9911796707
TMI Blog2017 (7) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... n our opinion, this is a business or commercial right which gives a right to access carrying of business in European countries and it is the license or akin to license in terms of Sec.32(1)(ii) of the Act. Therefore, depreciation is allowable on the cost of the intangible assets. See Techno Shares And Stocks Ltd. [2010 (9) TMI 6 - SUPREME COURT OF INDIA]. Decide the issue in favour of the assessee. - ITA No. 528/Mds/2016 - - - Dated:- 6-2-2017 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER, AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER For The Appellant : Shri T. Banusekar, FCA For The Respondent : Shri Shiva Srinivas, JCIT, D.R ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order of the Commissioner of Income-tax(Appeals) dated 29.1.2016. 2. The assessee has raised the following grounds in this appeal: 2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction. 3. For that the Commissioner of Income Tax (Appeals) erred in upholding the disallowance of set off of mutual fund losses of Rs. 2,389,525/- against the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Kotak Mahindra Bank, Kolkata. In this regard, the assessee also received from the trust the Form 58A dated 31.12.2009 for donations of ₹ 2 crores and Form 58A dated 7.3.2010 for the balance of ₹ 50 lakhs. However, it is given to understand that a police complaint was lodged by the Trust President regarding the amounts deposited by secret donors in its bank account held with Kotak Mahindra Bank, Kolkata that these were withdrawn in huge amount by anonymous persons and no amount was received by the Trust for the utilization of its activities. The Assessing Officer observed that since the intended donations as claimed by the assessee has not reached the actual trust as confirmed by the trustee, the donation made by the assessee was not truly and genuinely incurred for the activities of the trust. Accordingly, the Assessing Officer denied relief u/s.35AC of the Act. Against this, the ase went in appeal before the CIT(Appeals), who has confirmed the action of the Assessing Officer. 5.1 Before the CIT(Appeals), the assessee filed detailed submissions before the CIT(A) on 23.09.2014, the gist of which is as follows : 1. The assessee company has made the donation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the proof of payment and the acknowledgment of the said trust of receipt of such funds. In this regard, the assessee addressed a letter to the President of the said trust for an acknowledgment of receipt of funds. 3. In response to the above, the President of the said Trust replied that the Trust had NOT received any of the above mentioned funds. 4. The assessee claims that a donation has been made to the assessee. The onus is on the assessee to prove the genuineness of the payments and the receipt of the same. 5. Additionally, it is seen for AY 2011-12 the assessee had made similar claim of donation which has not been confirmed by the recipient indicating a pattern of fraudulent claims. 6.1 Remand report of Assessing Officer dated 13.02.2015: The remand report called for is hereby submitted with comments and mentioned ground wise: 1. On the remand report called for, the banker of the assessee was asked to confirm the payments and the recipients of the alleged payments. The report forwarded by SBI, CAG branch, Chennai is forwarded for the kind perusal of this authority. 2. From the report submitted, it is seen that the bank has not confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, amount, beneficiary account name and the type of crossing. c) A copy of the above mentioned bank confirmation was submitted along with a petition in terms of Rule 46A, as it forms additional evidence. 6.4 Remand report of the Assessing Officer dated 14.10.2015 reads as under: The remand report called for is submitted as follows : 1. In view of the remand report proceedings, a letter was addressed to the Branch Manager, SBI, CAG Branch to verify the payments as claimed by the assessee. 2. Vide letter dated 19.12.2014, the Branch Manager, SBI, CAG Branch has confirmed that the payments as claimed by the assessee have been paid into the bank accounts registered under the name of Mahila Utkarsh Sansthan. A copy of the letter is enclosed for the kind perusal of this authority. 3. From the above, it has been confirmed by the banker of the assessee that funds have been transferred through proper banking channels to the intended party. 4. A decision in the case may be taken on merits and on facts of the case. 6.5 Finally, the assessee submitted that based on the detailed submissions made on 23.09.2014 and its reply to remand report dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of their intention to misappropriate in the name of the Trust. According to the CIT(Appeals), as per the statement of the President of the aforesaid Trust that the Trust s bank account was used to divert the money for the purpose of claiming income tax deduction by fraudulent means. The CIT(Appeals) observed that in the remand report dated 18.11.2014, the AO has concluded that in A.Y. 2011-12 too, the assessee has made similar claim of donation which was not confirmed by the recipient indicating a pattern of fraudulent claims. Even in the second remand report of the AO dated 13.2.2015, it is stated that the Bank has not confirmed if the payments have been made through a/c payee cheques and it is also not clear as to who the actual beneficiary of the impugned funds donated is and whether the Trust a/c was opened and operated by the Trust. 