Case Law Details
In DCIT, Ghaziabad vs. Kuantum Papers Ltd. (ITAT Delhi) decided on 1.09.2017, Revenue contended that CIT(A) has erred in law and on facts in allowing the depreciation on paper brands, which is a non-depreciable asset because its life is not limited.
The brief facts of the case were that a search and seizure action was conducted under section 132 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) on 4.5.2011 on the premises of the assessee. Further, in response to notice under section 153A of the Act, assessee filed his return declaring income of Rs. 17,53,54,906/- for AY 2008-09. Later on, notices under section 143(2) and 142(1) of the Act were also issued and AO completed the assessment vide order dated 31.3.2015 passed under section 143(3) of the Act by making addition of Rs. 4,10,67,290/- for AY 2008-09 on account of depreciation claimed. Aggrieved with the assessment order, assessee appealed before the CIT(A), who vide his order dated 20.12.2016 partly allowed the appeal by respectfully following the CIT(A)-IV, New Delhi order dated 16.2.2012 passed in Appeal No. 98/2010-11. Aggrieved with the order of the CIT(A), the Revenue was in appeal before the Delhi Tribunal.
In relation to the issue, DR relied upon the Order of the AO and reiterated the contentions raised in the grounds of appeal. On the contrary, Counsel of the assessee relied upon the order of the CIT(A) and stated he has passed a well reasoned order which does not need any interference. During the hearing, Counsel of the assessee filed a letter dated 6.7.2017 stating therein that in the case of the assessee, AO has passed an assessment order under section 143(3) of the Act dated 30/12/2010 for A.Y. 2008-09 and made the addition of Rs. 99,01,500/- on account of disallowed depreciation on paper brand on the ground that brands are not covered under intangible assets as per Section 32(1)(ii) of the Act.
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