D.B. Corp.Ltd., Ahmedabad V. The Income tax Officer,Ward-1(4), Ahmedabad

ITA 1113/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80313 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV; V K SINGH
• Keywords: Business income; Depreciation; Business expenditure; Retrospective amendment; Question of law; Bad and doubtful debts; Capital receipt; Onus to prove
• Section: 234B; 115JB; 37(1); 32

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , ! ' #$ #$ #$ #$ %, ' BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER $./ I.T.A. NO.1113/AHD/2011 ( ( )( ( )( ( )( ( )( / / / / ASSESSMENT YEAR : 2007-08) D.B. CORPORATION LTD. 280, SARKHEJ GANDHINAGAR HIGHWAY NR.YMCA CLUB MAKARBA, AHMEDABAD / VS. THE ITO WARD-1(4) AHMEDABAD '* ! $./+, $./ PAN/GIR NO. : AACCM 5772 G ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI DHINAL SHAH, A.R. ./*- 1 0 / RESPONDENT BY : SHRI O.P. VAISHNAV, CIT-DR AND SHRI V.K.SINGH, SR.DR 2 1 ! / / / / DATE OF HEARING 07/08/2014 34) 1 ! / DATE OF PRONOUNCEMENT 05/09/2014 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VI, AHMEDABA D (CIT(A) IN SHORT) DATED 04/02/2011 PERTAINING TO ASSESSMENT Y EAR (AY) 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AGGRIE VED BY THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- VI, AHMEDABAD [HEREINAFTER REFERRED TO AS CIT(A)], UNDER SECTIO N 250 OF THE INCOME- TAX ACT, 1961 (ACT), D.B. CORP. LTD. (HEREINAFTER REFERRED TO AS THE APPELLANT) RESPECTFULLY SUBMITS AS UNDER: ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 2 - GROUND NO.1 (A) THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE DISAL LOWANCE OF RS.5,758,019 (ERRONEOUSLY TAKEN BY LEARNED CIT(A) A S RS.5,870,519) MADE BY THE ASSESSING OFFICER IN RELA TION TO DEPRECIATION CLAIMED BY THE APPELLANT ON GOODWILL O F RS.25,609,516. (B) THE LEARNED CIT(A) HAS ERRED IN CONSIDERING THE TRA NSACTION OF PURCHASE OF BUSINESS RIGHTS AS SHAM TRANSACTION DIS REGARDING THE FACTS AND THE COMMERCIAL RATIONALE OF THE TRANSACTI ON. GROUND NO.2 WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) HAS ERRED BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, IN NOT ALLOWING THE CONSIDERATION OF RS.2,00,00,000 PAID TO RAJKUMAR KO NERU IT ENBALED SERVICES PRIVATE LIMITED (RKIT) AS A REVENUE EXPE NDITURE DEDUCTIBLE UNDER SECTION 37(1) OF THE INCOME-TAX ACT, 1961. GROUND NO.3 THE LEARNED CIT(A) HAS ERRED IN COMPUTING INTEREST UNDER SECTION 234B AND 234C OF THE ACT AFTER CONSIDERING THE ABOV E ADDITIONS/DISALLOWANCE. GROUND NO.4 (A) THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATI NG ON THE GROUND IN RELATION TO LEVY OF INTEREST UNDER SECTION 234B OF THE ACT ON ADDITIONS MADE DUE TO RETROSPECTIVE AMENDMENTS IN THE ACT. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEAREND CIT(A) HAS ERRED IN LEVYING INTEREST UNDER SECTION 234B OF THE ACT WITHOUT APPRECIATING THE FACTS THAT THE ADDITIONS OF RS.68,479,558 FOR PROVISION OF DOU BTFUL DEBTS, RS.2,272,803 FOR PROVISION FOR DOUBTFUL ADVANCES AN D RS.21,637,588 FOR DEFERRED TAX LIABILITY MADE TO TH E BOOK PROFITS UNDER SECTION 115JB OF THE ACT ARE IN RESPECT OF TH E RETROSPECTIVE AMENDMENT IN THE PROVISIONS OF SECTION 115JB OF THE ACT; ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 3 - THE APPELLANT COULD NOT HAVE FORESEEN SUCH RETROSP ECTIVE AMENDMENT AT THE TIME OF PAYMENT OF ADVANCE TAX; THE APPELLANT SUBMITS THAT EACH OF THE ABOVE GROUND S IS INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, SUBSTITUTE OR AMEND THE ABOVE GROUNDS, AT ANY TIME BEFORE OR AT T HE TIME OF HEARING OF THE APPEAL, SO AS TO ENABLE THE BENCH TO DECIDE THIS APPEAL ACCORDING TO LAW. