आदेश/ORDER

PER WASEEM AHMED, ACCOUNTANT MEMBER:

The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)–8, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-XIV/516/13-14 dated 12.03.2015 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961(here-in-after referred to as "the Act") dated 21/02/2014 relevant to Assessment Year (AY) 2011-12.

2. The assessee has raised the following grounds of appeal:

1. In law and in the facts and circumstances of the appellant’s case, the learned CIT(A) has grossly erred in dismissing Ground No. 1 of the appellant’s appeal before him challenging the very validity of the assessment order impugned before him, on the ground that it was general in nature and did not require adjudication by him.

2. Without prejudice to the foregoing, in law and in the facts and circumstances of the appellant’s case, the learned CIT(A) has grossly erred, even after appreciating that the sole ground for the learned Assessing Officer to disallow the appellant’s claim for depreciation on the initial payment for leasehold rights to land @25% prescribed for intangible assets was that the appellant had made that claim only by addressing a letter during the course of the assessment proceedings and not by filing a revised return, and that it was incumbent upon him, as the Appellate Authority, to consider that claim, in rejecting it. He ought to have appreciated, inter alia, that the appellant’s leasehold rights to land were intangible assets as defined by the Explanation to Section 32(1) and, therefore, its claim for depreciation was clearly allowable.

3.1 Without prejudice to the foregoing, in law and in the facts and circumstances of the appellant’s case, the learned CIT(A) has grossly erred in rejecting the appellant’s alternative claim for deduction for the full amount of initial payment for the leasehold rights in question as revenue expenditure, on the ground that the facts of the appellant’s case were different from the facts in DCIT v. Sun Pharmaceutical Industries Ltd. (227 CTR 206) without considering the following VITAL facts of the appellant’s case:

(a) That the appellant’s facts, far from being different from the facts of the case before the jurisdictional Gujarat High Court as erroneously concluded by him, were not only similar but in fact better inasmuch as in the appellant’s case, the annual lease rental was just Rupee 1 per sq. meter and the period of the lease was 30 years whereas in the case before the Gujarat High Court, the annual lease rental was much higher at Rs.40 per sq. meter and so also the period of lease which was 99 years, and being such, the ratio of that decision was applicable to the appellant’s case with added force;

(b) That in arriving at its decision in DCIT v. Sun Pharmaceutical Industries Ltd. (227 CTR 206), the Gujarat High had applied the decisions of the Supreme Court in Empire Jute Co. Ltd. v. CIT (124 ITR 1) and CIT v. Madras Auto Service P. Ltd. (233 ITR 468) wherein it had been held that unless the expenditure was in the capital field, it could not be regarded as expenditure for the acquisition of an enduring benefit;

(c) that the Gujarat High Court had applied the above decisions of the Supreme Court even as it very well knew that the lease in the case before it was for as many as 99 years (whereas the period of lease in the appellant’s present case was only 30 years).

The learned CIT(A) has further grossly erred in failing to appreciate that the facts of the appellant’s case cannot be distinguished from the facts of the case before the Gujarat High Court in the manner he had done vide para 8.3 of his order and in particular, as under:

"8.3 Thus what follows from the above is individual facts of the case are decisive to the issue. In none of the lease deeds filed before me, the lease rent is as low as Rs.40 per year. Thus the facts are not similar. None of the agreement is with GIDC. Hence