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TMI Blog2012 (12) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... of ld. CIT(A) dated 16/01/2012 for A.Y. 2007-08. 2. ITA No. 2459/D/2011: The assessee is a 100% subsidiary of M/s Osram GMBH, Germany. During the year, under consideration, the company was engaged in manufacturing and trading of lamps and providing designing services for software and electronic ballasts. The company was also engaged in manufacturing and trading of lamps which includes General Lighting Lamps (GLS), Fluorescent Tube Lights (FTL), Energy Saving Compact Fluorescent Lamps (CFL), Automotive Lamps, Decorative and Photo-Optic Lamps and Ballasts. The assessee had filed return declaring loss of Rs. 94,35,45,902/-. 3. The Assessing Officer determined the loss at Rs. 88,76,14,210/- after making following additions: - 1) deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in assessee's own case for assessment years 2002-03, 2003-04 & 2004-05, directed the AO to allow depreciation on goodwill during the current year. 8. Ld. DR relied on the order of AO. 9. Ld. Counsel submitted as under: - 1. "The Hon'ble Tribunal, for A.Ys. 2002-03 to 2004-05 (pp. 1-16/PB) vide para 11.1 (page-10/PB). The Department has accepted this order in respect of the A.Ys. 2002-03 to 2004-05 and also the valuation of various intangible assets. 2. The issue is no longer res-integra. The Hon'ble Supreme Court recently in CIT vs. Smifs Securities Ltd. (2012) 75 DTR 417 (SC)has held that the depreciation on goodwill is admissible as it falls under the expression "any other business or commercial rights of similar nature" in Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled therefore, in line with the findings of earlier year this year's disallowance is to be recomputed. While giving effect to this order, the AO will examine the quantification part having regard to the findings for earlier years. 12. In the result, this ground is dismissed in terms of above observations. 13. Brief facts, apropos ground no. 2 are that the assessee company was required to furnish the details of raw and packing material expenses and whether any TDS was deducted or not on these expenses. The assessee furnished following details: - Amount (in Rs.) Raw Material consumed 33,04,12,895 Packing material consumed at factory 5,17,62,496 Packing material consumed at Branches 6,89,800 Stickering Charges 1,74,020 Total 38,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A), while partly allowing the assessee's appeal, deleted the aforementioned disallowance for the following reasons: - i. Packing material expenses had been incurred for purchase of packing material some of which was printed and some of which was plain. This was primarily in pursuance to contract of sale; ii. No disallowance was warranted out of the expenses incurred for the purchase of plain packing material; iii. No TDS was required to be made in respect of sticker charges since TDS had been made in A.Y. 2006-07; iv. The assessee's plea that packing material aggregating to Rs. 4,06,23,057/- on which printing work was done by the supplier of the material was duly supported from the bills. As such no TDS was required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of printed materials purchased by assessee was that suppliers had supplied printed material. The AO's contention is that since packing material on which printing had been done was as per the specifications given by the assesee company, therefore, it was a works contract involving job work. In this regard, he has relied on Circular No. 715 dated 08/08/1995, the question no. 15 and answer thereto of which reads as under: - "Whether section 194C applied in respect of supply and printing material as per prescribed specifications? Ans. Yes." Ld. CIT(A) has held this to be contract of sale relying on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Deputy Chief Accounts Officer Mark Fed (supra). Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently, he rightly held that the AO was not justified in making the impugned disallowance u/s 40(a)(ia). The Department has not brought on record any material to controvert the factual position in this regard. We, accordingly, confirm the order of ld. CIT(A). 18. In the result, the Department's appeal for A.Y. 2005-06 is dismissed. 19. ITA No. 2460: - The Department has taken following grounds of appeal: - "1. On the facts and in the circumstances of the case, the ld. Commissioner of Income Tax (Appeals) has erred in facts and in law in deleting the disallowance of Rs. 24,79,033/- made by the AO on account of depreciation on goodwill when the AO has rightly made this disallowance by observing that the goodwill is not a depreciab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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