TaxTMI 
TaxTMI 
2018 (3) TMI 790
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....New Delhi, has failed to appreciate the fact that the condition precedent for invoking the jurisdiction under section 147 is conspicuously absent and the assumption of jurisdiction is devoid of any legal sanctity. 3. That, the reliance placed on the decisions of Delhi High Court is misplaced and has no applicability to the facts and circumstances of the case. The interpretation placed by Supreme Court on section 147 has not at all adverted to which squarely cover the case of the appellant. 4.That, the reason recorded by the Dy.CIT was vague, whimsical, erroneous and based upon doubts and suspicion. The proceedings initiated are arbitrary, capricious and unwarranted in the eyes of law. WITHOUT PREJUDICE TO ABOVE 5.a) That , the learned CIT (A) XVI, has gone wrong in sustaining the addition of Rs. 14,87,323/- under the head "Legal & Professional Expenses" treating the same to be of capital in natures. b) That, the entire expenditure has been incurred wholly and exclusively for the purpose of business and same qualify for deductions under section 37(1) of the I.T. Act. 6.a) That, the learned CIT (A) XVI, has further gone wrong in s....
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.... of deduction under the head "Sales Promotion" d) That, the principle of res-judicata is applicable to the facts of the present case and learned CIT (A) should have followed the order of the preceding years passed by predecessor on the said issue. 2.That, the learned CIT(A) has gone wrong in sustaining the impugned action of ACIT in restricting depreciation on UPS, Rack and Battery @ 15% as against the claim of 60% by the Appellant. 3. That, the order of the CIT(A)XVI is bad in law and against the facts of the case. 4. That, the appellant Crave leave for the amendment and also to raise additional grounds of appeal on or before the date of hearing. ITA No. 4530/Del/2013 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition made by the A.O. under section 2(24)(x) of the Income Tax Act 1961 amounting to Rs. 29,44,538/-; 2. The Ld.CIT (A) has erred in law and on facts in deleting the addition made by the assessing officer amounting to Rs. 21,64,588/- being excess provision made under the head of 'Fringe Benefit Tax' without appreciating the fact that as per report of Statutory Auditor the said amount was p....
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....sment. 2.2. Ld. AO rejected the submissions advanced by assessee vide order dated 28/01/13 wherein it is held that assessee's case falls within the purview of Explanation 2 to Section 147, wherein the Act stipulates circumstances in which income chargeable to tax shall be deemed to have escaped assessment. The Ld. AO was of the opinion that sub clause (c) to Explanation 2 to include cases, wherein income chargeable to tax has been under assessed or assessed at too low rate or cases in which income has been made the subject of excessive relief under the Act where excessive loss or depreciation allowance or any other elements under the Act have been computed. Ld. AO placed reliance upon the decision of Hon'ble Supreme Court in the case of Calcutta Discount Company Ltd vs. ITO reported in (1961) 41 ITR 191 wherein Hon'ble court had held that: "While it was the duty of the assessee to disclose all facts which had a bearing on the question, what inference should be drawn from the facts so disclosed was a matter to be examined by the Income Tax Officer. The Court further held that the Income Tax Officer could issue a notice for reopening the assessment if he had reasons to be....
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.... is trying capriciously to reopen concluded assessment, as the reasons recorded are vague, whimsical and not specific. Ld.Counsel submitted that the amount of Rs. 1,21,14,765/-mentioned in the reasons recorded represents deferred revenue expenditure for the preceding assessment year i.e. 2005-06 and 2006-07, the benefit of which has already been taken in the preceding years. He further submitted that the sum of Rs. 1,21,14,765/-is not the component of Rs. 1,83,96,739/-which actually is the deferred revenue expenditure for assessment year under consideration. Ld.Counsel submitted that the said deferred revenue expenses as per regular practice is being deferred that accrues in the future years and is not charged to profit and loss account but is taken to the balance sheet under the head miscellaneous expenses. 3.1. Further the Ld.Counsel submitted that as the nature of expenses being revenue in nature, it is claimed in the year in which it was incurred and the same has been claimed as deduction in the computation of income for the year under consideration, and the deferred revenue expenditure for preceding assessment year amounting to Rs. 1,21,14,765/-was charged to profit and los....
