Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 1402 - AT - Income TaxDepreciation on Goodwill - Assessee claimed depreciation at the rate of 25% on the opening WDV of goodwill - assessee had acquired a brewery, namely, ‘Karnataka Breweries and Distilleries Limited’ through a process of demerger - HELD THAT:- As Tribunal has decided the issue against the assessee in the cases for AY 2007-08 to 2009-10 [2016 (9) TMI 1527 - ITAT BANGALORE] and the decision will apply to the present AY also. The learned AR submits that the assessee has preferred appeal on the allowability of claim of depreciation before the Hon’ble High Court of Karnataka in ITA No.61/2017 and the same is pending adjudication. The learned DR was duly heard. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The disallowance should be restricted to the amount of exempt income earned by the assessee. The amendment to section 14A of the I.T. Act, which states that disallowance u/s 14A of the I.T. Act is to be resorted, whether the assessee earns exempt income or not is only prospective and does apply to the relevant assessment year. In this context, we rely on the order of Bajaj Capital Ventures (P) Ltd. [2022 (7) TMI 23 - ITAT MUMBAI]. It is ordered accordingly. Addition u/s 40(a)(ia) which were year-end provisions reported in the Form 3CD - HELD THAT:- We find on identical facts and circumstances, the co-ordinate Bench of the Tribunal in assessee’s own case for assessment years 2013-2014 [2022 (6) TMI 1433 - ITAT BANGALORE] has restored the issue to the A.O. with specific directions to verify the details of payments and tax deducted and allow the expenditure where the TDS is remitted to the Government account on or before the due date for filing the return of income. Addition u/s 43B - Assessee did not remit statutory dues [CST, excise duty on closing stock] before the due date of filing of return of income - AO rejected the contention of the assessee and held that the CST, excise duty on closing stock collected and paid are included in the valuation of purchase, sale and inventory, then effect will be nil only if the said amounts are paid within the due date of filing return in terms of section 43B - CIT(A) held that the assessee has claimed an expenditure which is yet to be paid and is liable to section 43B disallowance - HELD THAT:- We find that on identical facts, the Tribunal in assessee’s own case for assessment year 2011- 2012 [2022 (10) TMI 1204 - ITAT BANGALORE] remitted the issue to the files of the A.O.with a direction to verify and allow the claim of the assessee taking into consideration the rectification order passed u/s.154. Withholding tax amount on foreign royalty - AO during the course of hearing noticed that the assessee has disclosed only 90% of the Royalty amount for taxation on the ground that the balance 10% would represent tax withheld by the payer and the assessee had not received the said amount either in the form of TDS certificate or actual consideration basis till date - HELD THAT:- Tribunal in assessee’s own case for assessment year 2010- 2011 [2022 (10) TMI 1204 - ITAT BANGALORE] remitted the matter to the files of the A.O. with a direction to allow credit for the tax paid in foreign countries on the doubly taxed income in accordance with the provisions of section 90/91 r.w. Rule 128 based on the documents / evidences submitted by the assessee in this regard. Addition on account of brand promotion expenses - AO held that ‘brand’ being an intangible asset, any expense incurred towards development of brand or brand promotion leads to an enduring benefit and should be capitalized - HELD THAT:- Following the above order of the Tribunal in the case of United Spirits Limited [2022 (4) TMI 1408 - ITAT BANGALORE] we allow deduction in respect of brand promotion expenses. Capital gains and addition u/s 115JB - HELD THAT:- Assessee has rightly pointed out that if the shares were cancelled in the first instance, instead of creating the Trust to hold the same, the same would not have resulted in capital gains. Since under both the arrangements, i.e., cancellation of its beneficial holding or under the Trust, there is no resultant capital gains that will be liable to tax, there is no question of painting the arrangement as colourable device. When the subject income has already been offered to tax by the Trust whereby exemptions have been claimed, the lower authorities have failed to establish the reason why the very same income has to be once again considered in the hands of a different assessee. Even if, for academic reasons, it were to be held that the income of the Trust is the income of the Assessee, given the provisions of section 10(38) of the I.T. Act, there is no reason why the benefit of the exemption cannot be extended to the assessee as well. With respect to the provisions of section 115JB of the I.T. Act, the lower authorities have sought to include the subject amount as a part of 'book profits' though the same is added to the General Reserves and not in the profit and loss account. In the event of books of accounts being prepared in accordance with the provisions of the relevant Companies Act, it is well accepted that the AO has no jurisdiction to go behind net profit shown in the profit and loss account except to the extent provided therein. As it has been held above that the said amount is not the income of the Assessee but of the Trust, there is no question of considering it as a part of book profits. On going through the impugned orders there is no effort to establish the same. Given the same, the CIT(A)/AO have erred in disturbing the book profit as considered by the Assessee. Short credit of taxes - We restore the issue raised in ground to the files of the A.O. The A.O. is directed to verify and grant TDS and TCS credit as per law. Disallowance u/s 14A added to book profits - HELD THAT:- The Hon’ble jurisdictional High Court in the case of CIT v. Gokaldas Images [2020 (11) TMI 345 - KARNATAKA HIGH COURT] had held that disallowance u/s 14A cannot be added to the book profits for the purpose of section 115JB of the I.T. Act - we delete 14A disallowance added to the book profit.
|