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2013 (8) TMI 589 - AT - Income TaxDisallowance of fee paid to the Registrar of Companies - Amortization u/s. 35D - CIT upheld disallowance - Held that:- Fee paid to the Registrar for expansion of the capital base of the company - directly related to the capital expenditure incurred by the company - Amount paid to the Registrar of Companies, as filing fee for enhancement of capital was not revenue expenditure - Following decision of Punjab State Industrial Development Corporation Limited Versus Commissioner of Income-Tax [1996 (12) TMI 6 - SUPREME Court] - Decided against Assessee. Depreciation of goodwill - CIT disallowed goodwill - Held that:- figure of the goodwill in the assessee's case has arisen when the existing running unit was transferred by Minda Industries Ltd. to the assessee newly firm company i.e. the assessee for a consolidated consideration of Rs. 2.75 crores and the difference between the net value of assets, which assets were recorded at book value, was recognized as 'goodwill' in the books of accounts - transaction took place in the preceding assessment years and the figure of goodwill is coming from the previous balance sheet - Addition of the words “business or commercial rights of similar nature” after the specified intangible assets clearly demonstrates intention of Legislature to provide depreciation to other categories of intangible assets which are not exhaustively enumerated. It is observed that in case of the assessee, intangible assets being Business claims; business information; business records; contracts; skilled employees; knowhow were invaluable and resulted in carrying on the transmission and distribution business by the assessee, without any interruption - Therefore, specified intangible assets acquired under slump sale agreement were in the nature of “business or commercial rights of similar nature” specified in Section 32(1)(ii) and were accordingly eligible for depreciation. It is not necessary to decide the alternative submission made on behalf of the assessee that goodwill per se is eligible for depreciation u/s 32(1)(ii) – Following decision of AREVA T & D INDIA LTD. Versus THE DEPUTY COMMISSIONER OF INCOME-TAX [2012 (4) TMI 79 - DELHI HIGH COURT] - Decided in favor of assessee. Disallowance u/s 40A(2)(b) - Payment made to sister concern - Held that:- assessee has not supported the expenditure in this regard with proper details and supporting. Assessee has merely stated that certain list of services were being rendered for which payment is made @ 2% of the sales of the assessee company - assessee has not given any submission in this regard that the expenditure incurred by the assessee were commensurate with the market rates - matter in this regard needs to be remitted back to the file of the Assessing Officer - Decided against assessee.
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