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....er has not considered the material and subsequently came by the material would form a reason to believe that income has escaped assessment which would fall within the scope of section 147 of the act. It was therefore Ld. AO in the reasons recorded has observed that assessee in computation of income had added back deferred revenue expenditure amounting to Rs. 1,21,14,765/-and reduced deferred revenue expenditure of Rs. 1,83,96,738/- thereby an understatement of loss of Rs. 62,81,974/-which is the difference between the two has occurred. Since this issue had not been addressed by assessing officer while passing the original assessment Ld. DR emphasised that the reopening of assessment to verify this fact was rightly initiated. 3.3. We have perused the submissions advanced by both the sides in the light of the records placed before us. 3.4. Admittedly assessing officer has not raised any query regarding the deferred revenue expenditure in the questionnaire issued along with notice u/s 143 (1) of the Act during the original assessment proceedings. Thus in our opinion there is no view formed by assessing officer on this issue at the time of original assessment. Further from the st....
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....g the same as capital in nature. 4.1. On perusal of the records placed before us it is observed that assessee incurred expenditure of Rs. 14,87,323/- for registration of product with the trademark authority. It is observed that assessee is engaged in the activity of manufacturing and marketing of pharmaceutical formulations. Ld. Counsel submitted that assessee is the owner of number of brands and also acquires other brands which it intends to launch in future. Thus it is incumbent upon assessee to register the trademarks so that no other company can infringe on the brand product of the assessee. Ld. Counsel has also submitted that the legal and professional expenses incurred towards registration of the trademarks are an allowable expenditure under section 32 (1) (ii) of the Act. 4.2. On the contrary Ld. DR placed reliance upon the orders of the authorities below. 4.3. We have perused the submissions advanced by both the sides and the light of the records placed before us. It is very much relevant for assessee in its type of business to register its brand with the Trademark Registry as there would be many other pharmaceutical companies coming out with a similar type of p....
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.... be revenue in nature. 7.1. Ld.CIT (A) had allowed expenditure under the head 'salary and wages' amounting to Rs. 46,80,847/-, travelling expenses amounting to Rs. 22,34,939/-, advertisement expenses at Rs. 19,94,690/-and printing and stationary at Rs. 59,02,063/- to be revenue in nature. 7.2. Ld. CIT (A) deleted the addition of Travel Expenses amounting to Rs. 22,34,939/-, as according to Ld. CIT (A) they were incurred on the product development team who has to travel all over India to visit doctors, conduct seminars and to impart marketing strategies, knowledge of products to its sales force who is instrumental in promoting the sales of the product. However, it is observed from the statement of accounts that in schedule 17 at page 121 of paper book assessee has claimed travelling expenses amounting to Rs. 50,996,740/-. Thus we do not find the reason, as to why assessee considered travel expenses amounting to Rs. 22,34,939/- under the head 'deferred revenue expenses' again. This amounts to double deduction claimed by assessee. 7.3. Therefore the disallowance of travel expenses stands upheld. 8. In respect of the expenses under the head Salary and Wages at Rs. 46,80,847....
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....ssessee. Ground No. 1, is regarding the disallowance of sales promotion expenses. We are of the considered opinion that this Tribunal vide consolidated order dated 25/08/17, passed for assessment year 2006-07 and 2007-08 has dealt with this issue extensively in paragraphs 13-22. This Tribunal has dismissed the claim of assessee. 10.1. Respectfully following the same, this ground raised by assessee stands dismissed. 10.2. Ground No. 2 is in respect of the depreciation claimed on computer peripherals such as UPS, battery etc. 10.3. In our considered opinion this issue now squarely stands covered in favour of assessee by order of jurisdictional High Court in the case of CIT vs. BSES Yamuna Powers Ltd in ITA No. 1267/2010 wherein it has been held that computer accessories and peripherals such as printers, scanners and servers etc. form an integral part of computer system and cannot be used without the computer, thus these are part of the computer system and eligible for depreciation at the rate of 60%. 10.4. Accordingly we allow this ground raised by assessee. 10.5. In the result the appeal filed by assessee stands partly allowed. 11. ITA No. 4530/Del/2013 (Revenue) ....