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2015 (1) TMI 1017 - AT - Income TaxDepreciation on goodwill - “bundle of business and commercial rights" - slump sale - Held that:- We agree with the submissions of the ld. Counsel of the assessee that the Hon’ble Delhi High Court’s decision in the case of Areva T & D India Ltd. vs. DCIT (2012 (4) TMI 79 - DELHI HIGH COURT) supports the case of the assessee wherein held that the specified intangible assets acquired under slump sale agreement were in the nature of 'business or commercial rights of similar nature' specified in section 32(l)(ii) and were accordingly eligible for depreciation under that section. Thus we are in agreement with the submissions of the ld. Counsel of the assessee that the goodwill that has been recognized in this case represents various assets in the nature of goodwill. - Decided in favour of assessee. Depreciation denied - vehicles which were admittedly used for the purpose of business and were owned by the appellant but however, these were not registered in the name of the appellant - Held that:- It is thus clear that the technicality of an asset being registered in the name of the asset can not come in the way of an assessee’s eligibility for depreciation as long as such an asset is de facto owned by the assessee and is used for the purposes of the business. In the present case, in the light of the business transfer agreement, there is no doubt that the asset was owned by the assessee. It is not even in dispute that the asset was used for the purposes of the business, nor has that been the case of the Assessing Officer. The conditions for eligibility to claim depreciation are thus satisfied on the facts of the present case. In view of these discussions, as also bearing in mind entirety of the case, we uphold the grievance of the assessee and direct the Assessing Officer to delete the impugned disallowance of ₹ 64,821. - Decided in favour of assessee. Disallowance of 50% of legal and professional fees - CIT(A) deleted addition - Held that:- In the present case, there is no dispute about the facts of service being rendered and there is no benchmark set for as to what would constitute a fair market value of the services in question. Unless there is a clear finding that the market value of the services taken from the sister-concern is less than the price at which the services are obtained, there cannot be an occasion to apply the disabling provisions of s. 40A(2). This exercise, therefore, necessitates a finding about the fair market value of such services. There is no such finding in the present case. In these circumstances as also bearing in mind entirety of the case, we are of the considered view that the disallowance made by the A.O. was devoid of legally sustainable basis. The learned CIT(A) was thus quite justified in deleting the same. - Decided against revenue. Disallowance of the foreign travelling expenses - CIT(A) delted the addition - Held that:- no reason to interfere in the matter, since, as rightly noted by the learned CIT(A), the impugned disallowance is indeed devoid of any legally sustainable basis. No disallowances can be made simply on the basis of assumptions, surmises and conjectures. We have noted that no specific requisitions were made by the A.O. for further information in respect of details of foreign travel expenses and yet the A.O. has disallowed the expenses for want of full and complete details. As regards the A.O.’s observation of earlier expenditure incurred on exploring new market, we are in complete agreement with the learned CIT(A) that there is no basis whatsoever to come to this conclusion and it is purely an inference drawn on the basis of assumption.- Decided against revenue.
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