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TMI Blog2018 (10) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has erred in sustaining the disallowance amounting to Rs. 39,55,078/- made by the Deputy Commissioner of Income Tax, Circle 11(1), New Delhi ("Ld. AO") in respect of depreciation claimed under Section 32 of the Act during the relevant previous year, relatable to a trademark acquired by the Appellant in the financial year 2006-07; 1.2. That the Hon'ble CIT(A) in an arbitrary and mechanical manner, sustained the aforesaid disallowance of depreciation, purely on the basis of conjectures and surmises and hence, the instant disallowance is bad in law; 1.2.1 That while sustaining the instant disallowance of depreciation, the Hon'ble CIT(A) has grossly erred in observing the following at paragraph 3.1 of the impugned order: "3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee at the prescribed rate was disallowed. During the year under assessment, the assessee claimed depreciation @ 25% on WDV of the trademark to the tune of Rs. 5,29,82,100/- which has been disallowed by the AO by following the order passed by the TPO in AY 2007-08 and thereby made an addition of Rs. 39,55,078/-. 3. Assessee carried the matter by way of appeal before the ld. CIT (A) who has partly allowed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle that inter alia finds expression in the OECD guidelines. As far as the objection of the Ld. TPO that whether there is any need for purchase of such intangible or not is concerned, we are of the view that what is to purchase and what not to purchase is not in the domain of the TPO/AO, because it is a business decision of the assessee company and accordingly, when assessee purchased an intangible asset, what is required under the law is to examine whether the price paid by the assessee is arms length price or not. The TPO has no role to play in examining the decision of commercial nature. Under the guise of TPO provisions, the TPO cannot determine the ALP at NIL as held by the Hon'ble Delhi High Court in the case of EKL Applian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal to the TPO, the present assessment order passed by following the said order is also not sustainable. Similarly identical issue in AY 2010-11 in ITA No.5629/Del/2014 order dated 30.06.2017 in assessee's own case has also been set aside by the Tribunal to the TPO for determining the arm's length price of international transaction qua purchase of intangibles. 8. In view of what has been discussed above, issue in controversy is also remanded back to the TPO/AO to decide afresh after providing an opportunity of being heard to the assessee in view of the case laws discussed by the coordinate Bench of the Tribunal in AYs 2007-08 and 2009-10 (supra). Consequently, appeal filed by the assessee is allowed for statistical purposes. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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