Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 891 - HC - Income TaxDepreciation on payment of non-compete fees - as per Revenue, this being an intangible asset, no depreciation u/s 32 was available - HELD THAT:- Similar issue has been considered by the different High Courts and held in favour of the Assessee. A reference can be made to the decision of the Division Bench of the Gujarat High Court in the case of Pr. CIT v. Ferromatice Milacron India (P.) Limited 2018 (10) TMI 1955 - GUJARAT HIGH COURT. It was also the case where the Assessee had incurred expenditure pursuant to the non-compete agreement and claimed depreciation on such asset. Rights acquired by the assessee under the said agreement not only give enduring benefit, protected the assessee's business against competence, that too from a person who had closely worked with the assessee in the same business. The expression "or any other business or commercial rights of similar nature" used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include the present situation. - decided in favour of assessee. Expenditure incurred for gaining controlling interest of a subsidiary company - Allowable business expenditure - HELD THAT:- This Court in the case of CIT v. Phil Corpn. Limited [2011 (6) TMI 912 - BOMBAY HIGH COURT] held that the Assessee was entitled to deduction of interest on overdraft under Section 36(1)(iii) of the Act when the investment was made by the Assessee in shares of subsidiary of the company to have control over the said company. Madras High Court in the case of CIT v. Shriram Investments (Firm) Moogambika Complex, Chennai [2014 (11) TMI 55 - MADRAS HIGH COURT] has taken similar view - decided in favour of assessee. Disallowance of interest on the borrowed funds given to the sister concern and its directors - assessee failure to prove that each of the loan on which the assessee paid interest in the accounting year was utilized for the purposes of the business - HELD THAT:- Tribunal by the impugned Judgment followed the decision of the Supreme Court in case of S.A. Builders Limited v. CIT [2006 (12) TMI 82 - SUPREME COURT] and held that such expenditure was made for the purpose of business. - decided in favour of assessee.
|