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 29.12.2009, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCE OF DEPRECIATION ON GOODWILL AND DISALL OWANCE OF DEPRECIATION OTHER THAN GOODWILL AND ALSO WHILE COM PUTING THE BOOK PROFIT MADE ADDITIONS IN RESPECT OF PROVISION FOR D OUBTFUL DEBTS AND FOR DOUBTFUL ADVANCES. SIMILARLY, THE ADDITION IN RE SPECT OF PROVISION FOR LEAVE ENCASHMENT WAS ALSO MADE FOR COMPUTING THE BO OK PROFIT. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CI T(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPE AL. WHILE PARTLY ALLOWING THE CLAIM OF THE ASSESSEE BY THE LD.CIT(A) CONFIRMED THE ADDITION ON ACCOUNT OF THE GOODWILL AND REGARDING T HE ADDITION OF LEAVE ENCASHMENT OF RS.29,71,752/-, WHILE COMPUTING THE B OOK PROFIT, THE LD.CIT(A) DELETED THE ADDITION. FEELING AGGRIEVED BY THE ORDER OF LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TR IBUNAL. 3. FIRST GROUND IS AGAINST THE CONFIRMATION OF DISA LLOWANCE AMOUNTING TO RS.57,58,019/- IN RESPECT OF THE DEPRECIATION CL AIMED BY THE APPELLANT ON GOODWILL OF RS.2,56,09,516/-. THE LD.COUNSEL FO R THE ASSESSEE ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 4 - REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD.CIT(A) AND SUBMITTED THAT THE LD.CIT(A) GROSSLY ERRED IN CONSI DERING THE TRANSACTION OF PURCHASE OF BUSINESS RIGHTS AS SHAM TRANSACTION DISREGARDING THE FACTS AND THE COMMERCIAL RATIONALE OF THE TRANSACTION. T HE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO MADE DISALLOWANCE WI THOUT APPRECIATING THE FACT IN RIGHT PERSPECTIVE. HE PLACED RELIANCE ON THE JUDGEMENT OF HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT V S. SMIFS SECURITIES LTD. REPORTED AT 348 ITR 302 (SC). HE SUBMITTED THAT THIS DECISION OF THE HONBLE SUPREME COURT HAS BEEN FOLLOWED BY THE COORDINATE BENCH OF THIS TRIBUNAL (ITAT D BENCH AHMEDABAD) IN THE CASE OF M/S.PUNIT ENGINEERING WORKS VS. THE ITO IN ITA NO.492/AHD/201 1 FOR AY 2007- 08 VIDE ORDER DATED 27/06/2014. 3.1. THE LD.COUNSEL FOR THE ASSESSEE PLACED RELIANC E ON THE FOLLOWING CASE-LAWS:- 1.CIT VS. SMIFS SECURITIES LTD.(2012) 24 TAXMANN.CO M 222(SC) 2. CIT VS. BIRLA GLOBAL ASSET FINANCE CO.LTD. (2014 ) 41 TAXMANN.COM 262 (BOMBAY HIGH COURT) 3. CIT VS. MANIPAL UNIVERSAL LEARNING (P) LTD. (201 3) 34 TAXMANN.COM 9 (KARNATAKA HIGH COURT) 4. AREVA T & D INDIA LTD. VS. DCIT (2012) 20 TAXMAN N.COM 29 (DELHI HIGH COURT) 5. B.RAVEENDRAN PILLAI VS. CIT (2010) 194 TAXMAN 4 77 (KERALA HIGH COURT) 6. CYBER INDIA ONLINE LTD. VS. ACIT (2014) 42 TAXMANN. COM 108 (DELHI ITAT) 7. INDIA CAPITAL MARKETS (P) LTD. VS. DCIT (2013 ) 29 TAXMANN.COM 304 (MUMBAI ITAT) 8. RFCL LTD. VS. DCIT (ITA NO.293 & 294/CHD/2012 ) (CHANDIGARH ITAT) 9. DCIT VS. WORLDWIDE MEDIA (P) LTD. (2014) 43 TAXMANN .COM 18 (MUMBAI ITAT) 