Bombay High Court
Pr. Commissioner Of Income Tax-10, ... vs India Medtronic Pvt. Ltd. on 15 April, 2026
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
18.itxa.53.20.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 53 OF 2020
Pr. Commissioner of Income Tax-10
Mumbai .. Appellant
Versus
India Medtronic Pvt Ltd .. Respondent
ANJALI Mr. Akhileshwar Sharma, Advocates for the Appellant.
TUSHAR
ASWALE
Digitally signed by
ANJALI TUSHAR Mr. Nishant Thakkar, with Jasmin Amalsadvala i/b Lumiere Law
ASWALE
Date: 2026.04.16
15:24:22 +0530
Partners, Advocates for the Respondent.
CORAM: B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE: APRIL 15, 2026
P. C.
1. The above Appeal is filed by the Appellant-Revenue challenging the order dated 17th January 2018 passed by the Income Tax Appellate Tribunal, Bench Mumbai. The Assessment Year in question is A. Y. 2010-11.
According to the Revenue, the impugned order gives rise to the following three questions of law:-
"(A). Whether on the facts and circumstances of the case and in law, Hon'ble ITAT erred in relying upon the decision of Thomas Cook India Ltd. (ITAs/1261 & 1238/Mum/2015 dated 31.05.2016) and apply the principle laid down therein, wherein it is held that the transactions in dispute (AMP expenses) is not covered by the provisions of section 92B or Page 1 of 5 APRIL 15, 2026 Aswale ::: Uploaded on - 16/04/2026 ::: Downloaded on - 16/04/2026 20:38:34 :::
18.itxa.53.20.doc 92B(1) of the Act and hence it is not an International transaction?.
(B). Whether on the facts and circumstances and in law the Hon'ble ITAT is justified in deleting the disallowance of depreciation on plant and machinery and Building in AY 2010-11, ignoring the fact that the assessee itself during the assessment proceedings has put forth the disallowable amount of depreciation relatable to the assets treated and attributed towards manufacturing activity by the assessee, where in fact there was no manufacturing activity?"
(C). Whether on the facts and circumstances and in law the Hon'ble ITAT is justified in deleting the disallowance of payment made to doctors, ignoring the fact that the expenditure occurred by assessee is violation of clause 6.8 of IMC Regulations and unlawful which is not allowable u/s 37(1) of the IT Act, 1961.?"
2. As far as Question (A) is concerned, the Tribunal relied upon its decision in Thomas Cook (India) Ltd dated 31st May 2016. It has been brought to our attention that an Appeal from the decision of the Tribunal in Thomas Cook (India) Ltd has been admitted by this Court on 26th August 2019 in Income Tax Appeal No.712 of 2017 with Income Tax Appeal No.713 of 2017. We, accordingly, admit the above Appeal on Question (A).
3. As far as Question (C) is concerned, we find that the same also is a substantial question that requires consideration in light of the decision of the Hon'ble Supreme Court in Apex Laboratories (P) Ltd v/s Deputy Commissioner of Income-tax [2022] 135 taxmann.com 286 (SC).
Accordingly, the above Appeal is also admitted on Question (C).Page 2 of 5
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18.itxa.53.20.doc
4. As far as Question (B) is concerned, we find that the same does not give rise to any substantial question of law. The reason we say this is because of the findings given by the Tribunal in paragraph 4 of the impugned order. For the sake of convenience, paragraph 4 of the impugned order is reproduced hereunder:-
"GOA-17 is about disallowance of depreciation on plant and machinery and building amounting to Rs.3.41 lakhs.It was brought to out notice,by the representatives of both the sides, that the issue stands covered by the earlier orders of the Tribunal(ITA/812/Ahd./2008(04-05)&1245/Ahd./2008(03-
04);ITA/836/Ahd/2008(04-05)&1181/Ahd/2008(03-04),dated-
25/5/2017). We are reproducing the relevant portion of the order and it reads as follow:
11. We have gone through the order of the Tribunal in assessee's own case as well as the order of the lower authorities for the year under consideration. In the A.Y. 2003-04, the CIT(A) has confirmed the addition on account of depreciation on plant and machinery, building, furniture and fixtures by holding the same to be related to the discontinuity of manufacturing operation of the assessee and also holding that the same have not been used during the year. We found that exactly the similar issue was considered by the Tribunal in assessee's own case for the A.Y. 2002- 03 vide order dated 23/11/2007 also in the A.Y.2007-08 vide order dated 30/03/2012 and for A.Y. 2009-10 vide order dated 31/12/2015.
