TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 26
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....rinciples of natural justice. 3. The Ld. CIT(A) has grossly erred on fact as well as in law by withdrawing the depreciation amounting to Rs. 1,20,93,750/- u/s 32(1)(ii) of the IT, Act 1961 on intangible asset i.e. non- compete fee, as per definition u/s 2(f), which allowed by him in the appeal order passed u/s 250 by setting aside the AO's order u/s 154 disallowing depreciation claimed, and applied the judicial order arbitrary, which accepted by him as not related to the matter of appellant. 4 The Ld. CIT (A) has grossly erred to disallow the brought forward accumulated losses of Rs. 5,24,34,375/- by withdrawing the allowed depreciation on the ground that it was not available to assessee. 5 The Ld. CIT (A) has grossly erred by exceeding his authority to pass order u/s 154 by reversing not only his own order but ignored the order passed by his predecessor in the same issue in AY 12-13, setting aside the AO's order u/s 154 to disallow depreciation of Rs. 1,20,93,750/- claimed u/s 32(1)(ii) on intangible asset i.e. non-compete fee, as per definition u/s 2(f), without going into the merit of fact of assessee and a judicial order which was not applicable to the appellant. ....
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....CIT(Appeals) following the judgment of the Hon'ble Delhi High Court has passed the impugned order. Before us learned counsel vehemently argued that decision of Hon'ble Delhi High Court in the case of M/s Sharp Business System v. CIT (supra) is under challenge before the Hon'ble Supreme Court. Learned counsel relied on the ratio of decision laid down by the Hon'ble Madhya Pradesh High Court in the case of Sagar Co-operative Central Bank Ltd. vs. CIT (1990) 186 ITR 292 (MP). He submitted that there are conflicting decisions on the issue of allowability of depreciation on non-compete fee. Learned counsel submitted that the decision of the Hon'ble Delhi High Court is under challenged before the Hon'ble Supreme Court and the issue whether depreciation on non-compete fee is allowable deduction is pending for consideration in the case of Sharp Business System v. CIT (C.A. No. 4072/2014). He submitted that the learned CIT(Appeals) committed gross error in rectifying its order u/s 154 of the Act. In support of his contention learned counsel relied upon the judgment of the Hon'ble Madhya Pradesh High Court in the case of Sagar Co-operative Central Bank Ltd. v. CIT (1990) 186 ITR 292 (MP). He....
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....eliance on the decision of Hon'ble Andhra Pradesh High Court rendered in the case of B.V.K. Seshavataram v. CIT [1974] 75 Taxman 491 (Andhra Pradesh). He, therefore, strongly opposed the submissions of the learned counsel for the assessee and relied upon the impugned order. 6. In rejoinder, learned counsel for the assessee submitted that the moot question is, whether, provisions as embodied in section 154 can be invoked if the issue in question is debatable. He submitted that admittedly there are conflicting views by different High Courts on the issue in question. That goes to prove that the issue, whether, depreciation on non-compete fees is allowable, is highly debatable and such a debatable issue cannot be amenable to rectification u/s 154 of the Act. He further submitted that on this point of law appeal filed by the assessee has been admitted. He drew our attention towards the order dated 19.03.2024 (supra). 7. We have heard rival contentions and perused the material available on record. Undisputed facts in the present case are that the learned CIT(Appeals) rectified his order dated 20.01.2020 u/s 154 of the Act on the basis of ratio laid down by the Hon'ble Jurisdictional Hi....
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....S. Balaram, ITO v Volkart Bros (1971) 82 ITR 40 (SC), wherein the Hon'ble Supreme Court has held that "a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may be conceivably two opinions". 9. Further reliance is placed upon the judgment of the Hon'ble Calcutta High Court in the case of CIT v. Orient Paper Industries Ltd. [(1994) 208 ITR 158 (Cal.), wherein the Hon'ble Court after following its earlier decision in the case of V.R. Sonti v. CIT concluded that, "if there is a divergence of judicial opinion on a question of law or two conceivable views are possible on it, proceedings for rectification under section 154 or under section 254(2) of the Income-tax Act, 1961 cannot be taken at all. 10. Further, the Hon'ble Punjab & Haryana High Court in the case of CIT v. Rajesh Talkies in Income-tax Reference nos. 64 & 65 of 1981 held that issue being debatable on which different opinion opinions have been expressed, therefore, the error pointed out in the order of the Income-tax Officer cannot be said to be one apparent from the record and, therefore, the same coul....