10. KOTAK FOREX BROKERAGE LTD. VS. AICT (33 SOT 237) (M UMBAI ITAT) ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 5 - 11. A.P. PAPER MILLS LTD. VS. ACIT (128 TTJ 596) (HYDERABAD ITAT) 12. SKYLINE CATERERS (P) LTD. VS. ITO (20 SOT 266) (MUM BAI ITAT) 13. ADDL.CIT VS. J&SP LTD. (149 ITR 581) (DELHI HIGH CO URT 14. CIT VS. ASHOK LEYLAND LTD. (86 ITR 549) (SC) 15. CIT VS. MOTOR INDUSTRIES CO.LTD. (1997) 93 TAXMAN 1 57 (KARNATAKA HIGH COURT) 16. SUN PETROCHEMICALS PVT.LTD. VS. ITO (ITA NO.1010/AH D/2009) (AHMEDABAD ITAT) 17. CIT VS. ABDUL WAHID AND CO. (APPEAL NO.396 AND 398 OF 2010) (CHENNAI HIGH COURT) 18. CIT VS. REVATHI EQUIPMENT LTD. (298 ITR 67) (MADRAS HIGH COURT) 3.2. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE DEPRECIATION ON GOODWILL IS ALLOWED BY THE AO IN SU BSEQUENT YEARS. HE DREW OUR ATTENTION TO PAPER-BOOK AT PAGE NOS.128 TO 148. 3.3. ON THE CONTRARY, LD.SR.CIT-DR, SHRI O.P. VAISH NAV VEHEMENTLY ARGUED THAT THIS IS NOT THE CASE WHERE THE ASSESSEE ACQUIRED THE GOODWILL. IN FACT, THE ASSESSEE HAD PURCHASED THE ENTIRE BUSI NESS, THEREFORE THERE IS NO QUESTION OF GOODWILL. HE STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT A PLAIN READI NG OF THE SECTION 32 OF THE ACT MAKES IT CLEAR THAT THE GOODWILL IS NOT MEN TIONED IN THE PROVISION, BUT IT HAS BEEN MENTIONED ANY OTHER BUSINESS OR COM MERCIAL RIGHTS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS. HE SUBM ITTED THAT ALTHOUGH THE DEPRECIATION IS ALLOWABLE ON INTANGIBLE ASSETS, SUC H INTANGIBLE ASSETS SHOULD BE SIMILAR TO KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES, ETC. HE SUBMITTED THAT THE ASSESSEE HA S NOT PLACED ANYTHING ON RECORD IN SUPPORT OF THE CLAIM THAT SO-CALLED G OODWILL IS ON THE INTANGIBLE ASSETS SIMILAR TO THAT OF KNOW-HOW, PAT ENTS, COPYRIGHTS, ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 6 - TRADEMARKS, LICENCES, FRANCHISES, ETC. HE SUBMITTE D THAT THE JUDGEMENT RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE IN T HE CASE OF CIT VS. SMIFS SECURITIES LTD. (SUPRA) IS NOT APPLICABLE ON THE FA CTS OF THE PRESENT CASE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON GOODWILL ON THREE COMPONENTS; I.E. GOODWILL ON INDIANINFO.COM LIMITED MERGER OF INTERNET DIVISION, NEW ERA PUBLICATIONS PVT.LTD. AND TERMINA TION OF OVERSEAS RIGHT AGREEMENT WITH RKIT LTD. AND THE DETAILS OF T HE SAME ARE AS UNDER:- 1. INDIANFO.COM LIMITED MERGER OF INTERNET DIVI SION PARTICULARS AMT IN RS. REMARKS STATEMENT OF ASSETS FIXED ASSETS TRADE RECEIVABLES DEPOSITS OTHER ADVANCES 750,000 1,022,963 151,495 95,078 TOTAL ASSETS 2,019,536 STATEMENT OF LIABILITIES TRADE PAYABLES PROVISIONS 321,879 2,052,044 TOTAL LIABILITIES 2,373,923 NET DIFFERENCE ADDITIONAL SHARES ISSUED 354,387 100,250 AMOUNT SHOWN AS GOODWILL 454,637 EXCESS OF LIABILITIES OVER ASSETS IS ACCOUNTED FOR AS GOODWILL FOR RS.4,54,637/- 2. NEW ERA PUBLICATIONS PRIVATE LIMTIED PARTICULARS AMT IN RS. REMARKS STATEMENT OF ASSETS FIXED ASSETS INVENTORIES DEBTORS 255,950 72,313 8,845,148 ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 7 - CASH AND BANK LOANS AND ADVANCES MISC EXP. 1,551,500 880,639 2,929,755 TOTAL ASSETS 14,535,305 STATEMENT OF LIABILITIES SUNDRY CREDITORS ADVANCES ADVANCE