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TMI Blog2019 (8) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... has proposed the following substantial questions of law for the consideration of this Court : "[A] Whether the Appellate Tribunal has erred in law and on facts in upholding the order of the CIT(A) deleting the addition of Rs. 1,68,48,562/- made on account of disallowance of depreciation on noncompete fees ? [B] Whether the Appellate Tribunal has erred in law and on facts in upholding the order of the CIT(A) deleting the addition made on account of disallowance u/s.40(a)(ia) of the Act for non deduction of tax on commission payable to foreign agents of Rs. 1,38,19,875/- ?" 3. The two questions as proposed by the Revenue referred to above, are no longer res integra in view of the decision of this Court in the case of Principal Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible asset on which the depreciation can be claimed. It was observed that the right of such membership included right of nomination as a license which was one of the items which would fall under section 32(1)(ii). The right to participate in the market had an economic and money value. The expenses incurred by the assessee which satisfied the test of being a license or any other business or commercial right of similar nature. 9. In case of Areva T & D India Ltd (supra) Division Bench of Delhi High Court had an occasion to interpret the meaning of intangible assets in context of section 32(1)(ii) of the Act. It was observed that on perusal of the meaning of the categories of specific intangible assets referred to in section 32(1)(ii) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature" used in Explanation 3 to subsection 32(1)(ii) is wide enough to include the present situation." 3.2 As regards the second question proposed by the Revenue referred to above, this Court observed as under : "2. Question A pertains to disallowance made by the Assessing Officer under section 40(a)(ia) of the Income Tax Act, 1961 ['the Act' for short] for the failure of the assessee to deduct tax at source on exemption paid to foreign agents. This issue has been considered in Tax Appeal No. 1232 of 2018 in following manner: "1. The issue arises in relation to assessment year 2011-12. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had paid payment of Rs. 1.20 crore (rounded off) to no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 3. The assessee carried the matter in appeal before the Tribunal. The Tribunal allowed the appeal on the ground that no part of the income had arisen or accrued in India. The payee was not liable to pay tax at such income. Requirement of TDS therefore would not arise. 4. As is well known, section 195 of the Act imposes requirement of deduction of tax at source on any person responsible for paying to a nonresident any sum chargeable under the provisions of the Act. The prime requirement therefore for applicability of the section is that the payment to the non-resident should be a sum chargeable under the provisions of the Act. In other words, the payment is not an income which is chargeable to tax in India. Requirement of deductin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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