Daily Archives: June 20, 2012

DCIT Vs M/s Coromandal Bio Tech Industries (I) Ltd [ITA No.287/Hyd/2007] Hyderabad ITAT Facts of the case The Assessee company for the AY 2001-02 and 2002-03, filed its return of income declaring loss after claiming depreciation on Ponds and Plant & Machinery business of which is discontinued long back. The Assessing Officer observed that the claim of depreciation was not proper and the assessment was reopened u/s 147. In the reassessment, the AO disallowed and added back the depreciation on ponds and plant & machinery. Similarly, for the AY 2003-04 and 2004-05, on the grounds the business of prawn and shrimp farming had been apparently discontinued, the AO held that the assets were not put to use and the assessee was not entitled to depreciation on ponds and plant & machinery.

Depreciation allowable even on assets of discontinued business – Hyderabad ITAT

Samsung India Software Operations Pvt Ltd Vs Addnl CIT [ITA No.399/Bang/2012] (Bang ITAT) Facts of the case The Assessee company, entirely held by M/s. Samsung Electronics Company Ltd (SECL), had claimed deduction under section 10A in its return of income filed for AY 2007-08. SECL being the sole owner of its branch office entered into a business transfer agreement with the assessee company on 5.9.05 for transfer of business of the branch office by way of slump sale as a going concern together with all its rights, properties and assets of the business. AO held that undertaking was not formed by the transfer to a new business of machinery or plant previously used for any purpose and that the provisions of Explanation 1 & 2 to sub-section (2) of section 80 I of the Act shall also apply for this purpose. The AO pointed out that the undertaking of the assessee was formed by transfer of same plant & machinery which were earlier used by branch office.

10A Exemption is qua an undertaking and not qua an assessee – Bangalore ITAT

Pentamedia Graphics Ltd.v DCIT [ITA Nos 1780 (MDS.) OF 2009, 1733, 1768 and 1887 (MDS) OF 2010] (Chennai ITAT) Facts of the case Assessee is engaged in the business of multimedia computer graphics and animation. Assessee’s software and training division was hived off to its sister concern M/s. Pentafour Communications Ltd. The consideration for the transaction was Rs. 894.21 crores. No amount was attributed towards goodwill. But amounts were attributed towards non compete fee, sale of brand name, sale of IPR, etc. In its computation of income, the assessee has not offered any capital gains towards transfer of goodwill. The accounts of the sister concern M/s. Pentafour Technologies Ltd. reflected Rs. 626,08,80,282 under the head ‘fixed assets’ towards goodwill on acquisition of the software division.

Non-compete fees to a sister concern is a colorable device for ‘Goodwill’ to evade tax ...

DCIT v TVS Electronics Ltd IT Appeal NO. 811 (MDS.) of 2010 (Chennai ITAT) Facts of the case The assessee made payment to M/s Rosewell Group Services Ltd. based in Mauritius for market survey, qualitative consumer measurement, retail store site information, etc. without deducting tax at source under section 195 of the Act The AO concluded that the payment made was nothing but fees for technical services relying on Explanation 2 to Section 9(1)(vii) of the Act. 

In the absence of FTS clause in India-Mauritius DTAA, FTS under the Act to be ...