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2024 (1) TMI 744 - AT - Income TaxDisallowance of depreciation on goodwill - HELD THAT:- Admittedly, similar issue came for consideration before this Tribunal in assessee’s own case [2022 (6) TMI 1295 - ITAT BANGALORE] Once the department accepted the capital gain offered by individual assessee in the respective hand, the same transaction cannot be doubted in the hands of purchaser. On this count also, we find force in the argument of Ld. A.R. that AO not established that the main purpose of transfer of such asset was reduction of liability to income tax by claiming extra depreciation on enhanced cost. In order to establish aforesaid fact, it has to be established that apart from claiming additional depreciation on enhanced cost, there is other main purpose for acquiring the asset i.e. goodwill in question. The AO in the instant case wrongly invoked the explanation 3 to section 43 of the Act. Our above decision is also supported by the order of the Tribunal relied by the Ld. A.R. in the case of M/s. Dorma India Pvt. Ltd., Chennai [2019 (11) TMI 1139 - ITAT CHENNAI] Further, we also place reliance on the judgement of Hon’ble Karnataka High Court in the case of Padmini Products (P) Ltd. [2020 (10) TMI 424 - KARNATAKA HIGH COURT] wherein similar circumstances Hon’ble High Court has allowed the claim of the assessee. As seen from earlier order of the Tribunal, the said decision is based on the judgement of Hon’ble Karnataka High Court in the case of Padmini Product Pvt. Ltd. cited (supra), the operation of which is stayed by Hon’ble Supreme Court as of now as mentioned above. In view of this, we are of the opinion that it is appropriate to remit this issue to the file of ld. AO to decide the same on consideration of final outcome of decision in the case of M/s. Padmini Products Pvt. Ltd. cited (supra). This issue is remitted to the file of ld. AO for fresh consideration as observed above. Disallowance u/s 14A of the Act read with Rule 8D(2) - AO invoked provisions of section 8D(2)(ii) of the Rules with regard to indirect expenses incurred by assessee which are common expenses and cannot be identified independently - HELD THAT:- We have carefully gone through the assessment orders, wherein the assessing officer clearly established that assessee has earned exempt income in these assessment years and claimed that no expenditure has been incurred in assessment year 2017-18 and 2018-19, however, disallowed a meagre amount of Rs. 6,000/- in the assessment year 2020-21 without applying the formulas specified in Rule 8D(2)(ii) for disallowance u/s 14A of the Act. Hence, it cannot be said that ld. AO has not applied his mind or recorded satisfaction on this issue. In our opinion, he came to subjective satisfaction on disallowance u/s 14A of the Act read with Rule 8D(2)(ii) of the Rules. We do not find any infirmity in the findings of the lower authorities and the same is confirmed.
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