TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 1059
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....reason that she happens to be grand-daughter of the Managing Director of the assessee-company. He submitted that the expenditure was incurred towards reimbursement of expenditure incurred by her for her education. He referred to the Memorandum of Understanding dated 9.8.2003 between the trainee, Payal N. Parikh and the assessee-company, wherein she has given an undertaking to the company that after obtaining the qualification on being sponsored by the company, she will be in employment of the company for a period of two years after completing M.B.A. course on the remuneration to be fixed hereinafter and will not leave the said job without prior permission of the company and without discharging all the obligation. He submitted that the issue is covered in favour of the assessee with the decision of Hon'ble Karnataka High Court in Ras Information Technologies P. Ltd., 238 CTR 76, ITAT, Ahmedabad's decisions in the case of Mazda Ltd., ITA No.3190/Ahd/2008, and in the case of Gujarat Carbon Industries Ltd. ITA No.3231/Ahd/2010. The learned counsel for the assessee submitted that trainee not only has given an undertaking, but also have complied with the same by doing job after completio....
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....d opinion, the MOU entered into by the trainee with the assessee-company is merely a self-serving document. There is no evidence brought on record on behalf of the assessee to show that her selection for higher education was on merits and not due to the fact that she was closely related to the Managing Director of the assessee-company. There is no scheme laid down by the assessee-company to send employees abroad for training and employment thereafter with the assessee-company. In these facts of the case, we have no hesitation in holding that the expenditure claimed by the assessee on higher education of the grand-daughter of the Managing Director of the assessee was not wholly and exclusively for the purpose of business of the assessee, and accordingly, we confirm the order of the CIT(A) on this issue and the ground no.1 of the assessee is dismissed. 6. The ground no.2 and 3 of the assessee are as under: "2. The ld.CIT(A) has erred in law and on facts in confirming the action of AO in disallowing depreciation on intangible assets amounting to Rs. 10,54,688/- 3. The ld.CIT(A) has erred in law and on facts in not granting depreciation on all the intangible assets by treating the s....
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....ne) and KEC International Ltd. Vs. ACIT, (2010) 41 SOT 43 (Mum.) 9. We have considered rival submissions and perused the orders of the AO and the CIT(A), and also various case laws relied on by the parties. We find that the issue of allowance of depreciation on intangible asset in the form of "goodwill" is covered in favour of the assessee with the various decisions including that of the Hon'ble Apex Court in Commissioner of Income-tax v. Smifs Securities Ltd. (supra), and the decision of ITAT, Ahmedabad in DCIT Vs. Talent India (supra). We have gone through the Memorandum of Transfer of Business, a copy of which has been filed in the compilation before us, which is dated 1.4.2001 wherein it is specifically provided that all the trade names, trade-marks, permits and licenses, goodwill and knowhow attached to the business carried on in India or elsewhere were transferred to the assignees i.e. the assessee-company. It is now well settled that the goodwill is an intangible asset entitled to depreciation. The quantification of goodwill at Rs. 75 lakhs in this case seems to be reasonable. The assessee has filed a copy of working of the valuation of the goodwill as given by M/s.Anmol Se....
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....sion while disposing of the ground no.2 and 3 in the assessee's appeal for A.Y.2004-05 in the foregoing paras of this order, we allow the ground no.2 of the assessee. ITA No.872/Ahd/2010 - A.Y.2005-2006 (Assessee's Appeal) 19. The ground no.1 of the assessee is as under: "1. Invalid & Bad order: The CIT(A) erred in not dealing with the grounds raised before him regarding invalid & bad order. The order passed by CIT(A) is not dealing with all the objections makes the order in valid and bad in law." 20. The learned counsel for the assessee has not pressed this ground of the appeal of the assessee, which is accordingly dismissed. 21. The ground no.2 of the appeal of the assessee is as under: "II. Disallowance of depreciation on goodwill Rs. 7,06,640/-" 22. Both the parties before us submitted that the issue of depreciation on goodwill in this appeal is identical with the issue in the ground no.2 & 3 of the appeal of the assessee for A.Y.2004-05. We have considered rival submissions. In view of our decision while disposing of the ground no.2 and 3 in the assessee's appeal for A.Y.2004-05 in the foregoing paras of this order, we allow the ground no.2 of the assessee. ITA No.87....
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....ctive is unjustified & bad on facts & law." 30. Both the parties before us submitted that the issue of depreciation on goodwill in this appeal is identical with the issue in the ground no.2 & 3 of the appeal of the assessee for A.Y.2004-05. We have considered rival submissions. In view of our decision while disposing of the ground no.2 and 3 in the assessee's appeal for A.Y.2004-05 in the foregoing paras of this order, we allow the ground no.2 of the assessee. ITA No.1600/Ahd/2010 - A.Y.2006-2007 (Revenue's appeal) 31. The ground no.1 of the Revenue's appeal is as under: "1. The ld.CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 9,05,000/- made by the AO on account of commission." 32. The learned DR referred to para 12 onwards of the assessment order and submitted that the assessee could not produce the payees of the commission payment before the AO inspite of amble opportunity provided to the assessee. He submitted that PANs of the payees of the commission payments are also not matching, and there are discrepancies therein. He submitted that onus was on the assessee to prove that the payments were made wholly and exclusively for the purpose of busines....
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....f the appeal of the assessee is as under: "1. The ld.CIT(A) has erred in law and on facts in deleting the penalty of Rs. 6,13,984/- levied u/s.271(1)(c) of the Act." 36. The learned DR submitted that the penalty under section 271(1)(c) of the Act was imposed on the assessee on two counts i.e. disallowance of education expenses of grand-daughter of the MD of the assessee-company and second depreciation on goodwill. 37. We have heard both the parties. We find that as regarding first issue of validity of penalty imposed for disallowance of expenses incurred for higher education of grand-daughter of the MD of the assessee-company, we find that the assessee has made full disclosure all the material facts in its account statement, and also in the audited report of its accounts for the relevant period. There could always be an honest difference of opinion between the assessee and the Revenue regarding allowability or otherwise of a particular expenditure incurred by the assessee. The fact that the assessee has incurred expenditure on higher education of the trainee and all these facts were disclosed in the account statements of the assessee is not in dispute. In these facts, we hold th....