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2020 (3) TMI 416 - AT - Income TaxTP Adjustment - Central Service Charges - Cost Allocation - HELD THAT:- Respectfully following the decision of the Hon'ble jurisdictional High Court in the case of Johnson & Johnson [2017 (3) TMI 1520 - BOMBAY HIGH COURT] we hold that the action of the Revenue in accepting only 75% of the expenses to be at arm's length is not correct. Accordingly, we direct the ld.TPO to consider the entire 1,07,000 Euro (8,000 + 48,000 + 51,000) in respect of three expenses as stated supra, as the expenditure incurred for the purpose of business of the assessee and which is determined to be at arm's length and accordingly no adjustment in that regard is called for. Depreciation of non-compete fees - As decided in CIT vs Ingersoll rand internationa [2014 (6) TMI 934 - KARNATAKA HIGH COURT] and Pentasoft technologies vs DCIT [2013 (11) TMI 1057 - MADRAS HIGH COURT] held that depreciation/amortisation of the non-compete fee was held to be allowable on the ground that as held by honourable Madras High Court it strengthens the transfer of IPR and as held by honourable Karnataka High Court it fell into the realm of definition under section 32. No decision from honourable jurisdictional High Court has been cited before us. In this view of the matter honourable Apex Court decision in the case of Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] has to be followed. In the said case law honourable court had expounded that if two constructions are possible the one in favour of assessee should be adopted. Since the decision of the learned CIT(A) is in accordance with the ratio arising from the decision of honourable Karnataka High Court and honourable Madras High Court as above we do not find any infirmity in the same in absence of any direct jurisdictional High Court decision on the subject. Hence we uphold the order of ld CIT(A) on this issue Applicability of provision of section 43A - CIT(A CIT(A) held that since this criteria is not fulfilled as person from whom business is acquired is also an Indian company hence, he has held that section 43A is not at all applicable - HELD THAT:- CIT(A) in his adjudication has not considered the finding of the Assessing Officer that the asset involved in slump sale included areas of Nepal, Sri Lanka and other. In this view of the matter learned CIT(A)’s finding is not at all sustainable. Since learned CIT(A) has not considered all aspect of the reasoning given by the Assessing Officer for making the addition, we deem it appropriate to remit this issue to the file of learned CIT(A) to consider them afresh and pass a speaking order on this issue. Needless to add the assessee should be granted adequate opportunity of being heard. CIT(A) in his adjudication has neither referred to this decision nor dealt with the aspect of Assessing Officer’s order that the asset acquired included a reference to Sri Lanka and Nepal. However, in this regard, we note that the said decision of Hon'ble Delhi High Court was with respect to section 9(1)(i) of the Act. It was not rendered in connection with section 43A of the Act. It is settled law that decision has to be considered in terms of context in which it is rendered.
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