Tax Tribunal Allows Additional Deduction and Depreciation for Assessee

The ITAT upheld the CIT(A)'s decision, allowing the additional ground for deduction under section 10AA of the IT Act and permitting depreciation on legal and professional charges. The Revenue's appeal was dismissed, benefiting the assessee for the Assessment Year 2007-08.

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Issues:
1. Admissibility of additional grounds of appeal regarding deduction under section 10AA of the IT Act.
2. Allowance of depreciation on capitalization of legal and professional charges.

Analysis:
1. The appeal was filed by the Revenue against the order passed by CIT(A)-V, New Delhi, regarding the deduction under section 10AA of the IT Act. The assessee had initially claimed a deduction of &8377; 14,83,714, which was later revised to &8377; 5,90,65,188 based on a speech by the Finance Minister. However, due to an amendment in Section 10AA brought by the Finance Act, 2009, the revised claim was not allowed by the Assessing Officer. The ITAT held that the retrospective amendment made the enhanced deduction applicable from 1/4/2006, benefiting the assessee for the Assessment Year 2007-08. The ITAT dismissed the Revenue's appeal, upholding the CIT(A)'s decision to allow the additional ground and grant the deduction under section 10AA.

2. Regarding the allowance of depreciation on legal and professional charges, the assessee had incurred &8377; 84,38,357 for taking over business from Hindustan Motors Ltd, which was disallowed by the Assessing Officer. The CIT(A) allowed the claim, stating that the charges were essential for acquiring the business units and formed part of the actual cost of acquisition. The ITAT, after considering the arguments, relied on the ITAT order in the assessee's own case for the previous assessment year and upheld the CIT(A)'s decision to allow the claim for depreciation on the professional charges. The ITAT dismissed the Revenue's appeal, affirming the CIT(A)'s order.

In conclusion, the ITAT upheld the CIT(A)'s decision on both issues, allowing the additional ground for deduction under section 10AA and permitting depreciation on legal and professional charges. The appeal of the Revenue was dismissed, and the order was pronounced on 20th October 2016.

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