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2016 (12) TMI 459 - AT - Income TaxDepreciation on goodwill - Held that:- Considering the provisions of Explanation 3 to Section 32(1) of the Act found that the word “any other business or commercial rights of similar nature” in clause (b) of Explanation 3 indicates that goodwill will fall under the expression “any other business or commercial rights of similar nature”. In view of the above judgment of Apex Court in SMIFS Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT ], we are unable to uphold the orders of the lower authorities. Accordingly, we set aside the orders of the lower authorities. The Assessing Officer is directed to allow depreciation at the applicable rate on the payment relatable to goodwill - Decided in favour of assessee MAT credit - Carry forward of MAT credit of erstwhile company by amalgamated company - Held that:- As decided in assessee's own case when the assessee company is now being assessed in place of erstwhile company and the TDS credit pertaining to the erstwhile company is being given credit to the assessee company, there is no reason why a different treatment should be given to the MAT credit available pertaining to the erstwhile company. We do not agree with the learned Commissioner of Income Tax (Appeals) that there is need for specific mention in this regard in Section 115JAA as the Carry forward of MAT credit of erstwhile company by amalgamated company is in-built in the scheme of amalgamation as well as the scheme of MAT credit. Hence, we set aside the order of learned Commissioner of Income Tax (Appeals) in this regard and decide the issue in favour of the assessee. Apportionment of expenses - assessee has claimed the entire expenses from Chennai Unit which is not eligible for deduction u/s 80IC - Held that:- During appeal, the ld. AR did not bring any evidence to prove that the expenditure was completely relatable to Chennai Unit. It appears from the nature of expenses listed in the assessment order that he expenditure was common expenditure incurred for the purpose of carrying on the business by the assessee of both the units. The expenditure cannot be identified item wise with the particular unit. Therefore, we hold that the CIT(A) has rightly confirmed the addition made by the Assessing Officer. We, therefore, uphold the same dismiss the ground raised by the assessee. Exclusion of income from sale of DEPB and focus market scheme for computation of deduction u/s 80IC - Held that:- The issue is not relating to the subsidies received from Government in the Meghalaya State a backward state towards the reimbursement of expenses ,which has a direct nexus to the manufacturing activity but it is related to the issue of DEPB entitlement and reimbursement of focus market scheme which are in the form of grants from the Government. The immediate source of income was from the Government and not the business of the assessee. This being the case we are of considered opinion that the amounts received on account of DEPB entitlements and the export incentives in the form of Focus marketing are not qualified for the deduction u/s 80 IC of the Act Hon’ble supreme court judgment in the case of CIT.v. Sterling Foods Ltd (1999 (4) TMI 1 - SUPREME Court ) and Liberty India v CIT [2009 (8) TMI 63 - SUPREME COURT ] are squarely applicable in the assessee’s case. Therefore, we hold that the CIT(A) has rightly confirmed the addition made by the Assessing Officer and the same is confirmed.
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