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2021 (11) TMI 146 - AT - Income TaxDisallowance of depreciation on goodwill - whether the payment made over and above the net asset value, while acquiring a business concern, shall constitute good will or not? - HELD THAT:- As discussed in the preceding paragraph about the observation made by Chennai bench in the above said case in respect of the decision rendered in the case of Toyo Engineering India P Ltd [2012 (7) TMI 686 - ITAT, MUMBAI] i.e., the assets acquired by the above said assessee predominantly consisted of huge land and building. In the instant case, we notice that no land/building has been purchased and hence the facts prevailing in the Toyo Engineering India Pvt. Ltd were different from the facts of the present case. Accordingly, we are of the view that the decision rendered in the case of Toyo Engineering India Pvt. Ltd. will not apply to the facts of the present case. Accordingly, following the decision rendered by Hon’ble Delhi High Court in the case of Truine Energy Services Pvt. Ltd. [2015 (11) TMI 1218 - DELHI HIGH COURT], we hold that the amount paid in excess of the net asset value for acquiring a business concern shall constitute goodwill. Applicability of proviso to sec.32 (1) - It is not the case of the revenue that this transaction is between two related parties. Hence this purchase would not fall under the categories of succession, amalgamation and demerger. We have noticed that the tax authorities have observed that the spirit of the above said provisions should be applied to the present case. We are unable to agree. It is well settled proposition of law that the Income tax provisions should be construed strictly. Hence the scope of the above said proviso cannot be extended to the transaction of purchases between two unrelated parties. Eligibility of the assessee to claim depreciation on Goodwill cannot be decided unless the above said factual aspects are clarified. We have held, following the decision rendered in Truine Energy Services Pvt. Ltd. [2015 (11) TMI 1218 - DELHI HIGH COURT], that the excess amount paid over and above the net asset value on acquiring a business concern shall constitute goodwill. However, the said legal principle can be applied only if the facts relating to the case are clear. We have noticed that the facts are not clear in the instant case. Accordingly, in the interest of natural justice, we are of the view that the assessee should be provided with an opportunity to present the relevant facts. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue and restore the same to the file of the A.O. for examining afresh in the light of observations made (supra). After considering the information and explanations furnished by the assessee and also after affording adequate opportunity of being heard, the A.O. may take appropriate decision in accordance with law. Disallowance of interest paid u/s 201(1A) - assessee had paid interest u/s 201(1A) for the delay in payment of TDS - assessee claimed the same as deduction. The AO disallowed the above said claim and the Ld CIT(A) also confirmed the same - HELD THAT:- Identical issue has been considered by Delhi bench of Tribunal in the case of New Modern Bazaar [2021 (4) TMI 395 - ITAT DELHI] and it was decided against the assessee Disallowance of interest on bank overdraft u/s 40(a)(ia) - HELD THAT:- Admittedly, the interest paid on bank loans is not liable to TDS deduction and hence disallowance u/s 40(a)(ia) is not called for. However, we notice that the Ld CIT(A) has confirmed the disallowance only for want of evidence. Accordingly, in the interest of natural justice, we are of the view that the assessee should be provided with an opportunity to produce evidences in support of its claim. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO for examining it with the evidences that may be furnished by the assessee. After hearing the assessee, the AO may take appropriate decision in accordance with law.
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