9911796707
TMI Blog2011 (4) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... r is appreciable, at the same time, the manner of arriving at this conclusion needs to be deprecated - In this view of the situation, as no defect is pointed out in such observation of CIT(A) that all the points were considered by Earnest & Young in their report for which the another weightage was given by the AO - Assessing Officer if not satisfied could not have substituted his views by discarding the report of M/s.Ernst and Young Pvt. Ltd. without calling for the report of another expert - The issues involved have wide ramifications - Appeals are disposed of by way of remand X X X X Extracts X X X X X X X X Extracts X X X X ..... . This segregation of non-compete fees in the ratio of 45% (manufacturing) and 55% (marketing) was based on the report of M/s.Ernst and Young Pvt. Ltd. dated 15th July, 1999 filed by the assessees along with the returns. According to Assessing Officer there were various discrepancies in the aforesaid report as it gave 55% weightage to marketing and 45% toward non-compete fees (manufacturing). In arriving at this conclusion, the Assessing Officer referred to some literature of economics on the subject and specifically noted that the amounts of manufacturing was not properly projected in the report of the M/s.Ernst and Young Pvt. Ltd. He specifically noted few points relating to manufacturing process missing in the said report. Persuaded by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . covered all the items which were alleged to be missing by the Assessing Officer. It was also submitted that in any case, this was nowhere submitted by the Revenue before the CIT(A) and also the Tribunal and thus this question could not be raised at this stage before this Court. 6. We may note that the Assessing Officer while arriving at his conclusion regarding the weightage of 38% to the component of non-competing (marketing) and 62% to that of manufacturing he referred to good and valuable literature on the subject. While the work done by the Assessing Officer is appreciable, at the same time, the manner of arriving at this conclusion needs to be deprecated. There is no doubt that M/s.Ernst and Young Pvt. Ltd. is a Chartered Accountan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in reference to data and professional experience in such matters to give a finding on his own. I have gone through the report of Ernst & Young and find that the contentions of the appellant that all the factors alleged by the AO to have been missed by Ernst & Young were indeed considered by them have sufficient force in them therefore, I am inclined the delete this changes made by the AO in the ratios and direct him to accept the ratios adopted by the appellant on the basis of the report of Ernst & Young Pvt. Ltd., both on law and merit," 8. The Tribunal also on its part did not do any exercise and simply proceeded to accept the aforementioned observation of CIT(A) in the manner as noted hereunder: "7. We have carefully considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, assessee claimed deduction under Section 37 of the Act based on the allocation of expenses as suggested by M/s.Price Waterhousecooper. The same was not acceptable to the Assessing Officer. The Supreme Court observed that allocation of expenses in such case is a complex exercise and since the assessee has relied on a formula suggested of M/s. Price Waterhousecooper, the Department may engage an expert in such matters. If the formula suggested by that expert was proper and acceptable, that would bring an end to the controversy failing which the suggestion of that expert will be examined by the Court. 10. Having seen the order of both the CIT(A) and also the Tribunal, we are also of the view that the Assessing Officer if not satisfied cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
