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2014 (5) TMI 35 - AT - Income TaxDisallowance of depreciation on goodwill Held that:- The decision in CIT vs Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] followed - Explanation 3 states that the expression `asset' shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature - A reading the words `any other business or commercial rights of similar nature' in clause (b) of Explanation 3 indicates that goodwill would fall under the expression `any other business or commercial right of a similar nature' Decided in favour of Assessee. Disallowance of gratuity payment Held that:- The issue is now approved by the CIT as per the letter of approval appended in the APB thus, the assessee's prayer for allowance of the gratuity payment is allowed the order of the CIT(A) set aside Decided in favour of Assessee. Disallowance u/s 14A of the Act Held that:- The decision in M/s Just Dial Private Limited Versus Dy. CIT 9(2), Mumbai [2013 (12) TMI 770 - ITAT MUMBAI] followed - the application of Rule 8D is w.e.f. assessment year 2008-09 as per the decision of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT, [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the matter has been remitted back to the AO for fresh adjudication in the subsequent assessment year Decided in favour of Assessee. Taxability of income - Income from publication in yellow pages Held that:- The revenue is to be booked when the work is completed - the work undertaken gets spilled over in the next year, wherein, the assessee books its revenue & declares it - if the orders of the revenue authorities are to be sustained, the department will have a revenue gain, because, the AO has not made any adjustment to the income pertaining to the preceding year and has been booked in the current year - In effect, the assessee is being taxed for the preceding year, and as per the orders, for the current year as well - to keep the consistent approach and most importantly there being no revenue loss, the view of the revenue cannot be accepted thus, the order of the CIT(A) set aside and the AO is directed to delete the addition Decided in favour of Assessee. Disallowance of renovation and civil expenses Held that:- The premises renovated did not belong to the assessee and the assessee incurred expenses, to design the premises to a condition for its use - Since the premises are leased, the lessee always have an option to remove the alternations done by him/it, because he has to return the premises, at the end of tenor in the same condition, as it was taken - the licensee is authorized to remove all its renovations at the time of vacation or it can ask the licensor to take the same - the repairs and renovations are done only for the period of stay/tenor, which may be short or long, it cannot be said to giving an enduring benefit to the assessee - the expenditure incurred by the assessee on repairs and renovations are allowable expenses the order of the CIT(A) set aside and the AO is directed to delete the addition Decided in favour of Assessee. Disallowance of franchise termination compensation Held that:- There is an agreement for termination, but the amount as claimed is at variance, because as per the orders, the amount paid aggregates to ₹ 19,50,000/- and not ₹ 18,50,000 thus, the matter is remitted back to the AO for fresh for the issue of payment of termination compensation of ₹ 18,50,000 Decided in favour of Assessee.
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