TaxTMI 
TaxTMI 
2022 (7) TMI 587
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.... facts and circumstances of the case, Adler Mediequip Private Limited (hereinafter referred to as 'the Assessee' or 'AMPL') respectfully craves leave to prefer an appeal against the final order dated 04 January 2022 (received on 04 January 2022) passed by the National Faceless Assessment Centre, Delhi (hereinafter referred to as the 'AO') under section 143(3) read with section 144C(13) read with section 144B of the Income-tax Act, 1961 ('the Act') in pursuance of the directions issued by Dispute Resolution Panel-3 (DRP), Mumbai dated 23 December 2021 under section 144C(5) of the Act on the following grounds: General 1. On the facts and in the circumstances of the case and in law, the AO, based on directions of DRP, has....
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....ng interest under section 234D of the Act. Initiation of penalty proceedings 8. On the facts and in the circumstances of the case and in law, the AO has erred in initiating penalty under Section 271(1)(c) of the Act in respect of disallowances / additions. The above grounds of appeal are mutually exclusive and without prejudice to one another. The Assessee craves leave to add/ alter/ amend/ delete/ withdraw any or all of the grounds at or before the hearing of the appeal so as to enable the Income tax Appellate Tribunal to decide the appeal according to law." 3. Briefly, the facts of the case are as under :- The appellant is a company incorporated under the provisions of the Companies Act, 1956. The return o....
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.... of the same is made as revenue expenditure while computing the income under the head "business" in the return of income. It is worth mentioning here that the appellant had acquired business of Shri Ajay Pitre in terms of share purchase agreement dated 09.04.2013. The Assessing Officer was of the opinion that the said expenditure cannot be allowed as revenue expenditure for the reason that it is a capital in nature as the expenditure was incurred only towards smoothening the process of acquisition of the ongoing business/unit of Shri Ajay Pitre including the intellectual rights and not of revenue nature in view of the fact that the said case is clearly is on capital account not of revenue nature. The ratio of the Hon'ble Delhi High Court in....
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....cquisition of shares from erstwhile shareholders, therefore, it is part and parcel of the consideration paid for the acquisition of shares which is capital in nature. Accordingly, the ld. DRP confirmed the findings of the Assessing Officer. 9. On receipt of the direction from the ld. DRP, the Assessing Officer had passed the final assessment order dated 04.01.2022 passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Act after making the addition on account of disallowance of non-compete fee of Rs.8,26,31,590/-. 10. Being aggrieved by the above final assessment order, the assessee is in appeal before us in the present appeal. 11. The ld. AR submitted that non-compete fee paid to Shri Ajay Pitre in terms of the consultancy agreement ....
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....ellant company establishing the nature of services of consultancy services by Shri Ajay Pitre to the appellant company. Therefore, the sum and substance of transactions is that it should be treated as part and parcel of purchase of shares of the appellant company and the same cannot be allowed as revenue expenditure. 13. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the allowability of non-compete fee paid in the year 2013-14 in terms of the consultancy agreement entered by the appellant company on 29.10.2013 with Shri Ajay Pitre. In terms of the said agreement, the appellant company had agreed to pay consultancy fee of Rs.21.55 crores in 3 equal instalments. The said consid....