Dismissed

M/S.Carborandum Universal v. the Assistant Commissioner of

Madras HC5 Jun 2018TCA/191/2018

Case brief

AI extract

What is this about?

The High Court dismissed the appeal against the ITAT, upholding a prior Division Bench decision that an assessee cannot claim deduction under Section 35AB for technical know-how and simultaneously claim depreciation on the same expenditure under Section 32.

What did the court decide?

The appeal filed under Section 260A of the Income Tax Act, 1961, is not entertained and the impugned order of the ITAT is confirmed.

M/S.Carborandum Universal Vs the Assistant Commissioner of — Specific Performance | Madras HC (2018)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 05.06.2018

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CORAM

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THE HON'BLE MS. INDIRA BANERJEE, CHIEF JUSTICE AND THE HON'BLE MS.JUSTICE P.T.ASHA

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T.C. (A) No.191 of 2018 Carborundum Universal Ltd. Parry House No.43, Moore Street Chennai – 600 001. .. Appellant Vs The Assistant Commissioner of Income Tax Large Tax Payer Unit-1 1775, Jawaharlal Nehru Inner Ring Road Anna Nagar Western Extension Chennai – 600 101. .. Respondent

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PRAYER: Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal 'D' Bench, Chennai, dated 19.5.2016 made in I.T.A.No.1737/Mds/2014.

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For Appellant : Mr.Vikram Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan

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http://www.judis.nic.in

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(2)

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JUDGMENT

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(Delivered by Ms.Indira Banerjee, Chief Justice )

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This appeal is against an order of the Income Tax Appellate Tribunal 'D' Bench, Chennai, dated 19.5.2016, dismissing the appeal, being I.T.A.No.1737/Mds/2014, relating to the assessment year 20052006, and holding that the deduction under Section 35AB of the Income Tax Act, 1961 having admittedly been granted, no depreciation could be allowed under Section 32 of the said Act.

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The question of whether an assessee can claim deduction

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under Section 35AB of the said Act of 1/5^th of technical know-how fees and again capitalise the technical know-how fees along with the cost of plant and machinery and claim depreciation under Section 32 of the Said Act has been answered against the assessee by a Division Bench of this Court in Carborandum Universal Ltd. v. The Joint Commissioner of Income Tax, Chennai, reported in MANU/TN/2690/2012 , where the

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Division Bench held:

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“4. As far as the fourth question as to whether the

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assessee was entitled to depreciation or deduction under Section 35AB is concerned, it is seen from the documents placed before this Court that the expenditure incurred by the assessee was for the

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http://www.judis.nic.in

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(3)

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purpose of getting the technical know how by the assessee on manufacturing and processing of goods. Going by the provisions of Section 35AB and the Explanation on technical know how, we have no hesitation in holding that the assessee is entitled to the relief under Section 35AB only, and not to the claim of depreciation under Section 32. Consequently, the decision of the Tribunal to that extent, stands

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confirmed.”
3. The appeal is, therefore, not entertained. Consequently,
C.M.P.No.3205 of 2018 is closed.
(I.B., CJ.) (P.T.A., J.)
Index : No
Internet : Yes
sasi
To:
1. The Registrar
Income Tax Appellate Tribunal
'D' Bench, Chennai.

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