TMI Blog2019 (8) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... 37(1) - revenue OR capital expenditure - HELD THAT:- From the nature of expenditure incurred, we find that the expenditure is not incurred for the acquisition of know-how; it is incurred only for the purpose of valuation of the know-how. Admittedly, the expenditure in isolation has not created any asset nor has it added any value in the know-how of the assessee, benefit of which can be said to have accrued to the assessee over a longer period. Further, valuation of know-how was in the course of business of the assessee as know-how pertained to the business of the assessee. Further, assessee has placed before us the detailed valuation report obtained by him for valuation of know-how and the copies of invoices for professional fee paid for carrying out the valuation exercise. Thus, we find that the said expenditure is not in the nature of capital expenditure but is in the revenue field; and, thus is allowable u/s 37(1). The order of CIT(A) is accordingly set aside and the AO is directed to delete the addition made on account of professional fee paid for valuation of know-how. - Ground allowed - ITA Nos. 5525/MUM/2016 & 4665/MUM/2017 - - - Dated:- 26-7-2019 - Shri G.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es rendered by the recipient and how the same is related to the business of the assesse. In this regard, the assessee submitted the copy of confirmation, proposal given to M/s. M. N. Dastur Co. and copy of invoices. The Assessing Officer without commenting upon the documents produced by the assessee, simply stated that details submitted by the assessee was not acceptable and disallowed the expenditure of ₹ 7,50,000/- incurred by the assessee. The assessee moved an application under Section 154 of the Act vide letter dated 11.01.2012 requesting the Assessing Officer to treat the professional fees of ₹ 7,50,000/- as capital expenditure and allow depreciation on the same. The Assessing Officer vide an order dated 25.06.2012 rejected the assessee s request for rectification under Section 154 of the Act holding that the said request of the assessee cannot be treated as mistake apparent from records and, therefore, the same cannot be taken up in proceedings under Section 154 of the Act. Aggrieved by the order passed under Section 143(3) and Section 154 of the Act, the assessee preferred a single appeal before the CIT(A) against both the orders on 14.08.2012. In the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, assessee had preferred the appeal against the order under Section 154 of the Act well within the time and it is in the course of hearing before CIT(A) assessee was asked to file separate appeal against both the orders, which assessee had filed. As such, there was reasonable ground for delay in filing the appeal and, therefore, the same should be condoned. The CIT(A) has also recorded the fact that in the course of hearing it was pointed that two separate appeals were required against the orders of Assessing Officer and as such, explanation given by the assessee for condonation of delay is supported by the order of CIT(A). 5. On merits, the assessee submitted that copy of confirmation, proposal given to M/s. M. N. Dastur Co, copy of invoices and copy of valuation report for valuation of Know-how were submitted before the Assessing Officer. However, the Assessing Officer without assigning any reason and without finding any fault in the documents produced before him, disallowed the said expenditure stating that the same is not acceptable. It was submitted that the said expenditure was incurred in the course of business of the assessee and, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons furnished by the assessee/appellant, the delay of 878 days in filing of Cross Objections is condoned and the same is taken for adjudication on merits along with other appeals. (underlined for emphasis by us) 8. In the present case also, there was no negligence or inaction on the part of the assessee in filing the appeal. It was only the advice of the Chief Accountant based on which assessee acted upon. However, on being pointed out by the CIT(A) that two separate appeals need to be filed, the assessee without further delay filed the appeal against the order under Section 143(3) of the Act. The circumstances leading to delay in filing the appeal does not reveal that the act of the assessee is intentional or that there was some other motive behind in delay in filing the appeal. 9. Thus, following the ratio laid down by the Hon'ble Supreme Court in the case of Ram Nath Sao @ Ram NathSahu and Others (supra) followed by the Pune Bench of the Tribunal in the case of Atlas Copco (supra), we hereby condone the delay in filing of appeal by the assessee. 10. In Ground of appeal no. 3, assessee has challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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