2019 (9) TMI 1663 - AT - Income Tax

Tribunal rejects stay petitions on disallowed depreciation for brand value, emphasizing legal principles

The Tribunal dismissed the stay petitions filed by the assessee for multiple assessment years regarding the disallowed depreciation claimed on brand ... Depreciation claimed on brand value - AO disallowed depreciation on the brand value due to the fact that no cost has been incurred to acquire brand value - As submitted that petitioner had got strong prime facie case in its favour since depreciation on the brand value is intangible asset eligible for depreciation - HELD THAT:- From the perusal of the assessment order, it is clear that the AO had disallowed depreciation citing that no cost was incurred in acquisition of intangible asset namely brand value. It appears that the issue in the present appeal is covered against the assessee company by the decision of Co-ordinate Bench of the Tribunal in the case of RMKV Fabrcis. [2019 (4) TMI 2072 - ITAT CHENNAI] - Therefore, the submissions made on behalf of the petitioner that there is strong prime facie case in favour of the petitioner cannot be accepted. The petitioner had not made out any case satisfying other two factors namely balance of convenience and financial hardship. It is settled position of law that Tribunal or Court cannot grant stay of demand if the assessee fails to satisfy any of the factors enumerated above. We are not inclined to grant stay of demand and accordingly, the stay petition filed by the assessee stands dismissed. Issues:Stay of demand for various assessment years based on disallowed depreciation claimed on brand value.Analysis:The assessee filed stay petitions seeking a stay of demand for multiple assessment years due to disallowance of depreciation claimed on brand value. The Assessing Officer disallowed depreciation on the brand value citing no cost incurred in its acquisition. The petitioner argued that brand value is an intangible asset eligible for depreciation, presenting a strong case in its favor. However, the Departmental Representative opposed the stay petition. Upon reviewing the assessment order, it was evident that the issue was covered against the assessee by a previous decision of the Tribunal. The Tribunal noted that the petitioner failed to establish a strong prima facie case, balance of convenience, or financial hardship, which are essential factors for granting a stay of demand. Consequently, the Tribunal dismissed the stay petitions for all the assessment years.The Tribunal emphasized that it cannot grant a stay of demand if the assessee does not satisfy the necessary factors, as established by law. The decision was based on the principle that a Tribunal or Court cannot grant a stay of demand if the petitioner fails to meet the criteria of a strong prima facie case, balance of convenience, and financial hardship. The Tribunal's decision was consistent across all the assessment years for which stay petitions were filed, as the facts and issues were identical in each case. Therefore, the Tribunal dismissed all the stay petitions filed by the assessee for the various assessment years. The order was pronounced on the 30th day of September 2019 in Chennai.