FROM CUSTOMER AGENCY SECURITY DEPOSIT PROVISION 11,517,330 186,359 254,850 864,041 3,782,101 TOTAL LIABILITIES 16,604,681 NET DIFFERENCE ADDITIONAL CONSIDERATION 2,069,376 100,000 TOTAL 2,169,376 EXCESS OF LIABILITIES OVER ASSETS IS ACCOUNTED FOR AS GOODWILL. ADD:- MISC EXP.TAKEN OVER FROM NEW ERA NEW EX.INCURRED IN MAR- 09 2,929,755 55,749 AMOUNT SHOWN AS GOODWILL 5,154,880 PRE-OPERATIVE AND PRELIMINARY EXP.UNDER THE HEAD MISCELLANEOUS EXPENDITURE AS SHOWN IN THE BALANCE SHEET ARE ALSO OF INTANGIBLE NATURE AND CONSIDERED AS GOODWILL OF RS.51,54,880/- 3. TERMINATION OF OVERSEAS RIGHT AGREEMENT WITH RK IT LIMITED PART B AMT IN RS. REMARKS TERMINATION OF OVER SEAS RIGHTS AGREEMENT 20,000,000 THE PAYMENT OF RS.2,00,00,000/- IS ON ACCOUNT OF COMMERCIAL RIGHTS AND THE SAME IS DEFINED AS INTANGIBLE ASSETS HENCE DEPRECIATION IS ALLOWABLE U/S.32 OF THE INCOME TAX ACT. 4.1. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE IN PARAS 4.8 TO 4.10 OF HIS ORDER, WHICH ARE IN THE FOLLOWING TERMS:- 4.8. IN THE FACTS OF THE PRESENT CASE, AS FAR AS C REATION OF GOODWILL OF RS.4,54,637/- ON THE TRANSACTION WITH INDIA INFOCOM M LTD AND RS.51,54,880/- ON CREATION OF GOODWILL ON THE TRANS ACTION WITH NEW ERA ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 8 - PUBLICATIONS IS CONCERNED, IT IS SEEN THAT THE ASSE SSEE HAS PAID EXCESS AMOUNT OVER AND ABOVE THE NET ASSETS, WHICH HAS BEE N CLAIMED AS GOODWILL. IN FACT, IN REALITY, THE LOSSES SUFFERED BY THESE CONCERNS HAVE BEEN COMPENSATED BY THE ASSESSEE COMPANY WHICH HAS BEEN SHOWN AS GOODWILL ON WHICH DEPRECIATION HAS BEEN CLAIMED. TH IS CLEARLY IS BEYOND THE MEANING OF THE ASSETS CONTEMPLATED BY TH E SECTION ON WHICH DEPRECIATION IS ALLOWABLE. 4.9 AS FAR AS THE TRANSACTION OF PURCHASE OF COMMER CIAL RIGHTS FROM RAJKUMAR KONERU IT ENABLED SERVICES PRIVATE LIMITED (RKIT LIMITED) IS CONCERNED, THE AGREEMENT BETWEEN THE A SSESSEE COMPANY (EARSTWHILE WRITERS AND PUBLISHERS LTD) AND RKIT WA S SHOWN TO BE ENTERED ON 11.08.2006 WHEREBY THE OVERSEAS RIGHTS H AVE BEEN SHOWN TO BE ACQUIRED FROM RKIT FOR A CONSIDERATION OF RS.2,0 0,00,000/- FROM THE EFFECTIVE DATE OF DEMERGER OF INTEREST DIVISION OF M/S INDIA INFOCOMM LTD. IT IS ALSO SEEN THAT THE AGREEMENT BETWEEN M/S . INDIA INFOCOMM LTD AND M/S RKIT LTD HAS BEEN SHOWN TO ENTERED ON 01.04 .2006, WHEREIN THE EXCLUSIVE RIGHT TO USE THE BRAND INDIAINFO.COM FOR CARRYING ON ITS INTERNAL PORTAL BUSINESS IN ALL TERRITORIES OTHER T HAN INDIA FOR A CONSIDERATION OF RS.10,00,000/- PER ANNUM FOR A PER IOD OF 10 YEARS WHICH COULD BE EXTENDED FOR FURTHER 5 YEARS HAS BEE N GRANTED TO RKIT BY IIL. IT IS SEEN THAT THE REGISTERED OFFICE OF BO TH IIL AND RKIT IS SAME AT 100, MONEY TERRACE, 3 RD FLOOR, K.H. ROAD, BANGALORE 560027. MOREOVER, IT IS ALSO SEEN THAT (AS CERTIFIED BY THE AUDITORS) NO INCOME HAS BEEN RECOGNIZED BY IIL IN ITS BOOKS ON ACCOUNT OF OVERSEAS RIGHT AGREEMENT BETWEEN RKIT AND IIL EITHER IN FINANCIAL YEAR 2006-07 OR IN ANY SUBSEQUENT YEAR, WHICH SHOULD HAVE BEEN T AKEN INTO ACCOUNT FROM 01.04.2006 TO THE DATE OF TRANSFER (IF ANY) OF SUCH RIGHTS TO THE ASSESSEE. THE ENTIRE GAMUT OF TRANSACTIONS CLEARLY SHOW THAT THERE WAS ACTUALLY NO SUCH COMMERCIAL RIGHTS, WHICH HAS BEEN SHOWN