Lakme gets Tax Relief from ITAT [Read Order]

In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Mumbai bench has granted relief to the Lakme Lever Private Limited.

The Commissioner of Income Tax, while exercising his revisionary jurisdiction under the Income Tax Act held that the Assessing Officer, in his original assessment, had not added the employee’s contribution to PF of Rs.4,86,601 and contribution to ESIC of Rs.28,539, deposited by the appellant before the due date for filing of return of Income. It was also held that the AO has incorrectly allowed depreciation of Rs. 27,50,000 u/s 32 of the Act on non-competent fee.

The Tribunal held that the disallowance of payment for provident fund and ESICG not warranted since the same is duly covered in favor of the assessee by the decision of Hon’ble jurisdictional High Court in the case of CIT vs. Ghatge Patil Transport Ltd.

With regard to the claim of depreciation, the Tribunal noted that the claim was duly made by the assessee in the computation of income.

“Hence, it cannot be said that the A.O. has not applied his mind on this issue. In this regard, we place reliance upon the case law from the Hon’ble jurisdictional High Court in the case of State Bank of India vs. ACIT (WP No. 271 of 2018 vide order dated 16.06.2018) for the proposition that when the A.O. allows a claim on the basis of computation of income, it cannot be said that the same has been done without application of mind. Furthermore, we find that the issue of depreciation on intangible assets in the nature of goodwill has been decided in favor of the assessee by the decision of Hon’ble Apex Court in the case of CIT vs. Smifs Securities Ltd. [2012] 348 ITR 302 (SC). Hence, the claim of the depreciation on non compete fee can be considered on the anvil of these case laws. Hence, the view adopted by the A.O. cannot be said to be not a possible one,” the Tribunal said.