TMI Blog2007 (11) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Sec. 115JA of the IT. Act on 31.3 2004. 3. The ld. CIT noted from the order of the Assessing Officer that the assessee's claim of depreciation at the rate of 25% on Non-compete Fee was wrongly allowed by the Assessing Officer. According to the ld CIT. the allowance of deduction without due verification was considered as erroneous and prejudicial to the interest of the Revenue which made the ld. CIT to proceed under Section 263 of the Act by issuing a notice to the assessee. The assessee has impleaded through its authorised representative and they filed written submission also. 4. On considering the submission the ld CIT found that certain basic facts relevant to the acquisition of the business and determining of Non-compete Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the allowance of Non-compete Fee. The learned D.R further submitted that during the year relevant, the intangible asset was not entitled to depreciation. There is no evidence in the assessment order nor shown by the assessee that the assessment order is made by the Assessing Officer on the application of mind nor the Assessing Officer decided the issue. Therefore the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. (supra) is directly application to the case before us. The learned D.R further relied on the decision of Hon'ble Supreme Court in the case of Rampyari Devi Saraogi v. CIT (1968) 67 ITR 84 (SC) and the decision of Hon'ble Delhi High Court in the case of Gee Vee Enterprises v. ACIT (1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue, the power vested under Section 263 of the Act which is a discretionary power of the Commissioner of Income Tax, is to be exercised. In other words, while exercising power under Section 263, the Department has to prove that the assessment order is erroneous and prejudicial to the interest of the Revenue. Both the conditions have to be satisfied for invoking Section 263 over an assessment order. Here, in this case, as rightly contended by the learned DR., there is no whisper in the assessment order about the allowability of the claim of depreciation on Non-compete Fee. The assessee capitalised the Non-compete Fee and claimed depreciation on that. However, in the assessment order there is no discussion about capitalisation of Non-comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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