TO BE CREATED JUST TO CLAIM DEPRECIATION. IN ANY CASE, TH E PAYMENT COULD ONLY BE TOWARDS THE CONSIDERATION FOR TRANSFER OF INTERE ST DIVISION TO THE ASSESSEE FROM IIL, WHICH AGAIN WOULD REPRESENT EXCE SS CONSIDERATION PAID OVER AND ABOVE THE NET ASSETS ACQUIRED, WHICH DOES NOT RESULT IN CREATION OF ANY ASSET AS CONTEMPLATED BY SECTION 32 ON WHICH DEPRECIATION COULD BE ALLOWED (AS ELABORATELY DISCU SSED ABOVE). THUS, IT IS HELD THAT THERE HAS BEEN NO TRANSFER OF ANY COMM ERCIAL RIGHTS AS CLAIMED BY THE ASSESSEE ON WHOM DEPRECIATION COULD BE ALLOWED. ACCORDINGLY, THE CLAIM ON DEPRECIATION ON COMMERCIA L RIGHTS IS DISALLOWED. ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 9 - 4.10 ACCORDINGLY, THE CLAIM OF DEPRECIATION OF GOOD WILL AND COMMERCIAL RIGHTS AMOUNTING TO RS.58,70,719/- IS DI SALLOWED. PENALTY U/S 271(1)(C) IS SEPARATELY INITIATED FOR FURNISHIN G INACCURATE PARTICULARS OF INCOME. (ADDITION RS.58,70,519/-) 4.2. HOWEVER, THE LD.CIT(A) HAS CONFIRMED THE ADDIT ION BY OBSERVING AS UNDER: 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE; ASSE SSMENT ORDER AND APPELLANTS SUBMISSION. APPELLANT CLAIMED DEPRECIA TION ON THREE TRANSACTIONS AS UNDER:- 1. CREATION OF GOODWILL OF RS.454637 ON ACCOUNT OF SCH EME OF MERGER OF A DIVISION OF INDIA INFOCOM LTD. 2. CREATION OF GOODWILL RS.5154880 ON ACCOUNT OF MERGE R TRANSACTION WITH NEW ERA PUBLICATIONS. 3. PAYMENT OF RS.2 CORES OF RKIT FOR TERMINATION OF AG REEMENT BY THE MERGED ENTITY OF INDIA INFOCOM LTD. DEPRECIATION ON THESE ITEMS WAS CLAIMED BY THE APPE LLANT ON THE GROUND THAT IT HAS ACQUIRED INTANGIBLE ASSETS ON WHICH DEP RECIATION IS PERMISSIBLE. AS FAR AS FIRST TWO ITEMS ARE CONCERN ED, THESE ARE DIRECTLY COVERED BY EXPLANATION 7A TO SECTION 43(1). THIS S UB-SECTION DEFINES ACTUAL COST FOR THE PURPOSE OF CLAIM OF DEPRECIATIO N. SIMILARLY SECTION 43(6) DEFINES WDV AND AS PER EXPLANATION 2 B TO THE SECTION, THE WDV OF BLOCK OF ASSET IN THE CASE OF RESULTING COMPANY WILL BE THE WDV OF ASSETS TRANSFERRED OF THE DEMERGED COMPANY IMMEDIAT ELY BEFORE THE DEMERGER. SINCE FIRST TWO INTANGIBLE ASSETS WERE C REATED BY WAY OF SCHEME OF DEMERGER AND ISSUE OF SHARES OF THE RESUL TING COMPANY TO THE DEMERGED COMPANY, THE ACTUAL COST WILL BE SAME AS I T WAS IN THE CASE OF DEMERGED COMPANY. IN THESE CASES THE WDV OF THE AS SETS ACQUIRED WILL ALSO BE SAME AS PER EXPLANATION 2B TO SECTION 43(6) OF IT ACT. IN VIEW OF THIS, ANY EXCESS CREDITED TO GOODWILL ACCOUNT IS OVER AND ABOVE THE ACTUAL COST AND WDV DEFINED IN THESE EXPLANATIONS A ND THE SAME HAS TO BE IGNORED FOR THE PURPOSE OF CLAIM OF DEPRECIATION UNDER SECTION 32. THE DEPRECIATION IS ALLOWABLE ON THE WDV OF BLOCK O F ASSET AND SUCH WDV IS DEFINED IN SECTION 43(6) OF IT ACT. THEREFO RE EVEN IF IT IS HELD THAT APPELLANT IS ELIGIBLE FOR DEPRECIATION ON GOOD WILL, THE SAME WILL NOT FORM PART OF WDV ON WHICH DEPRECIATION CAN BE CLAIM ED. CONSIDERING THIS APPELLANTS CLAIM OF DEPRECIATION ON GOODWILL IN RESPECT OF FIRST TWO ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 10 - ITEM IS NOT CORRECT. ACCORDINGLY IT IS HELD THAT A PPELLANT IS NOT ENTITLED TO CLAIM DEPRECIATION ON GOODWILL CREATED ON ACCOUN T OF SCHEME OF DEMERGER. EVEN OTHERWISE THE CLAIM WILL