TMI Blog2010 (10) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... e respective appeals and cross objection are as under: - Grounds of ITA No. 3810/Del/2010: - 1. The order of the ld. CIT(A) is erroneous and contrary to facts and law. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting disallowance of ₹ 53,55,000/- on account of deferred revenue expenditure. 2.1The ld. CIT(A) has erred in ignoring the fact that the benefit of depreciation u/s 32 of the Act is allowable on tangible assets and goodwill is intangible asset and is not entitled for the benefit of depreciation. 3. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing. Grounds of ITA No. 3811/Del/2010 : - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also vague. c) That the notice u/s 148 issued is illegal as it tantamounts to change of opinion by the ld. AO. 4. That the respondent assessee reserves its right to add, amend/modify the grounds of cross objections. 2. At the outset it was pointed out by ld. AR that issues raised by the department in its appeals are covered by the earlier orders of the Tribunal. He referred to the pages no. 43 to 62 of the paper book in which the copies of orders of ITAT are placed as below: - Asstt. Year Order Dated ITA No. Page No. 2002-03 27.03.09 2880Del/09 43-46 2005-06 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) that ITAT in assessee s own case for A.Y. 1990-91 had allowed deferred revenue expenditure vide order dated 22.11.06 and ld. CIT(A) had deleted the addition holding that if the expenditure incurred are revenue expenditure they have to be allowed in their entirety in the year in which they have incurred and, therefore, he has allowed the claim of the assessee. 7. Before us reliance was placed by the assessee on the order of the Tribunal for A.Y. 2003-04 and 2004-05 in ITA Nos. 3365 and 3335/Del/08 dated 6th July, 2009 following which the Tribunal has deleted the similar addition following the aforementioned order dated 6th July, 2009 the relevant portion is reproduced below: - 6. Having given our consideration to the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for carrying on its business more effectively and more efficiently. Expenses were incurred for purposes of business. Samples like advertisement, may be beneficial to the assessee not only in the year in which expenses are incurred but in other years also. But on that account, expenses cannot be treated as of capital nature. This proposition is now well accepted in the light of decision of Supreme Court noted by ld. CIT(Appeals) in the impugned order. There being no dispute that expenses were necessary for efficient running of business and, therefore, for the purposes of business, these were required to be allowed in terms of sec. 37(1) of the Income Tax Act. On facts, we do not find any error in the approach of ld. CIT(Appeals). The view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly allowed in the past. The ld. AO in our view, was not correct in making a departure from the past and in holding that payment was made for acquisition of goodwill . Payment had been made for acquisition of commercial rights on which depreciation is permissible. The AO was further not justified in treating entries in the books of account as conclusive and in taking payment in dispute as consideration for acquisition of goodwill. It is now more or les settled that entries in books cannot be treated as conclusive and true nature of transaction has to be determined with reference to law. The ld. CIT(A) in the impugned order examined the issue with reference to agreement and found that payment was made for acquisition of commercial rights. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k to the file of CIT(A) with a direction to decide the same after giving reasonable opportunity of hearing to the assessee. 13. On the other hand, ld. DR relied upon the order of CIT(A). 14. After hearing both the parties, we found that ld. CIT(A) has not adjudicated the basic issue regarding the validity or otherwise of reassessment proceedings. We found substance in the argument of ld. AR that the same should have been adjudicated first. Therefore, we restore this issue before ld. CIT(A) with a direction to adjudicate the issue after giving the reasonable opportunity to the assessee. We direct accordingly. The Cross Objection filed by the assessee is allowed for statistical purposes in the manner aforesaid. 15. To sum up both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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