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2020 (10) TMI 1009 - AT - Income TaxDisallowance of special adhesive stamps expenses affixed on conveyance deed for assignment of business - assessee had stated that the same was in connection with acquisition of business and was claimed as revenue expenditure - HELD THAT:- CIT(A)’s conclusion that the expenditure is to cure and complete the title to capital is without appreciating the facts of the case. This assignment is admittedly for facilitating the business of the assessee by assigning receivables and as the assessee has acquired the said industrial unit for a lump sum consideration. The expenditure is in connection with facilitating recovery of receivables which is a part of current asset. Hence the expenditure in this regard cannot be said to be in the capital filed of acquiring business. It is in fact for facilitating the business of the assessee and in this view of the matter expenditure is allowable as business expenditure. The case laws referred by assessee in the case of Bombay Dyeing Mfg. [1996 (2) TMI 8 - SUPREME COURT] and India Cements Ltd. [1965 (12) TMI 22 - SUPREME COURT] are accordingly germane and support the case of the assessee. Provision for warranty claimed as expenditure - claim denied by AO on the ground that it is an unascertained liability and a contingent liability - CIT(A) in principal upheld the action of the Assessing Officer but directed that only the provision made during the year should be disallowed - HELD THAT:- We find that the authorities below have erred in considering the provisions of warranty as contingent liability. As already submitted by learned Counsel of the assessee in assessee’s own case, subsequently revenue authorities have allowed the expenditure on the basis of Rotork Controls India P. Ltd. case [2009 (5) TMI 16 - SUPREME COURT]. Depreciation in respect of customer contracts - Assessee had claimed that the customer contracts are valuable right and therefore capital asset - HELD THAT:- In the case of Areva T&D India Ltd. Vs. CIT [2012 (4) TMI 79 - DELHI HIGH COURT] has held that excess amount paid over and above tangible asset for acquisition of various business and commercial rights and slump sale can be categorised under the goodwill and difference between purchase consideration and value of tangible asset taken over being the balancing figure was held to be goodwill and depreciation thereon was held to be allowable on the touchstone of decision of Techno Shares and Stocks Ltd [2010 (9) TMI 6 - SUPREME COURT]. The details of value of tangible assets taken over by the assessee by the slump sale agreement are necessary to be considered for adjudication of this issue. Hence, in our considered opinion the issue of depreciation of goodwill and customer contracts being an intangible asset claimed in this case by the assessee needs to be examined by the Assessing Officer on the touchstone of the aforesaid decision. Accordingly the issue of depreciation of customer contracts and goodwill is remitted to the file of the AO.
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