7.3 The CIT(Appeals) observed that in the final remand report, the AO has merely stated that the Branch Manager, SBI C AG Branch, Chennai has confirmed that the payments, as claimed by the assessee have been paid into the bank accounts registered under the name of the aforesaid Trust. In the said letter, only the list of cheques present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid into the bank accounts registered under the name of M/s.Mahila Utkarsh Sansthan Trust as evidenced from the letter dated 19.12.2014 of Branch Manager SBI, CAG Brach. However, CIT(Appeals) placed reliance on the letter issued by President Miss Sonia Sharma that the Trustee has not received the donation from the assessee and the Trust has filed FIR with the Police Authorities against the irregularities and malpractices committed with and in the name of Trust and also complaint was lodged against the Bank Manager of Kotak Mahindera, Kolkotta. In our considered opinion, if there is a malpractice or misappropriation taken place in the Trust for which the assessee cannot be faulted and benefit u/s.35AC of the Act denied. Further, it is to be noted that similar issue came for consideration before this Tribunal in the case of M/s. Mangal Tech Park Pvt. Ltd. In ITA No.1439/Mds/2014 2084/Mds/2015 for the AY 2008-09. The Tribunal vide its order dated 17.6.2016 held as under: 9. We have considered the rival submissions on either side and also perused the material available on record. The assessee claims that a sum of ₹ 2,25,00,000/- was donated to three Trusts. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows that it has not received any donation from M/s Mangal Tech Park Pvt. Ltd. Neither, the bank statements of the Samiti shows to have received such heavy smounts from donation. 5. Smt. Sukul Hansda, the then Secretray of M/s Adivasi Mahila Vikas Samiti denied to have received any amount as donation from M/s Mangal Tech Park Pvt. Ltd. She also denied her signature on the Receipts of money (Form No.58A) which have been sent to this office by you. 6. Conclusion: Advasi Mahila Vikas Samiti, Phuldungri, P.O Ghatsila, Dist. Singhbhum, Jharkhand has not received the donations of ₹ 1 crore (Rs. 35,000 through RTGS, ₹ 30,000/- ₹ 35,000 through Drafts) as claimed by M/s Mangal Tech Park Pvt. Ltd. 10. From the above, it appears that no donation was received by Aadivasi Mahila Vikas Samidhi from the assessee-company. Apparently, these communications were not brought to the notice of the assessee. The Assessing Officer has observed in the assessment order that the outcome of the enquiry was put to Shri Balasubramanian, one of the Director of the assessee-company. However, it is not known whether the said Balasubramanian is looking after the affairs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer. 9. In view of the above binding order of the co-ordinate Bench of this Tribunal, taking a consistent view, we are inclined to remit the issue in dispute to the file of the Assessing Officer to reexamine the issue on a similar direction and also the claim of assessee has to be considered as valid, if it has transferred the funds to the Bank account opened in the name of an institution which was duly registered u/s 35AC of the Act on the said dates of transfer of funds. Further, if there is a malpractice or discrepancies in the management of the Trust Account for which the assessee cannot be responsible so as to deny the benefit u/s.35AC of the Act. This ground of the appeal is partly allowed for statistical purposes. 10. Next ground is with regard to disallowance of depreciation ₹ 1,45,35,605 on intangible assets. 11. The facts of the case are that the assessee during the year under appeal had claimed depreciation of ₹ 1,45,35,605/- on intangible asset in the nature of license obtained towards carrying on business and obtaining marketing rights in European countries. This also includes expenses related to Dossier cost and registration expenses/val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on/license as mentioned earlier be allowed as revenue expenditure incurred wholly and exclusively for the purposes of business or profession under sec.37. Further, the ld. AR, submitted that the break-up of registration expenses (country product wise details) upto the F.Y. 2009-10 will be submitted at the time of hearing. Finally, the ld. AR prayed to delete the disallowance and restore the depreciation of ₹ 1,45,35,605/- claimed by the assessee or alternatively allow the expenditure incurred during the year in consideration, towards registration/license as revenue expenditure incurred wholly and exclusively for the purposes of business or profession under sec.37 of the Act. 12. The CIT(Appeals) after considering the observation of the AO and the submissions of the assessee observed that the AO has justified in disallowing the aforesaid depreciation. According to the CIT(Appeals), the AO rebutted all the points raised by the assessee in the assessment stage. Before the CIT(Appeals), the assessee has reiterated most of the points submitted before the AO and the case laws mentioned by the assessee are not applicable to the assessee s case. The CIT(Appeals) concurred with A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
