles of consistency do play an impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and bearing in mind entirety of the case, we approve the conclusion arrived at by the CIT(A) and decline to interfere in the matter. It can be seen from the above referred findings of the Hon'ble Tribunal that it has dealt with the issue of granting of depreciation on non compete territory rights and the chronological development in the orders passed by the A.Os, CIT(A) as well as Hon'ble Tribunal. The Hon'ble Tribunal at para-11 has clearly reflected upon the inaction of the revenue authorities to deal with the issue of depreciation on non-compete territory rights and thus has reached to the conclusion of upholding the order of the CIT(A) passed vide order No.CIT(A)-XI/62/ITAT/10-11 dated 18/12/2012 for A.Y.2006-07 under peculiar circumstances. It is also observed that the Department has not preferred the appeal against the order of CIT(A) for A.Yrs 2003-04 and 2004-05. It has been mentioned by the CIT(A) for both the assessment years i.e. A.Y.2003-04 and 2004-05 that the Hon'ble Gujarat High Court had admitted the appellants SCA. Further it was also held by the CIT(A) for these years that the matter is subjudice with Gujarat High Court. As the outcome of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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