TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1628
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....w and on facts in deleting the addition of Rs. 1,09,600/- made on account of treating the Trade Mark expenses as Capital expenses. 4) The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting the addition of Rs. 2, 23,307/- made out of sales promotion expenses made u7s.40(a)(ia) of the Act. 5) The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 1,05,468/- made on account of depreciation on non-compete fees. 6). The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in directing the Assessing Officer to allow the claim of the Assessee, amounting to Rs. 7,19,01,743/- on account of depreciation on Goodwill arising on Amalgamation, which was never claimed in the Return of Income filed by the Assessee. 7). On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad ought to have upheld the order of the Assessing Qfficer. 8). It is therefore, prayed that the order of the Ld. Commissioner of Income- Tax (Appeals)-XIV, Ahmedabad may be set-a-side.-and that of the order of the Assessin....
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.... to deduct TDS. Further we observe that similar issues have been decided in favour of assessee for Asst. Year 2009- 10 by the Tribunal in ITA No.1674/Ahd/2012 vide its order dated 6.4.2016. 9. Co-ordinate Bench vide order dated 6.4.2016 in assessee's own case for Asst. Year 2009-10 deleted the disallowance on foreign travel expenses by observing as under :- 15. We have heard the rival submissions and perused the material on record. We find that ld. CIT(A) while deleting the addition had given a finding that the assessee had furnished compete details of employees who had travelled abroad, duration of visit, countries visited, nature and amount of expenses and purpose of travel. He has also noted that the evidences placed on record include the correspondences made with the travel agents and the expenses were reasonable as compared to the total turnover of the company. Before us, Revenue has not brought any material on record to controvert the finding of ld. CIT(A). We, thus, find no reason to interfere with the order of ld. CIT(A). Thus, this ground of Revenue is dismissed. 10. We further find that the Co-ordinate Bench vide its order dated 6.4.2016 has deleted the disallowance on....
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....(A). Thus, this ground of Revenue is dismissed. 12. Respectfully following the decision of Co-ordinate Bench dt.6.4.2016 for Asst. Year 2009-10 in assessee's own case, we find that ground nos.1,3 & 4 raised by the Revenue are liable to be dismissed as they also relate to foreign travel expenses, trade mark expenses and disallowance u/s 40(a)(ia) of the Act for sales promotion expenses. Further Revenue is unable to rebut the contentions of ld. AR and to differentiate the facts of the year under appeal with those for Asst. Year 2009-10. Thus we find no reason to interfere with the order of ld. CIT(A) and dismiss these three grounds. 13. Ground no.5 reads as under :- 5). The Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance of Rs. 1,05,468/- made on account of depreciation on non-compete fees. 14. The Assessing Officer while framing the assessment denied the claim of depreciation of Rs. 1,05,468/- made by assessee on the w.d.v. of intangible asset of Rs. 4,21,875/-. Assessee carried the matter before ld. CIT(A). The same was decided in favour of assessee by following the decision of Co-ordinate Bench, Pune in the cas....
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.... Assessing Officer denied the claim of depreciation and added back to the income of assessee. Further we observe that ld. CIT(A) has allowed assessee's ground and deleted the disallowance of Rs. 1,05,468/- on account of noncompete fees by observing as under :- 6.3 Decision: I have carefully considered the facts of the case and the submissions made by made by AR of the appellant. I have carefully perused the assessment order and the submissions given by the appellant. The appellant has submitted that noncompete fee was capitalized as an intangible asset in F. Y. 2006-07 and the depreciation was allowed in three earlier assessment years i. e. A. Y. 2007-08, 2008-09 & 2009-10. Accordingly, the depreciation @ 25% was claimed in this year also. The appellant has also relied on the decision of Chennai Bench in the case of ITO Vs. Medicorp Technologies Pvt. Ltd. [122 TTJ 394 (Che.)] wherein it was held that non-compete fee wps an intangible asset and was covered by the provision of section 32 (1)(ii) of the Act. It has further relied on the recent decision of Serum Institute of India Ltd. [135 ITD 69(Pune)] dated 18/01/2012 wherein non-compete fee was held to be an intangible asset and....
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....ely covered by the decision of the Chennai Bench of the ITAT in the case of Asstt. CITv. Real Image Tech (P.) Ltd. [2009] 177 Taxman 80 (Mag.) [Para 13] From the decision of the Tribunal in Real Image Tech. (P.) Ltd. (supra), it is vivid that the, by payment of non-compete fee to another person to reduce the business or commercial competition for a period, the assessee acquires a right and it is a capital asset, which is a business or a commercial right. Such rights are intangible ones and they are covered by the provisions of clause (ii) of section 32(1). [Para 14] In such circumstances, the assessee must win on this issue in view of the cited ratio in the case of Real Image Tech. (P.) Ltd. (supra). Further, it is a settled issue that the non-compete fee is intangible and depreciable asset.(para 15) 21. We further observe that the Co-ordinate Bench Pune in the case of Serum Institute of India Ltd. (supra) has also held that noncompete right acquired by assessee company is eligible for depreciation, by observing as follows :- The words 'being intangible assets' appear in clause (ii) of section 32(1) by way of a nomenclature, to contradistinguish the items appearing in cl....
