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2015 (12) TMI 1842 - AT - Income TaxTP Adjustment - disallowance of the corporate service charges - HELD THAT:- It is seen from the DRP’s order for A Y 2010-11 that observing that the facts of the matter are similar to those for A. Y. 2009-10, the DRP followed the same findings and decisions therein. In that view of the matter, we follow the decision of the co-ordinate bench in the assessee’s own case for A. Y. 2009-10 [2015 (9) TMI 286 - ITAT MUMBAI] and accordingly, in the interest of equity and justice, remit this matter of the computation of the ALP of the international transactions on account of the payment of corporate service charges by the assessee to its AE, to the file of the DRP for fresh adjudication by way of a speaking and reasoned order after affording reasonable opportunity to the assessee of being heard. It is accordingly ordered. Consequently, ground no. 1 is treated as allowed for statistical purposes. Disallowance of Depreciation on goodwill - assessee contends that the AO erred in not following the directions issued by the DRP to allow the assessee depreciation on goodwill u/s. 32(1)(ii) - HELD THAT:- For A. Y. 2010-11 that the AO has not considered and allowed the assessee depreciation on goodwill of polymehtane business and textile effects business as directed by the DRP - We, therefore, direct the AO to follow the directions of the DRP and compute and allow the assessee depreciation on goodwill for A. Y. 2010-11. Depreciation on intangibles - HELD THAT:- We find that the very same issue of allowability of the assesee’s claim of depreciation on intangible assets viz. Material supply contracts, brand usage and distribution networks was considered at length by a coordinate bench of this Tribunal in[2015 (9) TMI 286 - ITAT MUMBAI] wherein it has been held that the assessee is entitled to claim depreciation on intangible assets. Decided in favour of the assessee. Disallowance u/s. 14A r.w.r. 8D - As contended that the authorities below ought to have taken into account that investments made were by way of strategic investments in its subsidiary concern out of interest free funds - HELD THAT:- Following the aforesaid decisions in the cases of Holcim India (P) Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] and Cheminvest Ltd.[2015 (9) TMI 238 - DELHI HIGH COURT] we hold that since the assessee has not earned any exempt income in the year under consideration, i. e. assessment year 2010-11, no disallowance u/s. 14A of the Act can be made and accordingly delete the disallowance made in this regard by the authorities below. Disallowance of Expenditure on payment basis u/s. 43B - not allowing deduction for payment it made in connection with liabilities of CIBA Speciality Ltd. taken over by way of slump sale - assessee submitted that the assessee had taken over the liabilities of CIBA Ltd. and that these being known liabilities of which the assessee had to bear the expenditure as per the agreement - HELD THAT:- The recovery of the debt is a right transferred along with the numerous other rights comprising the subject of the transfer. If the law permits the transferor to treat the whole or part of the debt as irrecoverable and to claim a deduction on that account, the same right should be recognised in the transferee. It is merely an incident flowing from the transfer of the business, together with its assets and liabilities, from the previous owner to the transferee. It is a right which should, on a proper appreciation of all that is implied in the transfer of a business, be regarded as belonging to the new owner - See T. Veerbhadra Rao case [1985 (7) TMI 2 - SUPREME COURT] - Decided in favour of assessee.
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