NOT BE ALLOWABLE SINC E GOODWILL IS NOT THE INTANGIBLE ASSET IN THE NATURE OF ASSETS MENTIONED IN THE SECTION. IN THE DECISIONS RELIED UPON BY THE APPELLANT, ASSESSEE WE RE GETTING RIGHTS OF BUSINESS IN THE NAME OF GOODWILL. BUT IN THE APPEL LANTS CASE NO SUCH RIGHTS WERE ACQUIRED BY WAY OF GOODWILL. THEREFORE THE APPELLANTS CLAIM OF DEPRECIATION ON GOODWILL CREATE ON DEMERGE R IS NOT TENABLE. DEPRECIATION DISALLOWED BY THE ASSESSING OFFICER ON FIRST TWO ITEMS IS THEREFORE CONFIRMED. AS REGARDS CLAIM OF DEPRECIATION ON PAYMENT MADE T O RKIT, ASSESSING OFFICER FOUND THAT THIS TRANSACTION IS NO T GENUINE. AFTER CONSIDERING THE RELEVANT DOCUMENTS AND APPELLANTS SUBMISSION, IM ALSO OF THE VIEW THAT THIS TRANSACTION INVOLVING PA YMENT OF RS.2 CRORES IS NOT A GENUINE BUSINESS TRANSACTION. FOLLOWING POIN T STRENGTHEN THIS VIEW- 1. BOTH THE COMPANIES I.E. INDIA INFOCOM LTD. AND RK I T HAVE THE COMMON ADDRESS IN BANGALORE AND ACCORDINGLY IT IS CLEAR THAT BOTH THE ENTITIES ARE LINKED WITH EACH OTHER. THEREFORE ANY AGREEMENT BETWEEN THESE TWO NEED TO HAVE INDEPE NDENT CONTEMPORARY EVIDENCE. 2. THE ASSIGNMENT AGREEMENT IS CLAIMED TO BE DATED 1-0 4-2006 BUT IT IS NOT ON ANY STAMP PAPER. NO PAYMENT IN TE RMS OF THIS AGREEMENT WAS EFFECTED PRIOR TO THE TERMINATION AGR EEMENT DATED 11-08-2006. THIS SHOWS THAT THIS AGREEMENT I S NOT SUPPORTED BY ANY CONTEMPORARY EVIDENCE. 3. AS AGAINST THE ASSIGNMENT AGREEMENT, THE TERMINATIO N AGREEMENT IS ON THE STAMP PAPER OF RS.100 WHICH MEA NS THE AGREEMENT IS SUPPORTED BY INDEPENDENT EVIDENCE. HO WEVER, THIS AGREEMENT IS SIGNED IN MUMBAI ON THE STAMP PAP ER PURCHASED IN MUMBAI. SURPRISINGLY NEITHER APPELLAN T NOR RK IT HAVE ANY OFFICE IN MUMBAI. THIS SHOWS THAT T HIS AGREEMENT IS PART OF DEMERGER/MERGER SCHEME HANDLED BY THE INVESTMENT BANKER FROM MUMBAI. 4. THE APPOINTED DATE OF DEMERGER SCHEME IS SEPTEMBER 1 2006 BY THE AGREEMENT DATED 11.06.2007. THIS AGREEMENT WAS APPROVED BY HONORABLE GUJARAT HIGH COURT ON THIS DA TE. THIS MEANS NEGOTIATIONS AND DILIGENCE FOR THE SCHEM E OF ARRANGEMENT STARTED MUCH IN ADVANCE. SINCE NO SUCH ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 11 - PAYMENT IS ENVISAGED IN DEMERGER SCHEME, APPELLANT MADE THE PAYMENT BY CREATING DOCUMENTS IN THE FORM OF OV ERSEAS RIGHT AGREEMENT AND TERMINATION AGREEMENT. SINCE T HERE IS NO CONTEMPORARY EVIDENCE OF RIGHTS AGREEMENT DATED 01.04.2006, IT IS PRESUMED THAT BOTH THE AGREEMENTS I.E. RIGHTS AND TERMINATION ARE EXECUTED TOGETHER. SINC E THERE WAS NO POSSIBILITY OF GETTING OLD STAMP PAPER, THE RIGHT AGREEMENT WAS PREPARED ON PLAIN PAPER. THE VERY FA CT THAT APPELLANT USED TERMINATION AGREEMENT ON STAMP PAPER , THE REQUIREMENT OF USING STAMP PAPER IS NOT UNKNOWN TO THE APPELLANT. THIS PUT QUESTION MARK ON THESE TWO AGR EEMENTS WHICH ARE NOTHING BUT AN ATTEMPT TO GET MONEY ON AC COUNT OF DEMERGER AND TO CLAIM TAX DEDUCTION. 