TaxTMI 
TaxTMI 
2017 (2) TMI 903
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....oda is bad in law and contrary to legal pronouncement. The Additions/Disallowances made by the AO are unjustified and unwarranted. It be held so now. ii. Your appellant submits that the provisions of section 147 r.w.s. 148 are not applicable in the case of your appellant since the reasons recorded for re-opening the assessment are debatable. It is further submitted that the re-opening based an audit objection is unjust and uncalled for and hence, the order passed by the AO be quashed. iii. The Hon'ble CIT(A)-III, Baroda has erred in confirming the addition made on account of non-granting the depreciation of Rs. 1,95,217/- as claimed by your appellant on goodwill. Your appellant submits that goodwill is an intangible asset and is eligible for depreciation as per provisions of section 32(1)(ii) of the Act. It is submitted that the AO be directed to allow the claim of depreciation on goodwill. iv. The Hon'ble CIT(A)-III, Baroda has erred in not deleting the addition made by AO of Rs. 2,09,268/-being notional interest calculated @ 12% on advances of Rs. 17.44 lacs made to a sister concern without appreciating the fact that such advances were made out of self-generated funds which....
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....notices and letters requesting to file revised return of income and made compliance to the same. In response to the notices assessee's representative appeared from time to time but did not file any document. Therefore, ex-parte assessment was made by the Ld. A.O. with the following addition depreciation on goodwill on perusal of working of statement of Depreciation, it was seen that the assessee has claimed depreciation of Rs. 1,95,217/- @ 25% on good will. Thereafter, assessee was asked by the notice that as to why the depreciation on goodwill should not be disallowed as the same is not allowable as per Income Tax Law. Whereas assessee claim the same is justified in view of the Section 32 of the Income-tax Act, 1961. "Asset means - 1. .................... 2. Intangible assets, being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature". 5. The Ld. Assessing Officer held that as per section 32(1) of the I.T. Act allows depreciation in respect of - 1. Buildings, Machinery, Plant or furniture being tangible assets: 2. Know-how, patents, copy rights, trade marks, licenses, franchises or any other busines....
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.... of deposits of Rs. 30,05,348/- has been wrongly shown as deposits received during the year and vice a versa (The correct amount of deposits made during the year is Rs. 24,14,410/-). In support of this mistake, we filed a copy of promoter A/c/Deposits A/c. 9. Coming back to the correct figure of addition of deposits of Rs. 2,69,056/- in Deposit account aggregating to Rs. 24,14,410/- made during the year by Suresh B sheth, the same includes interest credited during the year of Rs. 1,76,755/-. Thus, net increase in the deposits made during the year is Rs. 22,37,655/- . (Promoter's Account of Rs. 19,68,598 and Deposits Account of Rs. 2,69,057/-). 10. Regarding Deposit of Rs. 19,68,598/- made in Promoter Account, it was submitted that the same were deposited out of withdrawals made by Suresh B sheth from his Bank account with Co-operative Bank of Baroda. 11. Regarding addition of Rs. 2,69,057/- made in Deposit A/c, it was submitted that Rs. 2,60,000/- has been credited to Deposit Account by transfer of amount from VOPL. In support of this assessee filed a copy of Deposit A/c of Suresh B sheth alongwith copy of A/c with VOPL duly confirmed by the Company. 12. Ld. A.O. further treate....
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.... the expressions 'assets' and 'block of assets' shall mean - (a) Tangible assets, being buildings, machinery, plant or furniture; (b) Intangible assets, being know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature:" Explanation 3 states that the expression "asset" shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. A reading the words "any other business or commercial rights of similar nature" in clause (b) of Explanation 3 indicates that goodwill would fall under the expression "any other business or commercial right of a similar nature:. The principle of ejusdem generic would strictly apply while interpreting the said expression which finds place in Explanation 3(b). In the circumstances, we are of the view that "goodwill" is an asset under Explanation 3(b) to section 32(1) of the Act." 18. Appeal of the assessee was allowed by the Ld. ITAT. 19. So far as Ground No. 4 is concerned against the assessee as per the law and judgment and Ld. A.R. fairly conceded that this Ground may be decided....
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....d so now and addition made by the AO be deleted. Without prejudice to the above, your appellant submits that the rate of interest charged @ 12% PA is very harsh and same be considered @ bank rate of 9% received by your appellant on FD from Union Bank of India. v. The Hon'ble CIT(A)-II, Baroda has erred in confirming the disallowance of Rs. 6,162/- being previous year expenses without appreciating the fact that the same is allowable as per provisions of section 43B of the Act as claimed, The AO be directed to allow the same. vi. The Hon'ble CIT(A)-III, Baroda has erred in confirming the disallowance of Rs. 1,94,848/- out of Rs. 2,03,324/- on the ground that the supporting evidences for TDS deposits are not filed on record. Your appellant submits that the CIT(A)-III failed to appreciate other evidence filed on record for allowability of said expenses. 24. Ground No. 1 and 2 are not pressed by the Ld. A.R. so far as Ground No. 3 is concerned, this issue has been disallowed by the Hon'ble ITAT in favour of assessee in ITA No. 2087, 2296/Ahd/2012 for the Assessment Year 2003-04. Ground No. 4 is concerned, in this regard assessee has filed TDS statement for the A.Y. 2004-05 but ass....
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....is uncalled for the unjust. vi. The Hon'ble CIT(A)-III, Baroda has erred in confirming the disallowance of Rs. 9,85,074/- by invoking the provisions of section 40A(2)(b) without appreciating the facts submitted before the AO as well as before the Hon'ble CIT(A)-III, Baroda. Your appellant submits that job charge rates are similar as in the A.Y. 2006-07 and Hon'ble ITAT, Ahmedabad had decided the issue in assessee's favour in A.Y. 2006-07. It is therefore submitted that the addition made by AO is uncalled for and unjustified. 27. Ground No. 1, 2 & 3 are not pressed so far as Ground No.4 is concerned. Payment was made through General Entry and same is substantiated two documents report. Ground No.5 is not pressed because of smallness of amount. Ground No.6 is with regard to disallowance of Rs. 985044 by invoking provisions of Section 40(2)(b) regarding job charges. This issue has been decided by the Hon'ble ITAT in favour of the appellant in ITA No.1621/Ahd/2010 in A.Y. 2006-07 in Para 30 at Page Nos. 8 to 10 of the order. Ld. AR has enclosed a copy of the said order therefore respectively following the order of the Co-ordinate Bench, we allow this Ground in favour of the assesse....