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2019 (10) TMI 1519 - AT - Income TaxDisallowance of depreciation claim on intangible assets - assessee company had purchased business on slump sale basis - HELD THAT:- Issue decided in favour of assessee as relying on own case which has also been upheld by the Hon’ble Gujarat High Court [2019 (5) TMI 1208 - GUJARAT HIGH COURT] as held specified intangible assets , viz business claims, business information , business records , contracts , employees and of know-how acquired by assessee under slump sale agreement are in the nature of ‘business or commercial right’ of similar nature specified in section 32(1)(ii) and are accordingly eligible for depreciation - Decided in favour of assessee. Reallocating the personal expenses, foreign travelling expenses, staff welfare expenses, Oil and Petrol expenses and other common expenses between Bilag unit and BEOU in the turnover ratio - HELD THAT:- We find that turnover ratio of BEOU is 35.89% as compared to Bilag unit at 64.11%. However, the tribunal in the case of the assessee has restricted the allocation to 10% in assessment year 2004-05 and in A.Y.2005-06 - Therefore, following the consistency in approach, the ratio of allocation applied by the Tribunal is found to be correct. However, the assessee has itself allocated 17.96% in personal expenses, foreign travelling expenses, staff welfare, and oil & petrol expenses, hence, the disallowance made on this account is deleted. With regard to other common expenses allocated @15%, the AO is directed to allocate 10% to BEOU, therefore, this issue is partly allowed. In view of these facts and circumstances, this grounds of appeal is partly allowed. Exclusion of interest on others and liability no longer required to be written back while granting deduction under section 10B - HELD THAT:- We find that the issue on exclusion of interest income stands covered in favour of the assessee by the decision of tribunal in the case of Lubrizol Advanced Materials (India) Pvt. [2013 (12) TMI 1590 - ITAT AHMEDABAD] wherein it was held that once an income form part of business of undertaking, same would be included in profits of business of undertaking and will be eligible for deduction under section 10B - With regard to liabilities no longer written back, we find that the same pertains to expenses that have been allowed in the previous assessment years as business expenditure, therefore the same represents income from business, hence we are of the considered opinion same is allowable to be included for the purpose of deduction u/s.10B of the Act. In view of these facts, we allow this grounds of appeal in favour of the assessee.
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