2025 (10) TMI 535

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....nt Year (AY) 2010-11, whereby the Tribunal has partially allowed the appeal filed by the respondent herein and dismissed the appeal filed by the Revenue / appellant herein. 6. The Revenue / appellant has proposed the following three substantial questions of law in this appeal:- A) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was correct in deleting the disallowance of depreciation on the Dharuhera unit amounting to Rs. 92,34,278/-, on assets that were discarded during the year and were no longer in the ownership of the Respondent? B) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was justified in holding that a separate AMP adjustment was uncalled for given that the distribution business of the Respondent was already benchmarked separately, when the TPO had treated it as a separate class of transaction and benchmarked it correctly? C) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was right in directing the AO/TPO to add 20% of the reimbursement of expenses and complete the benchmarking of the international transaction when the TPO had benchmarked the A....

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.... the respondent/assessee resulted in increased sales in India for products, albeit developed by the AE but sold by the respondent/assessee. 18. The fact that the comparables chosen by the TPO had a net margin lower than that registered by the respondent/assessee would persuade us to hold that no upward adjustment concerning AMP expenses ought to have been made. 19. Lastly, the application of the BLT tool, by the TPO, in determining ALP, injected the order issued by him, which was incidentally approved by the DRP, with a legal error. [See Sony Ericsson Mobile Communications India case]. Conclusion: 20. Thus, for the foregoing reasons, we are not inclined to interfere with the impugned order passed by the Tribunal, as no substantial question of law arises for our consideration. 21. The appeal is disposed of in the aforesaid terms. 22. The application for condonation of delay in re-filing is rendered infructuous. 22.1 The application is, accordingly, closed." 8. In view of the submission made by Mr Rai, based on the judgment in the case of the assessee itself, substantial questions of law B & C as proposed do not arise ....

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....ts mentioned in Section 50, there was surplus on the full value of consideration received or accruing as a result of transfer of plant and machinery or the building. It is not the finding of the Assessing Officer that the block of assets entitled to the same percentage of depreciation ceased to exist or there was a surplus in the block of assets carrying the same rate of depreciation. The Assessing Officer has proceeded on the basis that the division itself constitutes a separate and an independent block of assets. Appendix to the Rules as noticed above, is not a unit/division specific but is rate of depreciation specific, as all assets prescribed the same rate of depreciation are clubbed and are a part of the same block of assets. The view we have taken finds resonance and acceptance in two decisions of the Delhi High Court in Commissioner of Income Tax versus Eastman Industries Limited, 174 Taxman 344 and Commissioner of Income Tax versus Oswal Agro Mills Limited, (2012) 341 ITR 467 (Del.)." 12. The Court thereafter took into consideration the Direct Taxes Circular no. 469 issued on 23.09.1986. The same reads as follows: "6.3 As mentioned by the Economic Adminis....

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....#8223;. Acceptance of this contention would mean that the assessee is to be directed to maintain the details of each asset separately and that would frustrate the very purpose for which the amendment was brought about. It is also essential to point out that the Revenue is not put to any loss by adopting such method and allowing depreciation on a particular asset, forming part of the "block of assets" even when that particular asset is not used in the relevant assessment year. Whenever such an asset is sold, it would result in short term capital gain, which would be exigible to tax and for this reason, we say that there is no loss to Revenue either. 34. The upshot of the aforesaid discussion is that though we are not entirely agreeing with the reasoning of the Tribunal contained in the impugned judgment, we are upholding the conclusion of the Tribunal based on the "block of assets" as discussed above. The consequence would be to dismiss these appeals. However, there will be no order as to costs." 14. Rejecting the contention similar to the one advanced with respect to interpretation of Section 32, the Division Bench in Ansal Properties (supra) observed as follows: ....