5. IT WAS SPECIFICALLY ASKED TO THE APPELLANTS COUNSE L TO SUBMIT THE DETAILS OF ACCOUNTING AND TAX TREATMENT GIVEN B Y THE OTHER ENTITY TO THE TRANSACTION NAMELY RK IT. HOWE VER APPELLANT DID NOT SUBMIT ANY DETAILS DESPITE THE FA CT THAT THE SAID RK IT IS ASSOCIATE CONCERN OF INDIA INFOLINE L TD AND SHARING THE SAME OFFICE ADDRESS. WHEN THE TRANSACT ION WAS TREATED AS SHAM BY THE ASSESSING OFFICER, THE ONUS TO PROVE THE TRANSACTION GENUINE WAS VERY HEAVY ON THE APPEL LANT. DESPITE THAT APPELLANT CHOSE TO REMAIN QUIET ON THE ISSUE AND SUBMITTED ONLY LEGAL SUBMISSIONS. LEGAL SUBMISSION S COME AFTER FACTS. WHEN THE TRANSACTION IS NOT TREATED G ENUINE OF FACTS, THE LEGAL SUBMISSION ON ALLOWABILITY CANNOT MAKE ANY DIFFERENCE. THIS ALSO SHOWS THAT APPELLANT WAS NOT IN A POSITION TO DEFEND THIS TRANSACTION AND SUBMIT NECE SSARY EVIDENCES FROM BOTH THE SIDES IN THIS REGARD. 6. ASSESSING OFFICER MENTIONED IN PARA-4.9 OF ASSESSME NT ORDER THAT NO INCOME HAS BEEN RECOGNIZED BY INDIA INFOCOM LTD. ON ACCOUNT OF OVERSEAS RIGHT AGREEMENT BETWEEN RKIT AN D IIL EITHER IN FINANCIAL YEAR 2006-07 OR IN ANY SUBSEQUE NT YEAR. THIS ALSO SHOWS THAT THE RIGHT ASSIGNMENT AGREEMENT IS NOT GENUINE AND TERMINATION AGREEMENT OF SUCH AGREEMENT IS NOTHING BUT PAPER DOCUMENTS FOR CLAIMING DEDUCTION. 7. SINCE THIS PAYMENT IS RELATING TO THE SCHEME OF DEM ERGER, APPELLANT CANNOT CLAIM DEPRECIATION ON SUCH ASSETS WHICH WERE NOT PART OF WDV OF THE DEMERGED ENTITY. THERE FORE JUST BY MAKING PAYMENT WHICH MAY BE FOR ANY CONSIDERATIO N OTHER THAN PURCHASE OF ASSET, DEPRECIATION OR EXPEN SE CANNOT BE CLAIMED. ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 12 - IN VIEW OF THE ABOVE, I HOLD THAT THE TRANSACTION O F ASSIGNMENT OF RIGHTS AND DETERMINATION THEREOF IS NOT GENUINE AND IS ART OF SCHEME OF DEMERGER WHEREIN SUCH PAYMENTS ARE NOT ALLOWED/APPROVED BY HIGH COURT. CONSIDERING THIS T HE CLAIM OF DEPRECIATION ON PAYMENT TO RK IT IS NOT JUSTIFIED A ND HENCE DISALLOWANCE IS CONFIRMED. 4.3. THE OBJECTION OF THE AO TO DISALLOW THE CLAIM OF THE ASSESSEE- COMPANY IN RESPECT OF THE DEPRECIATION ON GOODWILL, FIRSTLY ON THE BASIS THAT IN THE CASES OF NEW ERA PUBLICATIONS PVT.LTD. AND INDIAINFO.COM LTD., THE ASSESSEE-COMPANY HAS ONLY COMPENSATED THE LOSS SUFFERED BY THE CONCERNS. SECONDLY, THE OBJECTION OF THE AO WA S THAT FOR CLAIMING DEPRECIATION, INTANGIBLE ASSETS SHOULD BE OF SIMILA R NATURE OF KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHI SES. BUT IN THE OPINION OF AO THIS IS NOT THE CASE IN HAND, AS THE AMOUNT P AID BY THE ASSESSEE DID NOT RESULT INTO ACQUISITION OF ANY KNOW-HOW, PATENT S, COPYRIGHTS, TRADEMARKS, ETC. IN SUPPORT OF THIS OBJECTION, THE AO PLACED RELIANCE ON THE DECISION RENDERED IN THE CASE OF M/S.R.G. KESWA NI VS. ACIT (116 ITD 133 DELHI) AND IN RESPECT OF THE CONSIDERATIO N PAID TO RKIT, THE AO OBSERVED THAT INDIAINFO.COM LTD. HAS NOT RECOGNI ZED ANY INCOME ON ACCOUNT OF OVERSEAS RIGHT AGREEMENT BETWEEN THE RKI T AND IIL EITHER IN FY 2006-07. 4.4. THE LD.CIT(A) REJECTED THE CLAIM OF THE ASSESS EE ON THE BASIS THAT TWO ITEMS, NAMELY, CREATION OF GOODWILL OF RS.4,54, 637/- ON ACCOUNT OF SCHEME OF MERGER OF A DIVISION OF INDIA INFOCOM LTD . AND CREATION OF GOODWILL OF RS.51,54,880/- ON ACCOUNT OF MERGER TRA NSACTION WITH NEW ERA PUBLICATIONS ARE DIRECTLY COVERED BY EXPLANATIO N 7A TO SECTION 43(1). THE LD.CIT(A) OBSERVED THAT THE DEPRECIATION IS ALL OWABLE ON THE WDV ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 13 - OF BLOCK OF ASSET AND SUCH WDV IS DEFINED IN SECTIO N 43(6) OF IT