TaxTMI 
TaxTMI 
2007 (3) TMI 745
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.... Enterprises Ltd. 2. Without prejudice to the above, the ld. CIT(A) erred in law and on facts in not giving finding on the appellant's alternative claim for depreciation u/s 32(1) on the said payment of Rs. 2 crores on being treated as capital expenditure. 3. That the ld. CIT(A) erred in law and on facts in confirming the disallowance of Rs. 59.85 lacs out of the appellant's claim for payment of Rs. 63.00 lacs representing front end fees on loan taken from the financial institution. 4. Without prejudice to the above, the ld. CIT(A) ought to have given clear direction for allowance of depreciation u/s 32(1) on the said payment of Rs. 59.85 lacs on being treated as capital expenditure." 2. The appellant company was incorporated....
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....ayment as a business revenue expenditure, ASE has also logically and rightly accounted the said fees for distribution of franchise of Rs. 2 crores as its revenue income in its profit and loss account. In view of the above, there is no justification for treating the said expenditure as capital expenditure." The AO held that the amount paid for acquisition of marketing rights is not justified and hence, not allowable as expenditure. The amount has been paid over and above sum of Rs. 20 crores paid for the acquisition of marketing rights. Learned CIT(A) held that there are no convincing arguments to allow the amount of Rs. 2 crores paid by the assessee to Ambalal Sarabhai Enterprises. 2.1 Learned counsel for assessee submitted that the amoun....
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....case of India Cements Ltd. vs. CIT, 60 ITR 552. The AO held that the loan was borrowed for the purpose of acquisition of intangible assets. They were not put to use, for which those front end fees was paid to financial institutions. He accordingly held that the amount is capital expenditure. The AO disallowed the claim of depreciation as no depreciation was allowed on the intangible capital asset of Rs. 104.94 crores was not allowed. The same was upheld by learned CIT(A). 4.1 Learned counsel for assessee submitted that in the appeal filed by revenue in ITA No.372/Del/2005 cited supra, the Tribunal has held that assessee is entitled to depreciation in respect of various intangible assets by way of patent, technical know how and marketing ri....