TaxTMI 
TaxTMI 
2022 (8) TMI 1298
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....ground remaining un-adjudicated. We note that additional ground was not adjudicated by the ITAT as there was no discussion on the subject. However, since the assessee has submitted photocopy of the ITAT receipt for filing additional ground in the interest of justice, we deem it appropriate that ITA No. 570/Mum/2018 be recalled only to consider the veracity and adjudication of the said additional ground raised by the assessee. 5. In the result, ITA No. 570/Mum/2018 is recalled only to the extent of considering the claim of the assessee claim regarding additional ground as discussed above." 3. The assessee raised additional grounds of appeal in respect of depreciation on Non-Compete Fee u/s. 32 of the Act. The additional grounds of appeal raised by assessee read as under:= "a) On the facts and in the circumstances of the case, the Ld. Commissioner of Incometax (Appeals) ought to have allowed the claim of depreciation amounting to INR 128,38,65,000/- on non-compete fees, under Section 32 of the Act; b) On the facts and in the circumstances of the case, the Ld. Commissioner of Incometax (Appeals) ought to have allowed the said claim of depreciation on the ....
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.... order-in-appeal dated 08.11.2017. The Ld. Commissioner of Incometax (Appeals) did not record any specific finding regarding the claim of depreciation on non-compete fees under Section 32 of the Act. 5. Against the impugned order-in-appeal dated 08.11,2017 passed by the Ld. Commissioner of Income-tax (Appeals), the Assessee has preferred an appeal (being ITA No. 570/Mum/2018) before this Hon'ble Tribunal, on certain other grounds decided by the Ld. Commissioner of Income-tax (Appeals) against the Assessee. The Revenue has also preferred an appeal (being ITA No, 711/Mum/2018) against the said order-inappeal, challenging the allowance of non-compete fee as deferred revenue expenditure ordered by the Ld. Commissioner of Income-tax (Appeals). 6. The additional grounds raise a pure question of law that does not warrant appreciation of any additional fact(s), as all the relevant fact(s) required to be taken into account for entertaining and adjudicating the additional grounds are part of the record. It is imperative to state that the question of law arising from the additional grounds goes to the root of the matter and clearly transpires from the proceedings before ....
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....ate prayer and directed the Assessing Officer to treat Non-compete Fee as deferred revenue expenditure for a period of eight years. The Department assailed the findings of CIT (A) including the findings on non-compete fee in appeal before the Tribunal in ITA No.711/Mum/2018 (supra). The Tribunal vide order dated 06/01/2020 dismissed the ground raised by the Revenue assailing the relief allowed by CIT (A) on the issue of non-compete fee. Against the Tribunal order, the Department is in appeal before the Hon'ble High Court. 5.2 The ld. Authorized Representative for the assessee submitted that the assessee initially did not raise any ground on the issue of Non-compete Fee before the Tribunal as the assessee had got relief on the alternate plea to treat the Non-compete Fee paid as deferred revenue expenditure. Subsequently, the assessee by way of additional grounds of appeal claimed that depreciation be allowed to the assessee u/s.32 of the Act on Non-compete Fee. The ld. Authorized Representative for the assessee submitted that the Tribunal in the case of Piramal Glass Ltd vs. DCIT reported as 80 taxmann.com 68 and in the case of ACIT vs. Shreya Life Sciences Pvt. Ltd. 2016(1) TMI ....
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....ange Ltd. reported as 305 ITR 227. 8. We have heard the submissions made by rival sides. The solitary issue before us for adjudication is with respect to assessee's claim of depreciation amounting to Rs.128,38,65,000/- on Non-compete Fee u/s. 32 of the Act. Since, the issue has been dealt with by the Assessing Officer and the CIT(A), non fresh evidence is required to be adduced for the adjudication of the issue raised by way of additional grounds. Hence, the additional grounds of appeal are admitted and decided as under. 9. The assessee had paid Non-compete Fee to the tune of Rs.513,54,60,000/-. The assessee claimed depreciation u/s. 32 on Noncompete Fee being an intangible asset. The Assessing Officer disallowed assessee's claim. The assessee carried the issue in appeal before the First Appellate Authority. Before the CIT(A) the assessee raised primary contention that the assessee's claim of depreciation on Non-compete Fee is allowable and to support its contention the assessee placed reliance on the following decisions: (i) CIT vs. Ingersoll Rand International Industries Ltd.(supra) (ii) Pentasoft Technologies Ltd (supra) In alternate without prejudice to ....
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....-compete agreement and claimed depreciation on such asset. While dismissing the Revenue's Appeal against the Judgment of the Tribunal, following observations were made : "We may recall the Assessing Officer does not dispute that the expenditure was capital in nature since by making such expenditure, the assessee had acquired certain enduring benefits. He was, however, of the opinion that to claim depreciation, the assessee must satisfy the requirement of Section 32(1)(ii) of the Act, in which Explanation 3 provides that for the purpose of the said sub-section the expression "assets" would mean ( as per clause (b) ) intangible assets, being known-how, patents, copyrights, trade marks, licenses, franchises or any other business or commercial rights of similar nature. In the opinion of the Assessing Officer, the non-compete fee would not satisfy this discrimination. Going by his opinion, no matter what the rights acquired by the assessee through such non-compete agreement, the same would never qualify for depreciation in section 32(1)(ii) of the Act as being depreciable intangible asset. This view was plainly opposed to the well settled principles. In case of Techno Shares & ....