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TMI Blog2017 (3) TMI 1823X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Y. 2009-10 on 30.09.2009 declaring loss of Rs. 1,53,42,442/-. 'Book Losses' under section 115JB of the Income Tax Act, 1961 (in short 'the Act') was computed at Rs. 7,68,06,987/-. The return was processed under section 143(1) of the Act and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 22.04.2013 wherein the total income of the assessee as per normal provisions of the Act was determined at Rs. 1,92,65,840/- in view of the following additions/disallowances: - (i) T.P. adjustment under section 92CA(3) Rs. 2,80,96,447/- (ii) Disallowance of deduction under section 35D Rs. 10,77,727/- (iii) Disallowance of excess claim of depreciation Rs. 54, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Rs. 54,34,110/- without appreciating the fact that the tax auditors in report in Form No. 3CD have also noted that the provisions of Explanation 4A to section 43(1) of the Act are applicable. The learned D.R. was heard in support of this ground and placed strong reliance on the decision of the Assessing Officer (AO) on this issue. 4.2 Per contra, the learned A.R. of the assessee at the very outset drew the attention of the Bench to the orders of the Coordinate Bench of the Tribunal in the assessee's own case in ITA No. 3077/Mum/2012 dated 25.03.2015 for A.Y. 2007-08 and submitted that an identical issue was considered and decided in favour of the assessee by the Coordinate Bench, following the order of another Coordinate Bench in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the APB. The acquisition of the machinery from Bilag is not disputed, it is also not disputed that the machinery is a capital asset and whatever expense is incurred on such outlay, it shall bear the character of capital and added to the cost. Since this is a fact, then applying the ratio laid down by Hon'ble Bombay High Court in the case of Ciba of India Ltd. vs CIT, reported in 70 Taxman 505 (Bom), wherein it has been held "... this being so, ... this amount would form part of the cost of the assessment for the purpose of depreciation..." 32. In such a case, the additional depreciation, claimed by the assessee on Bilag machinery is to be allowed. We also accept that the action of the assessee did not suffer from any infirmity. 33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2005 for A.Y. 2007-08 and submitted that an identical issue was considered and decided in favour of the assessee by the Coordinate Bench, following the order of the assessee's won case for A.Y. 2006-07 in ITA No., 3078/Mum/2012 dated 28.03.2014. 5.3.1 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial pronouncements cited and placed reliance upon (supra). We find that the Coordinate Bench of this Tribunal in its order in ITA No. 3077/Mum/2012 dated 25.03.2015 in the assessee's own case for A.Y. 2007-08 has decided the identical issue in favour of the assessee wherein, following the decision of the Hon'ble Apex Court in the case of Smifs Securities Ltd. (348 ITR 302 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon'ble Supreme Court in the case of Smifs Securities Ltd reported in 348 ITR 302, wherein the Hon'ble Supreme Court has held that intangibles like goodwill are eligible for depreciation. 46. However in so far as non compete fee is concerned, the nature of this payment is now covered u/s 28(va) of the Income Tax Act, 1961 hence, it would be revenue in nature. 47. We, therefore, direct the AO to allow the depreciation on goodwill as per law and consider the payment of non compete fee, in terms of section 28(va), to consider to allow Rs. 3,05,40,600/- as revenue expenditure." 8. Considering the above and respectfully following the decision of the coordinate bench as well as following the principle of consistency, the additional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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