Issue raised against the deletion of disallowance of depreciation on Intangible assets

This Income Tax Appellate Tribunal ruling addresses the Revenue's appeal against the deletion of disallowed depreciation on intangible assets for the assessment years 2010-11 and 2014-15. The Assessing Officer had disallowed depreciation on technical know-how, goodwill, and non-compete fees, a stance previously taken in earlier assessment years. However, the CIT(A) deleted this addition, relying on previous Tribunal orders.

IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH,A‟ PUNE – VIRTUAL COURT

BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND
SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER

ITA Nos.1725 & 1726/PUN/2018
Assessment Years : 2010-11 & 2014-15

DCIT, Panvel Circle,
Panvel
PAN : AABCJ1620M
Appellant 

Vs. 

M/s. Johnson Matthey Chemicals
India Pvt. Ltd.,
Plot No.6A, MIDC,
Industrial Estate, Taloja, Panvel,
Dist. Raigad – 410 208
Respondent

Assessee by Shri Rajendra Agiwal
Revenue by Shri A.M. Mahedevan Krishnan

Date of hearing 03-05-2021
Date of pronouncement 03-05-2021

ORDER

These two appeals by the Revenue emanate from the common order dated 10-08-2018 passed by the CIT(A)-2, Thane in relation to the assessment years 200-11 & 2014-15. Since a common issue is raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.

2. The only issue raised by the Revenue in these two appeals is against the deletion of disallowance of depreciation on Intangible assets. A.Y. 2010-11 :

3. Briefly stated, the facts of the case are that the assessee is a wholly owned subsidiary of Matthey Finance B.V., Netherlands. Johnson Matthey Plc, UK is the ultimate holding company. The assessee company is engaged in the business of manufacture and sale of Nickel hydrogenated catalysts. It filed return for the year declaring total income of Rs.45,91,38,138/-. Depreciation was claimed on certain Intangible assets: technical know-how, goodwill and non-compete fees. Taking cognizance of the fact that such depreciation was disallowed in the assessment orders for the A.Ys. 2004-05 to 2012-13 (except for A.Y.2010-11 under consideration), the AO disallowed depreciation on Intangible assets amounting to Rs.4,92,46,594/-. The ld. CIT(A), relying on orders of the Tribunal order for the A.Yrs. 2005-06, 2006-07, 2009-10 and other years, deleted the entire addition. Aggrieved thereby, the Revenue has come up in appeal before the Tribunal.

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