TaxTMI 
TaxTMI 
2022 (11) TMI 8
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....and are being disposed of by this common order, for the sake of convenience. 2. The assessee is engaged in the business of manufacture and trading of pharmaceuticals, nutritional, dianostic and vascular products. 3. The only issue urged by the revenue in all the three years relate to the direction of Ld CIT(A) to treat "non-compete fees" as deferred revenue expenditure. 4. The facts relating to this issue are that the assessee had acquired the "Base Domestic Formulations" business from M/s Piramal Healthcare Limited, vide Business Transfer Agreement dated 21st May 2010 on slump sale basis. The consideration paid by the assessee consisted of "non-compete fees" of Rs.513,54,60,000/-. The company capitalised the same and claimed depreciatio....
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....ound in its appeal in ITA No.570/Mum/2018 claiming depreciation on the non-compete fee. Though the Tribunal had adjudicated the appeal of the assessee, vide its order dated 06-01-2020, it inadvertently omitted to adjudicate the additional ground raised by the assessee. Hence the Tribunal, vide its order 08-03-2021 passed in M A No.229/Mum/2020, recalled its order for the limited purpose of adjudicating the additional ground raised by the assessee. Subsequently, the Tribunal adjudicated the above said additional ground, vide its order dated 02-08-2022, wherein the Tribunal allowed the claim of depreciation by observing as under:- "12. In the present case payment of non-compete fee in accordance with terms of agreement between the assessee ....
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.... depreciation in the appeal filed by the assessee in AY 2011-12, vide its order dated 02-08- 2022. He also submitted that the Tribunal has given two different decisions on the very same view. However, he submitted that, if the original claim of depreciation is allowed, then there was no necessity to consider alternative claim. The confusion has occurred only because the Tribunal had omitted to adjudicate the addition ground relating to claim of depreciation. Accordingly he submitted that the assessee's claim of depreciation may be allowed and in that case, the question of allowing deduction as deferred revenue expenditure will not arise. 10. We notice that the Tribunal has accepted the payment of noncompete fee as an intangible asset in AY....
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.... price was US$ 3.8 billion, of which rupee equivalent of US$ 2.20 billion was paid by the assessee at the conclusion of transaction. The remaining amount of consideration was agreed to be paid in rupee equivalent of four installments of US$ 400 million beginning in 2011. At the end of each financial year, the assessee revalued the amount payable to M/s Piramal Healthcare Ltd. 12. In AY 2011-12, the revaluation resulted in foreign exchange gain. The AO applied the provisions of sec.43A of the Act and accordingly reduced the amount of foreign exchange gain from the value of assets, which resulted in corresponding reduction of depreciation. During the years relevant to AY 2014-15 and 2015-16, the revaluation resulted in foreign exchange loss.....
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.... has not accepted the decision taken by AO in AY 2011-12. We notice that both the AO and the assessee has taken stands to suit their convenience in each of the years. Be that as it may, we notice that this issue has been examined by the co-ordinate bench in AY 2011-12 and this issue has been restored back to the file of Ld CIT(A) with the following observations:- "28. From the above we note that the above provision is special provision consequential to change in rate of exchange of currency. Learned CIT(A) has only referred to aspect that under section 43A its applicability depend upon the satisfaction of the criteria that the asset was acquired by the assessee from a country outside India. Hence, learned CIT(A) held that since this crite....