Deepak Gaba And Others Vs State of Uttar Pradesh And Another (Supreme Court of India)
The ITAT Ahmedabad considered cross appeals filed by Jio Platforms Limited and the Revenue against the CIT(A)’s order dated 16 August 2024 for AY 2021-22. The Revenue challenged deletion of a Rs.2,761.60 crore depreciation disallowance on intangible assets and a Rs.42.49 crore addition relating to revenue received in advance. The assessee challenged disallowance of Rs.282.95 crore interest expenditure under Section 36(1)(iii).
On depreciation on intangible assets, the assessee had acquired Platform Business and FinTech Platform undertakings from group companies through slump sales in FY 2019-20. The intangible assets formed part of the opening block for AY 2021-22. The Assessing Officer disallowed depreciation of Rs.2,761.60 crore, questioning the transactions between group companies and treating the arrangement as a colourable device. The CIT(A), after examining the documents and assessments of the transferor companies, deleted the addition. The Tribunal noted that depreciation on the same assets had been examined and allowed in AY 2020-21 and that there was no material change in facts or law. It also noted that the assets had been put to use and generated revenue of Rs.274.50 crore. Following the principle of consistency, the Tribunal found no infirmity in the CIT(A)’s order and dismissed the Revenue’s ground.
