{"id":2065,"date":"2010-09-24T16:29:34","date_gmt":"2010-09-24T10:59:34","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=2065"},"modified":"2010-09-24T16:29:34","modified_gmt":"2010-09-24T10:59:34","slug":"piem-hotels-vs-dcit-itat-mumbai-s-263-revision-only-on-ground-of-non-application-of-mind-by-ao-not-proper-licenses-approvals-are-intangible-asset-us-321ii-eligible-for-depreciation","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/piem-hotels-vs-dcit-itat-mumbai-s-263-revision-only-on-ground-of-non-application-of-mind-by-ao-not-proper-licenses-approvals-are-intangible-asset-us-321ii-eligible-for-depreciation\/","title":{"rendered":"Piem Hotels vs. DCIT (ITAT Mumbai)"},"content":{"rendered":"<table width=\"150\" border=\"0\" align=\"right\">\n<tr>\n<td><a href=\"https:\/\/itatonline.org\/archives\/?dl_id=255\" onclick=\"if (event.button==0) \r\n     setTimeout(function () { window.location = 'http:\/\/itatonline.org\/downloads.php?varname=dl_id=255&varname2=piem_hotel_revision_intangible_asset_depreciation.pdf'; }, 100)\" ><strong>Click here to download the judgement (piem_hotel_revision_intangible_asset_depreciation.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n<p><strong>S. 263 Revision only on ground of non-application of mind by AO not proper. Licenses &#038; Approvals are \u201cintangible asset\u201d u\/s 32(1)(ii) &#038; eligible for depreciation <\/strong><\/p>\n<p>The assessee, a hotel, incurred expenditure on <em>acquiring licenses and permissions from various government bodies<\/em>. This was classified as \u201c<em>goodwill<\/em>\u201d in the books and depreciation was claimed on the ground that it was an \u201cintangible asset\u201d u\/s 32(1)(ii). The AO allowed the claim. The CIT passed an order u\/s 263 in which he took the view that the <em>AO had not applied his mind to the issue and that the order was \u201cerroneous &#038; prejudicial to the interests of the revenue\u201d<\/em>. The CIT set aside the assessment order and directed the AO to pass a fresh order. On appeal by the assessee, HELD allowing the appeal:<\/p>\n<p>(i) The CIT had <strong>not recorded any finding<\/strong> to show how the assessment order was erroneous and prejudicial to the interest of the revenue. <strong>Merely because the AO had not examined whether the approvals \/ registrations etc. amounted to intangible assets and had not applied his mind to the examination and verification of the allowability of depreciation on intangible assets did not mean that the assessment order was erroneous and prejudicial to the interests of the revenue<\/strong>. It was not the case of the CIT that depreciation was not allowable on such items of intangible assets; <\/p>\n<p>(ii) An authority exercising revisional power cannot direct the lower authority to complete the assessment in particular manner. <strong>UOI vs. Tata Engineering<\/strong> AIR 1998 SC 287 followed;<\/p>\n<p>(iii) On merits, <strong>approvals\/registrations etc amount to \u201cintangible assets\u201d and entitled to depreciation u\/s 32(1) (ii)<\/strong>.<\/p>\n<div class=\"journal2\">\n<strong>Note<\/strong>: On the scope of revision u\/s 263 see <strong><a href=\"http:\/\/bit.ly\/263Revision\">CIT vs. Vikas Polymers<\/a><\/strong> (Delhi High Court). On the meaning of the term \u201cintangible asset\u201d see <a href=\"http:\/\/bit.ly\/Techno_SC\"><strong>Techno Shares vs. CIT<\/strong><\/a> (SC)<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>S. 263 Revision only on ground of non-application of mind by AO not proper. Licenses &#038; Approvals are \u201cintangible asset\u201d u\/s 32(1)(ii) &#038; eligible for depreciation<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/archives\/piem-hotels-vs-dcit-itat-mumbai-s-263-revision-only-on-ground-of-non-application-of-mind-by-ao-not-proper-licenses-approvals-are-intangible-asset-us-321ii-eligible-for-depreciation\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-2065","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/2065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=2065"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/2065\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=2065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=2065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=2065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}