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2015 (1) TMI 910 - AT - Income TaxAddition u/s 40A(2)(b) - royalty/supervision charges - CIT(A) deleted the addition - Held that:- No material has been brought on record by the Assessing Officer to show that M/s. Alkyl Amines and Chemicals Ltd was not in possession of technical know-how and technical now-how was not provided to the assessee. Further, no material was also brought on record to show that the royalty @ 2% of the sale value was in excess of the fair market value prevailing at the material time for the technical know-how in consideration of which the royalty was paid. In such circumstances, in our considered view, no interference with the order of the CIT(A) is warranted.Similarly, in respect of sale commission and supervision charges, we find that no material was brought on record by the Revenue to controvert the claim of the assessee that the same was paid for services received or to show that the payments were more than the fair market value of such services. We, therefore, do not find any good reason to interfere with the order of the CIT(A) which is hereby confirmed and the grounds of appeals of the Revenue are dismissed. - Decided against revenue. Depreciation on goodwill - Held that:- Explanation 3 to section 32(1) states that the expression ‘asset’ shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature. A reading of 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 rights of a similar nature’. The principle of ejusdem generis would strictly apply while interpreting the said expression which finds place in Explanation 3 (b) (para 4). In view of the above, it is opined that ‘Goodwill’ is an asset under Explanation 3(b) to section 32(1). (Para 5). - Decided in favour of assessee. Carpeting of existing road - revenue v/s capital - Held that:- it is not in dispute that the expenditure of ₹ 2,26,191/- was incurred for resurfacing of existing road. Thus, the expenditure incurred was on account of maintenance of existing road. No material was brought on record by the Revenue to show that the expenditure in question was incurred for acquiring any new asset, hence revenue innature. - Decided against revenue
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