12. Learned DR fairly conceded that issue is covered in favour of the assessee by the order of the Tribunal in assessee's own case.
We also found that assessee was engaged in the business of manufacturing and trading. However, the manufacturing processes were discontinued with effect from 25 January 2002. During the year under consideration, the assessee had claimed depreciation on plant and machinery, building, furniture and fixtures and office equipment. Once the concept of block of assets was brought into effect from AY 1989-90 onwards, then depreciation is allowable on the aggregate of WDV of all the Page 3 of 5 APRIL 15, 2026 Aswale ::: Uploaded on - 16/04/2026 ::: Downloaded on - 16/04/2026 20:38:34 :::
18.itxa.53.20.doc assets in the block at beginning of the Financial year alongwith the additions made to the assets in the subject AY. The individual asset losses its identity for depreciation. From the record, we also found that in AY 2007-08, the Hon'ble CIT(A) has allowed the assessee's ground by placing reliance on the decisions in case of CIT v Oswal Agro Mills (197 Taxman 25) (HC), Swati Synthetics Ltd vITA (38 SOT 208) (Mumbai ITAT) and Allied Photographics (8 SOT 318) (Mumbai ITAT). The Department has filed an appeal before the Hon'ble ITAT for AY 2007-08. However, the aforementioned issue was not taken in appeal by the Department before ITAT. We also found that Department accepted CIT(A) order for AY 2002-03. The CIT(A) has accepted the principle that with the introduction of concept of WDV of block of assets, the depreciation is allowable not on individual items but depending upon date of acquisition and put to use of the asset. Further, CIT(A) was in agreement with assesse's view that section 38(2) deals with usage of assets for non-business purposes and does not refer to assets partly used during the year for business purposes. Accordingly, CIT(A) has allowed the depreciation claimed on plant and machinery during AY 2002-
03. The department has filed an appeal before the Hon'ble ITAT for AY 2007-08. However, the aforementioned issue was not taken in appeal by the Department before ITAT. In view of the above, based on a combined reading of all of the above, it is abundantly clear that depreciation is 1,22,84,477 and the disallowance made by the AO was not justified. Thus, there is no merit for disallowance so made. Respectfully, following the order of the Tribunal in assessee's own case, we delete the disallowance of depreciation so made by the AO.
Respectfully, following the above order, we allow ground no. 17".
5. As can be seen from this reproduction, on the issue of depreciation, for earlier years, the Assessing Officer had denied the depreciation to the Assessee and which was overturned by the Appellate Authorities. That was never challenged and accepted by the Department. It is only in this year that the Department has decided to challenge the denial of Page 4 of 5 APRIL 15, 2026 Aswale ::: Uploaded on - 16/04/2026 ::: Downloaded on - 16/04/2026 20:38:34 :::
18.itxa.53.20.doc depreciation before this Court without any change in circumstances. We, accordingly, find that Question (B) does not give rise to any substantial question of law requiring an answer by this Court.
6. In view of the foregoing discussion, this Appeal is admitted only on Questions (A) and (C) reproduced above. Respondent waives service.
7. The Registry is directed to communicate a copy of this order to the Tribunal. This would enable the Tribunal to keep papers and proceedings relating to the present Appeal available, to be produced when sought for by the Court.
8. The present Appeal is to be heard along with Income Tax Appeal No.712 of 2017 and Income Tax Appeal No.713 of 2017.
9. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.] Page 5 of 5 APRIL 15, 2026 Aswale ::: Uploaded on - 16/04/2026 ::: Downloaded on - 16/04/2026 20:38:34 :::