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TMI Blog2024 (4) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. ITAT has essentially followed the principle of consistency insofar as the case of the respondent assessee is concerned. We consequently find no justification to interfere with or disturb the ultimate conclusions rendered by the ITAT, notwithstanding it having failed to notice or consider the judgment rendered in Sharp Business System. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV For the Appellant : Mr. Ruchir Bhatia, Sr. SC. For the Respondent : Mr. Anmol Anand and Ms. Sheetal Kandpal, Advs. ORDER 1. The Principal Commissioner seeks to impugn the judgment rendered by the Income Tax Appellate Tribunal dated 14 January 2020 and has proposed the following questions of law for our consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d prescribed under rule 8D r.w.s. 14A without suggesting any other objective method? 2.6 Whether depreciation u/s 32 of the Income tax Act is allowable on payment on non-compete fee? 2.7 Whether the Tribunal was correct in upholding the decision of the ld. CIT(A) with respect to deletion of addition of Rs. 26,80,668/- on account of depreciation of non-compete fee on the ground that the department had not made similar additions in the earlier years notwithstanding the facts that the principle of res-judicata does not apply to tax matters and also that non-compete fee was not a depreciable intangible asset?‖ 2. We note that insofar as the applicability of Section 14A of the Income Tax Act, 1961 ['Act'] to assessments which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder any other section from what is deemed to be the total income of the company (the assessee). 20. This Court vide order dated 29.09.2015 in ITA no. 593 of 2015 titled as PCIT v. Bhushan Steels Ltd., has held that since Explanation to Section 115JB does not specifically mention Section 14A of the Act, the view taken by the ITAT therein regarding deletion of addition cannot be held to be erroneous. The relevant paragraph of the said decision reads as under: 7. Question No. 6 concerns deletion of addition of Rs. 89,00,000 made by the AO for computation of the income for the purposes of Minimum Alternate Tax ('MAT ) under Section 115 JB of the Act. This pertained to the expenditure incurred for earning exempt income under Section 14A rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and is added back to book profit under clause (f) of Explanation 1 to section 115JB of the Act, the same would amount to doing violence with the statutory provision, viz., subsections (1) and (5) of section 115JB of the Act. It is also pertinent to mention here that the amounts mentioned in clauses (a) to (i) of Explanation 1 to section 115JB(2) are debited to the statement of profit and loss account, then only the provisions of section 115JB would apply. The disallowance under section 14A of the Act is a notional disallowance and therefore, by taking recourse to section 14A of the Act, the amount cannot be added back to book profit under clause (f) of Explanation 1 to section 115JB of the Act. It is also pertinent to mention he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115-J. 23. A conspectus of the aforementioned judicial pronouncements would lead us to safely conclude that the scheme of Section 115JB, particularly in relation to Clause (f) of Explanation 1 therein, does not envisage any addition of disallowance computed under Section 14A of the Act to calculate MAT as per Section 115JB of the Act. Rather, both the provisions stand separately as no correlation exists between them for the purpose of determining the taxable income. The addition of the concerned disallowance made by the AO while computing MAT is dehors the provisions of the Act and hence, cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Assessing Officer the right to noncompete acquired by the assessee is only a right in personam and therefore the assessee is not entitled to claim depreciation on the noncompete fee. Learned Assessing Officer does not refer to any change of circumstances from the earlier years so as to deviate from the view that was taken for earlier years. We therefore do not find anything illegality or irregularity in the Ld. CIT(A) following the view taken for the earlier years under identical circumstances. Ground No. 6 is accordingly devoid of merits and is dismissed. 6. The ITAT has essentially followed the principle of consistency insofar as the case of the respondent assessee is concerned. 7. We consequently find no justification to interfere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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