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2016 (1) TMI 755 - AT - Income TaxDisallowance of depreciation on Goodwill - Held that:- the claim of the assessee company needs to be verified with reference to the agreements and other documents which has now been filed as additional evidence before us and the books of account by the assessee company. As such, we remit the matter back to the file of A.O. for deciding the issue afresh after considering the agreements along with the assets acquired, other evidences as submitted by the assessee company and the books of accounts of the assessee company to arrive at the conclusion on the issue in the light of various decisions cited by the assessee company in accordance with law. Needless to say that proper and adequate opportunity of being heard shall be granted to the assessee company by the AO in accordance with the principles of natural justice. We must clarify that we have not commented on the merits of the claim of the assessee company about payment of goodwill for acquisitions of the business of 'Sangam Direct' which shall be adjudicated by the AO on merits after considering the contentions along with evidences submitted by the assessee company without being influenced by our observations in this appeal. - Decided in favour of assessee for statistical purposes. Disallowance of preliminary expenses written off u/s 35D - Held that:- The assessee company has incurred an amount of ₹ 70 lacs towards increase in authorized share capital, out of which 1/5th of such expenses i.e. ₹ 14 lacs was claimed as deduction u/s 35D of the Act. The assessee company has taken this plea before us for the first time that these expenses are relatable to extension of undertaking which has not been verified by the authorities below. We are also aware that the Hon'ble Supreme Court in the case of Brooke Bond India Ltd.(1997 (2) TMI 11 - SUPREME Court ) and Punjab State Industrial Development Corporation Limited (1996 (12) TMI 6 - SUPREME Court ) has held that these expenses incurred for increase in authorized capital are capital expenditure. This claim of the assessee company that these expenses incurred for increase in authorized capital are relatable to the extension of undertaking needs to be verified by the authorities below and accordingly we set aside the orders of authorities below and restore the matter back to the file of A.O. for necessary verification and decide the issue afresh on merits - Decided in favour of assessee for statistical purposes. Disallowance of loss of stock being the difference between the book stock and physical inventory - CIT(A) allowed the claim - Held that:- the assessee company is dealing in slow moving items which are prone to pilferage, wastage, breakage and damages etc. The items dealt with the assessee company are perishable in nature specially fruits, vegetables, liquid items etc. which could not have been sold to customers after the date of expiry as these items have limited life. The assessee company is stated to have claimed the write off of such stock based on applicable accounting standards which are mandatory in nature but failed to submit details of differences between physical stock and book stock before the authorities below, which is filed before us but the same need verification by the authorities below. In our considered opinion and in view of the interest of justice, this matter need to be restored to the file of A.O. for the limited purpose of verification of the genuineness of the claim of losses on account of slow moving perishable items between physical stock and book stock as claimed by the assessee company. - Decided in favour of revenue for statistical purposes.
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