TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 185
X X X X Extracts X X X X
X X X X Extracts X X X X
....was received by the appellant on 25.01.2021. The appellant also claims the benefit of the orders passed by the Supreme Court in Re: Cognizance for Extension of Limitation, in Suo Motu Writ Petition (Civil) No. 3 of 2020, extending the period of limitation. 3. For the reasons stated in the application, the same is allowed and the delay in filing of the appeal is condoned. ITA 132 of 2021 1. This appeal has been filed by the appellant under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') challenging the Order dated 30.08.2019 passed by the learned ITAT, Bench 'B', New Delhi, in I.T.A. No. 2910/DEL/2017, titled ACIT, Circle - 9(2), New Delhi v. Fortis Hospitals Ltd., partly allowing the appeal filed by the respondent herein and disallowing the depreciation claimed by the appellant herein on the non-compete fee. The appeal further challenges the Order dated 15.12.2020 passed by the learned ITAT in Miscellaneous Application No. 72/DEL/2020 partly allowing the application filed by the appellant under Section 254(2) of the Act, however, upholding its finding vis-à-vis depreciation claimed by the appellant on the non-compete fee. 2. The appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed one hundred thousand rupees". The above quoted section clearly says that any person responsible for paying any sum in the nature of compensation is liable to deduct TDS equal to 10% of *such sum. The non compete fees paid by the assessee to the Wockhard Group is in the nature of a compensation paid by the assessee so that the assessee can do his business in an unfettered manner. Further, the non compete fees is in the nature of capital assets as assessee has himself declared, therefore the above quoted section squarely applies on the assessee. In view of the above discussion therefore the entire amount of non compete fee of an amount of Rs. 15.5 crores is being disallowed u/s 40(a)(ia) of the IT Act, 1961. Since, I am satisfied that assessee has concealed its income by furnishing inaccurate particulars of its income, therefore penalty proceedings u/s 271(1)(c) of the Act, is initiated separately." 5. Aggrieved of the above Assessment Order, the appellant filed an appea....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Taxman 576 (Delhi), has held that the noncompete fee cannot be termed as 'intangible asset' and therefore, depreciation claimed on the same could not be allowed. 8. As noted hereinabove, the appellant filed an application under Section 254(2) of the Act before the learned ITAT, being Miscellaneous Application No. 72/Del/2020. However, vide the impugned order dated 15.12.2020, the finding with respect to the claim of depreciation of non-compete fee was upheld by the learned ITAT. 9. The learned senior counsel for the appellant submits that the learned ITAT has exceeded its jurisdiction by delving into issues that were accepted by the Assessing Officer. He submits that the Assessing Officer had rejected the claim of the appellant on account of depreciation on non-compete fee, not on the ground that it was not an intangible asset but on the ground of non-deduction of TDS, thereby being disallowed under Section 40(a)(ia) of the Act. It was only this limited finding which was challenged by the appellant before the learned CIT(A). The Assessing Officer had therefore, accepted the claim of the appellant that the depreciation claim on non-compete fee could be claimed. The Revenue did no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o merit in the same. 12. As far as the question of jurisdiction is concerned, the finding of the Assessing Officer in his Assessment Order dated 20.03.2013 has been reproduced hereinabove. The same clearly show that the Assessing Officer did not go into the question as to whether the noncompete fee can be treated as an 'intangible asset', whereby the appellant would be entitled to claim of depreciation under Section 32(1)(ii) of the Act, or not. The claim of the appellant of depreciation was in fact rejected by the Assessing Officer. Therefore, there was no occasion for the respondent to have challenged the said order. In appeal, the CIT(A) went ahead and directed the Assessing Officer to allow the claim of depreciation on the non-compete fee treating the same to be an 'intangible asset'. It was this finding which was challenged by the respondent in appeal, including on the following ground: "2. The Grounds of appeal are as under: xxxxx 2. Ld. CIT(A) erred in law and on the facts of the case in direction the AO to allow depreciation on non compete fee treating it as intangible asset. The CIT(A) failed to appreciate that non compete fee is not covered in intangible assets as he....