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2016 (8) TMI 1505 - AT - Income TaxRevision u/s 263 - Nature of expenses - expenses incurred by the assessee company for launch/ initial issue of ‘Franklin India Flexicap Fund’ and one other scheme - revenue or capital expenditure - HELD THAT:- As on debatable issues where two views are possible jurisdiction u/s.263 is not to be exercised. We accordingly hold that exercise of jurisdiction u/s.263 could not have been made. As the impugned order passed u/s 263 has been quashed by the Tribunal [2012 (6) TMI 629 - ITAT MUMBAI] and therefore, there are no basis to continue with the impugned disallowance made by the AO on account of launch/initial issue expenses in consequent to the order passed by the CIT u/s 263. Therefore, under these circumstances the impugned disallowance being devoid of force of law is directed to be deleted. - Decided in favour of assessee. Disallowing the administrative and other expenses and depreciation allowance - expenses pertaining to a erstwhile company which stood merged/amalgamated with the assessee company - HELD THAT:- There is no dispute that the assessee company is engaged in the business activities in a full-fledged manner. This fact is confirmed in the impugned assessment order passed in the hands of the assessee company wherein income of the assessee company has been assessed under the head ‘income from business’. It is further noted that in the hands of erstwhile company itself, the AO of the said company in subsequent year i.e. A.Y. 2007-08 assessed its income under the head ‘income from business’ and also allowed the benefit of depreciation. Thus, no contradictory action could have been taken in the hands of the assessee company while computing taxable income of the erstwhile company to be included in the taxable income of the assessee company, in consequence to the amalgamation/merger of FTAMC into the assessee company - entire facts and circumstances of this case suggest that lower authorities have themselves acknowledged factum of continuation of business - no rational to disallow routine administrative expenses under the erroneous presumption of non-continuation of business activities - disallowance of expenses and depreciation to be incorrect on facts as well as on law. - Decided in favour of assessee. Depreciation allowance u/s 32(1)(ii) of goodwill acquired by the assessee on acquisition and merger - HELD THAT:- As relying on SMIFS SECURITIES LTD. [2012 (8) TMI 713 - SUPREME COURT] assessee is prima facie entitled for the claim of depreciation on the amount of Goodwill acquired by the assessee on account of acquisition of erstwhile company (FTAMC). However, we find it appropriate that requisite facts in this regard should be verified by the AO. Therefore, we send this ground back to the file of the AO. The AO shall verify the factual assertion made by the assessee that depreciation has been allowed on this amount of Goodwill in subsequent years, as has been claimed before us. If it is found to be correct, then depreciation should be granted from the beginning. The assessee shall file requisite documents in support of its claim. AO take into account all the documentary evidences and other submission as may be made available by the assessee on objective basis before deciding this issue afresh, but keeping in view the legal position as discussed. - Decided in favour of assessee for statistical purposes.
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