TaxTMI 
TaxTMI 
2022 (8) TMI 83
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....l be looked into, only for the purpose of claiming weighted deduction. 3) The learned Commissioner (Appeals) erred in treating the one time premium paid for leasehold rights as a non - depreciable asset. 4) The Learned Commissioner (Appeals) erred in disallowing the depreciation claimed on Lease Hold Rights amounting to Rs.77, 85,255 on the ground that Lease Hold Premium paid cannot be treated as an Intangible Asset 5) The Learned Assessing officer erred in not considering the case laws relied upon by the assessee. 2.1 Grounds of appeal No. 1 & 5 being general in nature are dismissed. So far as, the ground No.2 is concerned, the same relates to the order of the ld.CIT(A) in upholding the disallowances of Rs.12,69,409/- by the AO. 3. Facts of the case, in brief, are that the assessee is a company and engaged in the business of manufacture and export of performance and specialty chemicals and filed its return of income 29.09.2015 declaring total income of Rs.23,82,550/-. During the course of assessment proceedings, the AO observed from the statement of computation of income filed by the assessee that the assessee has claimed Weighted Deduction of Rs. ....
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....ellant and the Profit and Loss account. The assessee company debited 1,42,74,409/- under the head Research and Development Charges as a part of manufacturing expenses. The assessee company had also claimed weighted deduction u/s 35(2AB) with respect of such revenue expenditure in addition to capital expenditure. However, the designated authority in Form 3CL allowed the revenue expenditure to the extent of 130.05Iakhs. But. with respect to revenue expenditure of Rs.12,69,409/-, which is not a part of 3CL statement, I hold that assessee is also not eligible for deduction u/s. 37. One of the essential requirements which must be satisfied before any deduction can be allowed under section 37 is that the expenditure must be expended or laid out wholly and exclusively for the purpose of the business. The words 'wholly and exclusively' both refer to the expenses incurred by the assessee for the purpose of his business. While determining as to whether the deduction claimed has been wholly and exclusively spent on such business, it is permissible to find out whether the amount has really gone for the purpose of business or not [CIT vs. S. Krishna Rao (1970) 76 ITR 664 (AP), ....
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....aimed excess R&D expenditure of Rs. 25,40,763/- and accordingly disallowed the amount of Rs. 12,69,409/- being 50% of Rs.25,40,763/-. We find the ld.CIT(A) has given a finding that similar issue has been decided against the assessee. However, nothing was brought to our notice about the final outcome of the same. We therefore deem it proper to restore the issue to the file of the AO with the direction to verify the record and decide the issue afresh and as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground of appeal No.2 is accordingly allowed for statistical purposes. 10. Grounds of appeal No 3 & 4 relate to the order of the ld.CIT(A) in confirming the disallowances of depreciation on lease hold rights amounting to Rs. 77,85,255/-. 11. Facts of the case, in brief, are that the AO during the course of assessment proceedings noted that the assessee has claimed an amount of Rs. 77,85,255/- as depreciation on lease hold rights i.e @ 25% of Rs.3,11,41,018/-. Since according to the AO the premium paid by the assessee to acquire the lease hold rights should be amortized over a period of 33 years and depreciation o....
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.... copy of the order of the Tribunal in assessee's own case vide ITA No.2182/Hyd/2017 order dated 17.08.2021 for AY 2014-15 wherein identical issue has been decided in favour of the assessee. He accordingly submitted that this being a covered matter the grounds raised by the assessee should be allowed. 15. Th ld. DR on the other hand strongly relied on the order of the ld.CIT(A) and also relied on the various decisions. 16. We have considered the rival arguments made by both the sides and perused the record. We find the issue stands decided in faovur of the assessee by the decision of the Tribunal in assessee's own case in the immediately preceding assessment year, where the Tribunal has thoroughly discussed the issue by observing as under:- 5. The Revenue's vehement contention in support of the impugned disallowance is that the assessee ought to have amortized the same u/s.35 of the Act. We find no merit in the instant contention per se in view of the fact that neither there is any specific provision in the Act nor is any CBDT circular to this effect. Hon'ble apex court's recent decision in Taparia Tools Ltd. Vs. JCIT (2015) [372 ITR 605] (SC) rather holds that th....