CLC & Sons vs. ACIT (ITAT Delhi Special Bench)

DATE: (Date of pronouncement)
DATE: October 8, 2010 (Date of publication)

Click here to download the judgement (clc_special_bench_neutral_member.pdf)

In the interest of judicial discipline, a Member who has taken a view should not be party to a Special Bench

A 3 Member Special Bench was constituted to decide whether the assessee was entitled to claim depreciation u/s 32 on intangible assets termed ‘Goodwill’. At the hearing, the assessee raised a preliminary objection that as the Judicial Member on the Special Bench has already taken a view about allowability of depreciation on goodwill in the case of Bharatbhai J. Vyas vs. ITO 97 ITD 248 (Ahd.) judicial discipline requires that this Special Bench should consist of persons who have not already taken a view.

Pursuant to this, the Judicial Member expressed the opinion that having already taken a view on the issue of allowability of depreciation on goodwill, it will be in the interest of judicial discipline to recuse himself from the hearing of the appeal before the Special Bench.

Note: In Harsha Bhogle 114 TTJ 266 (Mum) it was held that reference to Special Bench is not permitted when appeal is pending before the High Court. For the law on depreciation on intangible assets, see Piem Hotels vs. DCIT (ITAT Mumbai)

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