TMI Blog2021 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of hotel not found to be correct by both the CIT(A) and the Tribunal. It is not disputed that the intangible assets viz. permits, licenses and approvals fall within the meaning of intangible assets under Section 32. Addition u/s 40A(2) - disallowance of interest claim of 9% in respect of the fully convertible debentures - AO's opinion is based on the noting made by the auditors in the annual report of respondent that payment of interest at 24% on Fully Convertible Debentures (FCD s) was prejudicial to the interest of the company - ITAT deleted the addition - HELD THAT:- As provided under Section 40A (2) (a), the Assessing Officer was duty bound to form a personal opinion, after having regard to the fair market value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of law have been proposed : (a) Whether on the facts and in the circumstances of the case, the Hon ble ITAT was justified in allowing depreciation on intangible assets amounting to ₹ 1,54,43,383/- as claimed by the assessee when the said disallowance of depreciation made by the Assessing Officer had been confirmed by the CIT(A) in view of the fact that the hotel operation of the appellant was suspended during the year under consideration as per the Auditors Report? (b) Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT was justified in deleting the disallowance of interest claim of 9% amounting to ₹ 1,60,22,465/- in respect of the fully convertible debentures issued to M/s. Cox an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that the Assessing Officer was relying upon sub Section 2 of Section 40A of the Income Tax Act, 1961 (the said Act). Even for a moment we proceed on the basis that Cox and Kings India Ltd. would come under the definition of person stated in clause (b) of sub Section 2 of Section 40A, the Assessing Officer has to form an opinion that the expenditure was excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of respondent or the benefit derived by or accruing to him therefrom. 5. In this case, respondent had issued debentures to Cox and Kings India Ltd. amounting to ₹ 18 Crores during the Assessment Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction: Provided that for an assessment year commencing on or before the 1st day of April, 2016 no disallowance, on account of any expenditure being excessive or unreasonable having regard to the fair market value, shall be made in respect of a specified domestic transaction referred to in Section 92BA, if such transaction is at arm s length price as defined in clause (ii) of Section 92F. As provided under Section 40A (2) (a), the Assessing Officer was duty bound to form a personal opinion, after having regard to the fair market value of the goods, services or facilities for which paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
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