TaxTMI 
TaxTMI 
2017 (9) TMI 1350
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....the assessee and in directing the A.O. to delete the addition of Rs. 3,55,234/- made u/s 14A r.w.Rule 8D. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in treating UPS as computer peripherals and in directing the A.O. to allow depreciation @ 60% thereon. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that non compete right is an intangible capital asset for the purpose of section 32(1)(ii) of the Income Tax Act and in directing the A.O. to treat the same as intangible capital asset and to allow depreciation thereon." 2. Ground no.1 relate to deletion of addition of Rs. 3,55,234/- made u/s 14A r.w. Rule 8D. 2.1. After hearing rival submissions and go....
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....enditure which was relatable for the earning of the exempt income. It is also seen that the A.O. has applied Rule 8D r.w.s. 14A in the case of the appellant company without controverting the claim of the appellant company of not incurring any expenditure for the earning of exempt income. Therefore, in my humble opinion, the A.O. has erred in applying Rule 8D in the case of appellant company. Reliance in this regard is placed on the decision of Hon'ble ITAT, Delhi in the case of M/s Jindal Photo Ltd. vs. DCIT (2011- TIOL-653-ITAT-Del) wherein it was held that Rule 8D cannot be invoked in the case of an assessee without recording any satisfaction about the incorrectness of the claim of that assessee. On these facts and circumstances of the ca....
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.... as intangible capital assets. 4.1. The Ld.DR before us in this regard relied on the decision of Hon'ble Jurisdictional High Court in ITA no. 492/2012 in the case of Sharp Business System vs. CIT-III, in which the Hon'ble High Court vide order dt.05.11.2012 in respect of claim of depreciation, on the consideration paid towards right to compete, held as under. "12. It is, therefore, apparent that the ruling in Techno Shares & Stocks Ltd. (supra) was concerned with an extremely limited controversy, i.e. depreciability of stock exchange membership. This Court observes that such nature was held to be akin to a license because it enable the member, for the duration of the membership, to access the Stock Exchange. Undoubtedly, it conferred a b....
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.... of the Contract Act, which enjoins a contract in restraint of trade would otherwise be void. Another way of looking at the issue is whether such rights can be treated or transferred - a proposition fully supported by the controlling object clause, i.e. intangible asset. Every species of right spelt-out expressly by the Statute - i.e. of the intellectual property right and other advantages such as know-how, franchise, license etc. and even those considered by the Courts, such as goodwill can be said to be alienable. Such is not the case with an agreement not to compete which is purely personal. As a consequence, it is held that the contentions of the assessee are without merit; this question too is answered against the appellant and in favo....
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....er the non compete agreement were exclusively as is evident from the fact that not only the seller but also its affilaiates were debarred from carrying out the same business. 5. After hearing the rival submissions, we do agree that each decision has to be applied on the facts and context therein. In the case of the assessee, we noted that the terms and conditions of the agreement has not been examined by A.O. to the right perspective and has not been compared with the facts and circumstances in the case of Sharp Business Systems(supra). We, therefore, in the interest of justice set aside the order of Ld. CIT(A) and restore this issue to the file of the Assessing Officer with the direction that the Assessing Officer shall redecide this issu....