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.... amount of Rs. 11,236/- has been crystallized during the financial year under consideration i.e. 2009-10 the claim should be allowed; whereas ld. Assessing Officer disallowed treating it as prior period expenditure. 25. We have heard both the ld. representatives and gone through the material records placed before us. We observe that ld. CIT(A) has deleted this disallowance of Rs. 11,236/- relating to prior period expenditure by observing as follows :- 3.3 Decision: I have carefully considered the facts of the case and the submissions made by AR of the appellant. The fact remains that the genuineness of expenditure has not been disputed. It is concluded by the AO that the expenditure should have been claimed in A. Y, 2009-10. However, as per facts there is no postponement of liability by the appellant. Having not claimed expenditure in A. Y. 2009-10, the appellant has paid more income tax in A. Y. 2009-10. In view of ratio laid down by Hon' ble Bombay High Court decision in the case of CIT vs. Nagri Mills reported in 33 ITR 681 (Bom), the disallowance made by the AO is directed to be deleted and the ground of appeal is accordingly allowed. 26. We further observe that there ....
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....eciation on goodwill has recently been settled with the judgment by Supreme Court. In the case of CIT vs.Smifs Securities Ltd. reported at 348 ITR 302 (SC) while allowing the claim of depreciation on goodwill it was held as under: "Section 32 of the Income-tax Act, 1961 - Depreciation -Allowance/Rate of - Assessment year 2003-04 - Whether 'goodwill' is an asset under Explanation 3(b) to section 32(1) -Held, yes - During relevant assessment year, one Y Ltd. amalgamated with assessee-company - According to assesses, excess consideration paid by it over value of net assets acquired of 'Y' ltd. amounted to goodwill on which depreciation was to be allowed - Authorities below recorded a finding that assets and liabilities of 'Y' Ltd. were transferred to assessee for a consideration; that difference between cost of an asset and amount paid constituted goodwill and that assessee-company in process of amalgamation had acquired a capital right in form of goodwill because of which market worth of assessee-company stood increased - Accordingly, assessee's claim was allowed - Whether since revenue could not rebut factual findings recorded by authorities below, impu....
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....ood-will ' of Rs. 7,19,01,743/- which was made during the course of assessment proceedings by way of filing revised computation of income and ignoring the fact that revised return of income was not filed. 34. We observe that pursuant to the scheme of arrangement approved by Hon. Gujarat High Court in Asst. Year 2008-09 i.e. Zydus Wellness Ltd. acquired the Consumer Products Division of Cadila Healthcare Ltd. including the Brands 'Sugar-free' and 'Ever Youth' and related intangible assets of the said business, which came to be accounted for as "Goodwill" in the books of accounts of Zydus Wellness Ltd. The value of the said Goodwill, acquired at Rs. 28.76 crores, stood duly reflected in the Annual Accounts of the Company for F.Y.2008-09 as the excess of the agreegate face value of the Equity Shares issued over the excess of the Assets and Liabilities. At the time of filing of return income in Asst. Year 2010-11 the issue of claiming of depreciation on goodwill was debatable and uncertain. It was only after the judgment of Hon. Supreme Court in the case of CIT vs. Smiffs Securities Ltd. (supra) wherein Hon. Court had an occasion to deal wih the issue of claiming depreciation on goodw....
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....Bengal Raw Jute Taxation Act, 1941, as it entertained a belief that it was not liable to pay purchase tax under that Act. Subsequently, the appellant was assessed to purchase tax and the order of assessment was received by it on 23rd November, 1973. The appellant challenged the same and obtained a stay order. The appellant also filed an appeal from the assessment order under the Income Tax Act. It was only during the hearing of the appeal that the assessee claimed an additional deduction in respect of its liability to purchase tax. The Appellate Assistant Commissioner (AAC) permitted it to raise the claim and allowed the deduction. The Tribunal held that the AAC had no jurisdiction to entertain the additional ground or to grant relief on a ground which had not been raised before the Income Tax Officer. The Tribunal also refused the appellant's application for making a reference to the High Court. The High Court upheld the decision of the Tribunal and refused to call for a statement of case. It is in these circumstances that the appellant filed the appeal before the Supreme Court. The Supreme Court held as under:- "5. In CITv. Kanpur Coal Syndicate, a three Judge bench of t....
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....es have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. [Para 11] Further the observation of the Supreme Court in the case of Jute Corpn. of India Ltd. (supra) to the effect 'if the ground so raised could not have been raised at that particular stage when the return was filed or when the : assessment order was made....' or 'that the ground became available on account of change of circumstances or law,' does not curtail the ambit of the jurisdiction of the appellate authorities stipulated earlier. They do not restrict the new/additional grounds that may be taken by the assessee before the appellate authorities to those that were not available when the return was filed or even when the assessment order was made. The appellate authorities, therefore, have jurisdiction to deal not merely with additional grounds, which became availabl....