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2019 (9) TMI 720 - AT - Income TaxCapital gain arising on account of the succession of the firms - scheme of succession under section 47(xiii) - whether the assessee is entitled to the depreciation on the intangible assets acquired by it in the given facts and circumstances? - HELD THAT:- there is no requirement under the provisions of section 47(xiii) of the Act that the firms should be converted into the company. It is sufficient if the existing company acquires all the assets and liabilities of the partnership firms in the manner as provided under section 47(xiii) of the Act to claim the exemption from the capital gain. Similarly, even if the valuation of the technical know-how and the trademark is determined at nil value, then also there would not be any violation of holding the shares in the proportion of the capital in the firm as stood immediately before succession as specified under section 47(xiii) of the Act. Further, there is no prohibition for the introduction of new partners in the partnership firms before the date of succession. As such, the introductions of the partners in the firm before the date of succession does not act as an estoppel on the operation of the exemption provided under section 47(xiii) of the Act. There was no violation of the provisions of section 47(xiii) - Benefit of scheme allowed. Claim of Depreciation - technical know-how and trademark - Held that:- ITAT Mumbai Bench in the case of the DCIT versus Suyash Laboratories Ltd [2016 (1) TMI 977 - ITAT MUMBAI] held that the depreciation on the revalued assets could not be disallowed in the hands of the assessee if acquired in the manner specified under section 47(xiii) of the Act. In the case on hand there was a valuation report furnished by the assessee certifying that all the assets and liabilities which were acquired at the book value in the manner provided under section 47(xiii) of the Act. All the conditions as specified under the provisions of section 47(xiii) of the Act has duly complied. - the assessee cannot be denied for the amount of depreciation claimed by it. Hence, we do not find any reason to interfere in the finding of the Ld. CIT-A. - Decided against revenue Addition on account of payment made to the persons specified under section 40A(2) - CIT-A deleted the addition - HELD THAT:- AO has made the disallowance after treating the payment made by the assessee to the specified persons under section 40A(2) of the Act as excessive and unreasonable without bringing any comparative cases. In such cases, we are of the view that the expenses incurred by the assessee cannot be held excessive and unreasonable until and unless these are backed by some documentary evidence. Accordingly, we are of the view that the order of the Ld. CIT-A does not suffer from any infirmity. - Decided against revenue
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