2014 (1) TMI 1768 - AT - Income Tax

Allowance of depreciation on the written down value (WDV) as being carried over - Held that - The depreciation on goodwill having been in fact allowed by the Revenue for A.Ys. 2000-01 and 2002-03 as also the subsequent years. In view of the foregoing; there being no finding that the said asset/s has been removed from the relevant block of assets we have no hesitation in following the said decision for the current year as well. Accordingly the assessee s claim merits being upheld. Genuineness of expenses - Disallowance u/s. 40(a) - Held that - the assessee apart from a debit note which is not legible at all could hardly furnish any material or evidence with regard to the rendering of the services i.e. as was the case before the Revenue authorities. The ld. AR also conceded before us to no material being available with the assessee to establish the rendering of the relevant services which though is rendered of no consequence in the facts of the case. - Expenses not allowed.

Summary

Issues involved:
1. Depreciation on goodwill
2. Transfer Pricing adjustments
3. Disallowance of payment for technical and allied services

Depreciation on goodwill:
The appellant's appeal raised three issues, with the first issue regarding depreciation on goodwill. The Tribunal referred to its order for A.Y. 2004-05, directing the allowance of depreciation on the written down value (WDV) as carried over. The Tribunal found that the depreciation on goodwill had been allowed for previous years, and since there was no finding that the asset had been removed from the block of assets, the claim was upheld. The decision was consistent with the findings of the Dispute Resolution Panel (DRP) and was applied for the current year as well.

Transfer Pricing adjustments:
The second issue pertained to transfer pricing adjustments, which were also covered by the Tribunal's order for A.Y. 2004-05. The Tribunal had sent the matter back to the Transfer Pricing Officer (TPO) for fresh adjudication. Since there were no material changes in the facts, the same decision was applied for the current year to maintain consistency in adjudication. This approach ensured fairness in representation for both the Revenue and the assessee.

Disallowance of payment for technical and allied services:
Regarding the third issue of disallowance of payment for technical and allied services, the Tribunal clarified that the disallowance was not under section 40(a)(ia) as contended. The assessment order did not adjust the returned income for the claim, emphasizing that the disallowance was under section 37(1) due to insufficient details. The appellant's lack of evidence to establish the services rendered led to the grievance being deemed misconceived and unmaintainable. The Tribunal found the appellant's claim to be without merit, and the appeal was partly allowed based on these considerations.

In conclusion, the Tribunal's judgment addressed the issues of depreciation on goodwill, transfer pricing adjustments, and disallowance of payment for technical and allied services. The decision was based on the Tribunal's previous orders and careful examination of the facts and legal provisions, ensuring a fair and consistent approach to adjudication.