TaxTMI 
TaxTMI 
2018 (8) TMI 647
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....mpete territory rights in that assessment years. Aggrieved with this notice, the assessee filed a Special Civil Application before the Hon'ble Gujarat High Court. It appears that the Hon'ble High Court has stayed the proceedings in the assessment year 2002-03. In subsequent assessment years the ld.AO disallowed the depreciation without adjudicating the issue specifically by observing that "...since the department has not yet accepted the assessee's claim for depreciation, the same is being disallowed.... and that ..... however, consequential effect would be given on the issue, if required, as per the decision of Hon'ble Gujarat High Court.". 4. In assessment year 2005-06, the assessment order was passed on 28.12.2007 and in assessment year 2007-08 it was passed on 16.12.2009. The AO has not independently examined the issue in any of the assessment years. He simply disallowed the claim. Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld.First Appellate Authority. The ld.CIT(A) has disposed of all these appeals by observing as under: "this issue is to be decided by the AO in the light of final decision of Hon'ble High Court" and h....
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.... and depreciation should be allowed in effect to CIT(A)'s order. 2. The claim of the assesee has been duly verified. It has been found that the issue of depreciation was left given effect to until SCA No.375 of 2005 is decided by Hon'ble Gujarat High Court in assessee's own case for A.Y. 2002-03. In this assessment year i.e. A.Y. 2002-03, the case was reopened u/s 147 of the IT Act. The reason recorded for reopening contained the issue of "allowability of depreciation on non-compete territory rights". On being provided with the reason, assessee filed an SCA before Gujarat High Court and, thus, for all subsequent years in which addition was made on this ground, CIT(A) directed this office to decide the issue in light of the final decision of the Hon'ble High Court for A.Y. 2002-03. Thus, the effect to CIT(A) order was kept in abeyance until the decision of Gujarat High Court's Order. 3. On arrival of the order of Gujarat High Court in Special Civil Application No.375 of 2005 dated 09/07/2012, it was observed that the Hon'ble court has quashed the proceedings u/s 147 of the IT Act by holding reopening of the case invalid and notice u/s 148 as hull and void....
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....During the appellate proceedings the appellant has brought to the notice of the undersigned that there are four assessment years in which the identical issue was involved. These four assessment year- are A.Y.2003-04, 2004-05, 2005-06 and 2007-08. The Hon'ble ITAT Ahmedabad vide their order in ITA No.575/Ahd/2013 for A.Y.2006-07 pronounced on 10/5/2013 has held at para-6 to 10 as follows:- "6. In ITA No. 575/Ahd/2013, i.e. revenue's appeal for the assessment y year 2006-07, the grievance raised by the Assessing Officer is as follows: That the learned CIT(A) has erred in law, and on facts, in deleting the addition of Rs. 48,44,971 on account of disallowance of depreciation on "non compete territory rights". 7. Briefly stated, the relevant material facts are like this. The assesses has claimed depreciation of Rs. 48,44,971, on non- compete rights treated by the assessee as intangible assets in the depreciation schedule. This claim was made for the first time in the assessment year 2002-03, and to examine veracity of this claim, for which no details were alleged to have been furnished by the assessee, the assessment was reopened under section 147 of the Act. T....
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....9;s claim for depreciation of Rs. 48,44,971, on non- compete territory rights, was declined by the Assessing Officer. While doing so, the Assessing Officer observed that, "considering the facts of the case and discussion made in this behalf in the assessment orders for AYs 2003-04, 2004- 05 and 2005-06, the claim is disallowed for the assessment year 2006-07 also" and that "however, consequential effect would be given on the issue, if required, as per the decision of Hon'ble Gujarat High Court". When the matter travelled before the CIT(A), the same directions were repeated but then once again came up before a coordinate bench of this Tribunal, and the coordinate bench, in deviation from the past stand, held that the learned CIT(A) was not justified in deciding the matter on the basis of an order which is yet to be pronounced, and remitted the matter back to the file of the CIT(A). In the meantime, Hon'ble Gujarat High Court had delivered judgment for the assessment year 2002-03 and quashed the reassessment proceedings under section 147 on the ground of jurisdiction. There was thus no adjudication on merits. However, the CIT(A) deleted the impugned disallowance of depreciati....
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....the case, and, as such, following Hon'ble Supreme Court's judgment in the case of Rajinder Nath, the inherently limited scope of section 153(3) does not help the Assessing Officer. The disallowance of depreciation thus seems to have reached finality. The law is fairly we/I settled that once Assessing Officer accepts a particular position by not challenging the same in further appeal, it cannot be open to him to disturb the position having so reached finality, by appeal in another year. No doubt (here is no res judicata in income tax proceedings but principles of consistency do play an important role in all walks of life as much as in the income tax proceedings. As observed by Hon'ble Supreme Court, in the case of Parashuram Pottery Works Ltd Vs ITO [ 106 ITR 1), "......we have to bear in mind that the policy of law is that" there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasijudicial controversies as it must in other spheres of human activity...". In any case, there is not even a whisper of the reason for comi....
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....nd thus has reached to the conclusion of upholding the order of the CIT(A) passed vide order No.CIT(A)-XI/62/ITAT/10-11 dated 18/12/2012 for A.Y.2006-07 under peculiar circumstances. It is also observed that the Department has not preferred the appeal against the order of CIT(A) for A.Yrs 2003-04 and 2004-05. It has been mentioned by the CIT(A) for both the assessment years i.e. A.Y.2003-04 and 2004-05 that the Hon'ble Gujarat High Court had admitted the appellants SCA. Further it was also held by the CIT(A) for these years that the matter is subjudice with Gujarat High Court. As the outcome of SCA were awaited, the department did not file any appeal before the Hon'ble ITAT against the order of CIT(A) for these two years. The coordinate bench of the ITAT, for A.Y.2005-06 relied upon the decision of department not filing the appeals before ITAT for A.Y.2003-04 & 2004-05 and dismissed the appeal of revenue for A.Y.2005-06. Considering all the facts above, I have no option but to decide this issue in light of decision Hon'ble ITAT for A.Y.2006-07 quoted at para 3.2 above. Hon'ble ITAT has itself stated that the A.O has never given any independent reasons fo....