2018 (3) TMI 2023

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....ring, the Ld.counsel for the assessee submitted that he is not pressing this ground of appeal. In view of this, this ground of appeal is dismissed as not pressed. 5. The next ground of appeal is with regard to disallowance of depreciation on non-compete fee. 6. Shri Tushar Jarwal, the Ld.counsel for the assessee, submitted that depreciation on non-compete fee of Rs. 83,05,664/- was allowed by this Tribunal in the assessee's own case for assessment year 2006-07 in I.T.A. No.561/Mds/2011. On a query from the Bench, when the first claim for depreciation was made? The Ld.counsel submitted that the assessee claimed depreciation from the assessment year 2001-02. According to the Ld. counsel, the Assessing Officer allowed the claim of the assessee right from the assessment year 2001-02. However, for the first time it was disallowed for assessment year 2007-08. The Ld.counsel submitted that the copies of the assessment orders from assessment years 2001-02 to 2006-07 are not readily available. According to the Ld. counsel, this Tribunal by placing reliance in the judgment of Madras High Court in M/s Pentasoft Technologies Ltd. in (2014) 41 taxmann.com 120, allowed depreciation on the ....

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....e opportunity to the assessee. 9. The next issue arises for consideration is disallowance of depreciation on goodwill. 10. Shri Tushar Jarwal, the Ld.counsel for the assessee, submitted that the depreciation was allowed by this Tribunal in the assessee's own case for assessment year 2006-07 in I.T.A. No.561/Mds/2011 dated 27.11.2017. According to the Ld. counsel, earlier, Delhi Bench of this Tribunal disallowed the claim of the assessee. However, the Delhi High Court reversed the order of this Tribunal and allowed depreciation. According to the Ld. counsel, the SLP filed by the Revenue before the Apex Court was dismissed. 11. We heard the Ld.counsel for the assessee and the Ld. Departmental Representative. The Ld. D.R. submitted that he is placing reliance on the observation made by the Assessing Officer as well as on the grounds of appeal. As rightly submitted by the Ld.counsel for the assessee, this Tribunal by placing reliance on the judgment of Delhi High Court in the assessee's own case for assessment year 2005-06, allowed depreciation on the goodwill. Since facts are identical, this Tribunal is of the considered opinion that the decision of co-ordinate Bench of thi....

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....here was no agreement for reimbursement of expenditure. According to the Ld. counsel, it is only a reimbursement, therefore, the CIT(Appeals) allowed the claim of the assessee. Hence, the Revenue is challenging the same in its appeal. 16. On the contrary, Shri S. Bharath, the Ld. Departmental Representative, submitted that Kema, Netherlands is performing no independent function. According to the Ld. representative, it is testing the transformers manufactured by the assessee. Referring to Section 9(1)(vii) of the Act, the Ld. D.R. submitted that the service rendered by the non-resident for testing the machinery manufactured by the assessee was utilised for doing business in India. Since the services rendered by the non-resident by testing the transformers manufactured by the assessee were used in the business carried on by the assessee in India and for the purpose of earning income in India, according to the Ld. D.R., the income earned by the non-resident by way of testing fee is taxable in India. Hence the provisions of Section 9(1)(vii) of the Act would come into operation. 17. We have considered the rival submissions on either side and perused the relevant material available on....

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....t was paid by the assessee is only reimbursement of expenditure, this Tribunal is of the considered opinion that the CIT(Appeals) is not justified in allowing the claim of the assessee only on the basis of oral submission made before him. If it is a real reimbursement, there should be a communication between the parties with regard to nature of expenditure and reimbursement. In the absence of any material, this Tribunal is of the considered opinion that the matter needs to be re-examined. Accordingly, orders of both the authorities below are set aside and the payment made to Areva T&D Finance, France is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and find out whether there is any obligation on the part of the assessee to reimburse the expenditure and also find out whether the expenditure was to be incurred by the assessee or by the France company and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee. 19. Now coming to payment made to Converteam, USA, the claim of the assessee before this Tribunal is that erection and commissioning charges are integral cost of ma....