AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 920
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....aw and on facts in deleting the expenses related to web design charges, trade mark expenses and survey expenses ? E. Whether the Tribunal erred in law and on facts in deleting the disallowance of Rs. 36,60,981/made u/s 40(a)(ia) of the Act ?" 2.0. The facts leading to the present appeal in nutshell are as under: 2.1. That the assessee engaged in the business of manufacturing and sale of Neufraceuitcals and trading in low calorie and Cosmeceuticals products filed return of income for AY 200910 declaring total income at Rs. 38,53,16,250/. The case was selected for scrutiny. The assessee claimed the depreciation on noncompete fees; reduction of Rs. 5,18,761/from stock of packing material and Rs. 27,17,342/from stock of finished goods. The assessee also claimed the deduction towards foreign travel expenses. The assessee also claimed the deduction towards expenses related to web design charges, trade mark expenses and survey expenses. The assessee also claimed the deduction of expenditure of Rs. 36,60,981/under Section 40(a)(ia) of the Act incurred by the assessee company on account of gift article produced for sales promotion. That the AO framed the assessment under Section 143(3....
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....rds noncompete fees were not in the nature of intangible assets eligible for depreciation provided under Section 32 of the Act and therefore, made disallowance of Rs. 1,40,625/. The aforesaid came to be deleted by the learned CIT(A) placing reliance upon the decision of the Chennai Bench in the case of ITO vs. Medicorp Technologies Pvt. Ltd(122 TTJ 394) as well as decision of the Pune Bench in the case of Serum Institute of India Ltd (135 ITD 69(Pune). The learned CIT(A) also noted that the similar claim of the assessee was allowed in earlier assessment year i.e. AY 200708 and 200809. Thus, the revenue accepted the claim in the earlier two years. Therefore, the learned CIT(A) observed that in such situation and on the same non compete fees without there being any change in the facts, no disallowance of depreciation can be made in the year under consideration. The same has been confirmed by the learned Tribunal. Under the circumstances and considering the fact that the similar claim on non compete fees was allowed in the earlier years and same has been accepted by the Revenue in essence of any change in facts, the assessee is rightly held to be entitled to the depreciation on non co....
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....ted by the procedure followed by the appellant company and is, therefore, fully allowable. There is no .requirement of any technical or audit committee before the write off. Regarding the write off of Rs. 27,17,242/, the appellant has given a complete list of the items which were made for write off and it was mentioned that the list was for the provision of damaged goods and on that basis, the write off has actually been made and the goods have been reduced from the overall stock statement. The appellant has, therefore submitted that even if it was mentioned as provision, the stock was actually written off and, therefore, the claim should be allowed. After considering the various submissions and the evidences placed before me by the appellant, I am inclined to accept the submission made by the appellant. There is a proper procedure which has been followed by the appellant. The list of packaging material contains clear description .of the goods that were considered to be not usable. Similarly, the list for damaged stock clearly show the material, quantity and description of the various items which were lying at different godowns across the country which were considered to be dama....
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....e of Rs. 3,20,467/only was required to be allowed, more particularly, when the same was duly supported by documentary evidence. The aforesaid has been confirmed by the learned Tribunal. Considering the facts and circumstances of the case, we are of the opinion that the learned Tribunal as well as learned CIT(A) rightly deleted the disallowance of Rs. 3,20,467/claimed with respect to foreign travel. We are in complete agreement with the view taken by the learned Tribunal. 7.0. Now, so far as proposed question No. D is concerned, the same relates to the disallowance of Rs. 53,25,263/regarding web designing charges, trade mark expenses and survey expenses claimed by the assessee. The AO disallowed the said expenditure by treating the same as capital expenditure. On an appeal, learned CIT(A) relying upon the decision of the Delhi High Court in the case of CIT vs. Indian Visit Com Pvt Ltd (176 Taxman 164) held that in case of expenditure on website, there is no change in the fixed assets of the assessee and no asset has been created but it is a tool for facilitating the business of the assessee and therefore, held expenditure of website to be of revenue nature. 7.1. With respect to tr....
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....under: I have carefully perused the assessment order and the submissions given by the appellant. The A. O. has treated the expenditure on certain items of sales promotion expenses amounting to Rs. 36,60,981/as liable for deduction of TDS u/s. 194C of the Act holding it as work contract. The appellant has submitted that it was not a work contract. These expenses were related to purchase of promotional articles and sample expenses which cannot be termed as work contract. The appellant further mentioned the CBDT Circular No. 714 and has submitted that in view of the circular the provisions of section 194C are not attracted. After considering the material on record, it is noted that the appellant has purchased certain items such as danglers, wall mounted dispensers, printed leaflets, bags etc. with the logo of the company for sales promotion. The items were in the nature of ready goods and only logo of the company was printed on the items. These items appeared to be the items available in the market off the shelf. The appellant has only added its logo on those items to promote its business. It is nowhere indicated in the assessment order or the facts that the design and descriptio....