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2020 (4) TMI 459 - AT - Income TaxReopening of assessment - assessment reopened beyond four years - wrong claim u/s 10(B) - HELD THAT:- There is not even whisper in the assessment order that there was any negligence on the part of the assessee in disclosing the particulars which is required for completing the assessment. It is also not in dispute that the assessment was reopened after four years therefore, the provisions of s. 147 of the Act will come into operation. Unless the AO establishes that there was any negligence on the part of the assessee in disclosing all the material facts relevant to the assessment, the assessment cannot be reopened. In this case, it is not the case of the Revenue that there was any negligence on the part of the assessee in disclosing the material facts relevant to the assessment years therefore, the CIT(A) has rightly allowed the appeals of the assessee and the same is confirmed. Expenditure incurred for registration of trade mark - Nature of expenditure - revenue or capital expenditure - HELD THAT:- This Tribunal is of the considered opinion that the trade mark is nothing but a capital asset. Admittedly, the assessee incurred the expenditure for registration of the trade mark in foreign countries therefore, any expenditure incurred by the assessee in connection with creation/establish of capital asset has to be necessarily be treated as a capital expenditure and the assessee cannot claim the same as revenue expenditure. However, as rightly submitted by the Ld. Counsel for the assessee, the assessee is entitled for depreciation. Therefore, the AO may allow depreciation at the applicable rate. Disallowance of expenditure u/s. 14A r.w.r. 8D - HELD THAT:- Tribunal is of the considered opinion that in case the assessee has invested the borrowed funds it has an impact on the expenditure therefore, it has to be ascertained before making any disallowance. Moreover, as rightly submitted by the Ld. counsel for the assessee, the investment which earned dividend income or exempt income alone has to be considered for limb 2 and limb 3 of Rule 8D(2) of the Rules. This aspect also needs to be re-examined. Both the authorities below has examined this aspect, the orders of the authorities below are set aside and the entire issue with regard to the disallowance u/s. 14A of the Act is remitted back to the file of AO. AO shall re-examine the matter afresh in the light of the material that may be filed by the assessee and decide the issue in accordance with law after giving a reasonable opportunity to the assessee. Exemption claimed u/s. 10B - HELD THAT:- In view of the judgment of Camiceria Apparels India (P.) Ltd. [2019 (3) TMI 73 - MADRAS HIGH COURT] the matter needs to be re-examined. It is also necessary to compute the eligible deduction by applying the provisions of sub s. (4) to s. 10B of the Act. This aspect naming the judgment of the Madras High Court and the provisions of Section 10B (4) of the Act was not considered by the earlier Bench of this Tribunal when the issue was decided against the assessee. Therefore, this Bench of the Tribunal is of the considered opinion that the decision in the assessee’s own case for the earlier assessment years may not be applicable for the year under consideration. Accordingly, the orders of the both the authorities below are set aside and the issue with regard to deduction u/s. 10B of the Act is remitted back to the file of AO.
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