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TMI Blog2011 (1) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... iture on account of advertisement, on account of interest advances given to M/s. Ezeego, making an addition on account of sundry balances written off, sundry creditors of software development, etc., He disallowed as capital expenditure, software expenses and also disallowed depreciation of intangible assets. Adjustment was made under section 92CA(3) of the Act. He assessed income at Rs. 6,10,77,830. 3. Aggrieved, assessee carried the matter in appeal. The first appellate authority granted part relief. On the issues where the first appellate authority has granted part relief, the Revenue has filed appeal and on the issues where the CIT(A), confirmed the Order of the Assessing Officer, the assessee has filed an appeal. We take-up the issues in seriatim. 4. We have heard Mr. Rajan R. Vora along with MS. Sheetal Shah on behalf of the assessee and Shri Narendra Singh learned CIT-DR on behalf of the Revenue. On careful consideration of the facts and circumstances of the case and on perusal of papers on record and the orders of the authorities below as well as the case laws cited we hold as follows. 5. Assessee's Appeal ITA. No. 3751/Mum/2007 : Ground Nos. 1 and 2 pertains to part disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of interest on advances to associate company amounting to Rs. 33,64,187. This Bench of the Tribunal in the earlier year orders cited above, in assessee's own case on the same issue for the assessment year 2002-2003 at para 24 held as follows : 24 "On rival submissions, we find that this issue needs reconsideration. Though the assessee has taken a plea that on commercial expediency, advances were given to M/s Ezeego which is a subsidiary company of the assessee and also business sharing agreement with the assessee company. The assessee has also taken a plea that the advances were made from interest bearing funds. We are not in agreement with the assessee; as admittedly, the assessee has paid huge amount of interest on the borrowings; but at the same time, we consider it fit to restore this issue to the file of the AO for fresh adjudication to examine afresh whether there was commercial expediency for making payments/advances on behalf of M/S Ezeego as relevant evidence is not before us. Accordingly, the relevant ground Nos. 11 to 13 are allowed for statistical purpose". 7. Consistent with the view taken therein, we set aside the matter to the file of the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar issue has come up before this Bench of the Tribunal in assessee's own case for the assessment year 2002-2003 and the Bench has set aside the matter to the file of the Assessing Officer for fresh adjudication. The Tribunal at para 11 held as follows : "11 The ld CIT(A ) has observed that the TPO has wrongly calculated the weighted average period of 100 days that is enjoyed by the unrelated parties and this fact remain uncontroverted. Moreover, as per the facts on record, weighted average credit period in case of Cox & Kings UK is at 74 days, Cox & Kings, USA is at 103.5 days and Cox & Kings Japan is at 194 days. Hence, working made by the TPO at least in respect of AE, UK and AE USA is less than 12 days than unrelated AE of Germany. But so far as the AE, Japan is concerned, the assessee has allowed excess period of 74 days as the ld CIT(A) has worked out the average period at 12 days. We, therefore, of the opinion that the excess average credit period determined by the Ld. CIT(A) is correct and does not need any interference. Now, the next issue remains whether addition can be sustained to the extent worked out by the Ld. CIT(A )? Now, the fundamental question is whether the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se". (Copy of fixed asset schedule is enclosed at page No. 41 of the paper book). 8.6. It is submitted that assessee has received the valuable information in the form of customer database and other related information which was essential for assessee to carry on the business. Hence, the 'customer database' purchased by the assessee is a business or commercial rights taken over to run its business effectively and profitably. It is to be noted that 'customer database' is an intangible asset for the assessee to carry on the business. Section 32(1)(ii) of the Act defines intangible asset as:- "Know-how, patent, copyright, trademark, licenses, franchises or any other business or commercial rights of similar nature." 8.7 it is be evident from the above definition that intangible asset includes any other business or commercial rights. It is submitted that customer database is a business right acquired by the assessee to run its business effectively and profitably. Hence, in view of this, the customer database should be treated as intangible asset and depreciation under section 32(1)(ii) of the Act should be allowed to assessee. 8.8 In this regard, it is also submitted that various Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on over and above assets and liabilities). B. Raveendran Pillai 47 DTR 81 ( Ker.) ( Assessee purchased hospital with its land, building, equipments, staff, name, trademark and goodwill as a going concern). 8.11. In view of the above legal and factual submissions, we humbly requested your Honour to kindly direct the Assessing Officer to allow the depreciation as intangible asset on the customer database purchased by the assessee". 17. In our considered view the factual issues, have not been properly examined by the lower authorities. Thus, we set aside the matter to the file of the Assessing Officer for fresh adjudication in accordance with law, after considering all the factual aspects as well as the arguments advanced as recorded above on the matter, in the correct perspective. Needless to say that assessee shall be afforded adequate opportunity of being heard on the issues. 18. Last ground of the assessee's appeal is on the levy of interest under sections 234B and 234D of the Act. Levy of interest under section 234B is consequential in nature. Coming to levy of interest under section 234D the jurisdictional High Court in the case of CIT v. Bajaj Hindustan Ltd. in IT Appeal No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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