ACT. THEREFORE, EVEN IF IT IS HELD THAT APPELLANT IS ELI GIBLE FOR DEPRECIATION ON GOODWILL, THE SAME WILL NOT FORM PART OF WDV ON WHI CH DEPRECIATION CAN BE CLAIMED. THE LD.CIT(A) WAS OF THE VIEW THAT EVE N OTHERWISE ALSO THE CLAIM WILL NOT BE ALLOWABLE SINCE GOODWILL IS NOT T HE INTANGIBLE ASSET IN THE NATURE OF ASSETS MENTIONED IN THE SECTION. AS REGARDS CLAIM OF DEPRECIATION ON PAYMENT MADE TO RKIT, THE AO REJECT ED THE CLAIM ON THE BASIS THAT THE ENTIRE GAMUT OF TRANSACTIONS CLEARLY SHOW THAT THERE WAS ACTUALLY NO SUCH COMMERCIAL RIGHTS, WHICH HAS BEEN SHOWN TO BE CREATED JUST TO CLAIM DEPRECIATION. THE AO OBSERVED THAT I N ANY CASE, THE PAYMENT COULD ONLY BE TOWARDS THE CONSIDERATION FOR TRANSFER OF INTERNET DIVISION TO THE ASSESSEE FROM IIL, WHICH AGAIN WOUL D REPRESENT EXCESS CONSIDERATION PAID OVER AND ABOVE THE NET ASSETS AC QUIRED, WHICH DOES NOT RESULT IN CREATION OF ANY ASSET AS CONTEMPLATED BY SECTION 32 OF THE ACT. THE LD.CIT(A) CONFIRMED THIS VIEW OF THE AO BY OBSE RVING THAT THE TRANSACTION INVOLVING PAYMENT OF RS.2 CROES IS NOT A GENUINE BUSINESS TRANSACTION. IN SUPPORT OF THIS OBSERVATION, THE L D.CIT(A) HELD AS UNDER:- 1. BOTH THE COMPANIES I.E. INDIA INFOCOM LTD. AND RK IT HAVE THE COMMON ADDRESS IN BANGALORE AND ACCORDINGLY IT IS C LEAR THAT BOTH THE ENTITIES ARE LINKED WITH EACH OTHER. THEREFORE ANY AGREEMENT BETWEEN THESE TWO NEED TO HAVE INDEPENDENT CONTEMPO RARY EVIDENCE. 2. THE ASSIGNMENT AGREEMENT IS CLAIMED TO BE DATED 1-0 4-2006 BUT IT IS NOT ON ANY STAMP PAPER. NO PAYMENT IN TERMS OF THI S AGREEMENT WAS EFFECTED PRIOR TO THE TERMINATION AGREEMENT DATED 1 1-08-2006. THIS SHOWS THAT THIS AGREEMENT IS NOT SUPPORTED BY ANY C ONTEMPORARY EVIDENCE. 3. AS AGAINST THE ASSIGNMENT AGREEMENT, THE TERMINATIO N AGREEMENT IS ON THE STAMP PAPER OF RS.100 WHICH MEANS THE AGREEM ENT IS SUPPORTED BY INDEPENDENT EVIDENCE. HOWEVER, THIS A GREEMENT IS SIGNED IN MUMBAI ON THE STAMP PAPER PURCHASED IN MU MBAI. SURPRISINGLY NEITHER APPELLANT NOR RK IT HAVE ANY O FFICE IN MUMBAI. ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 14 - THIS SHOWS THAT THIS AGREEMENT IS PART OF DEMERGER/ MERGER SCHEME HANDLED BY THE INVESTMENT BANKER FROM MUMBAI. 4. THE APPOINTED DATE OF DEMERGER SCHEME IS SEPTEMBER 1 2006 BY THE AGREEMENT DATED 11.06.2007. THIS AGREEMENT WAS APP ROVED BY HONORABLE GUJARAT HIGH COURT ON THIS DATE. THIS ME ANS NEGOTIATIONS AND DILIGENCE FOR THE SCHEME OF ARRANGEMENT STARTED MUCH IN ADVANCE. SINCE NO SUCH PAYMENT IS ENVISAGED IN DEM ERGER SCHEME, APPELLANT MADE THE PAYMENT BY CREATING DOCUMENTS IN THE FORM OF OVERSEAS RIGHT AGREEMENT AND TERMINATION AGREEMENT. SINCE THERE IS NO CONTEMPORARY EVIDENCE OF RIGHTS AGREEMENT DATED 01.04.2006, IT IS PRESUMED THAT BOTH THE AGREEMENTS I.E. RIGHTS AND T ERMINATION ARE EXECUTED TOGETHER. SINCE THERE WAS NO POSSIBILITY OF GETTING OLD STAMP PAPER, THE RIGHT AGREEMENT WAS PREPARED ON PLAIN PA PER. THE VERY FACT THAT APPELLANT USED TERMINATION AGREEMENT ON S TAMP PAPER, THE REQUIREMENT OF USING STAMP PAPER IS NOT UNKNOWN TO THE APPELLANT. THIS PUT QUESTION MARK ON THESE TWO AGREEMENTS WHIC H ARE NOTHING BUT AN ATTEMPT TO GET MONEY ON ACCOUNT OF DEMERGER AND TO CLAIM TAX DEDUCTION. 5. IT WAS SPECIFICALLY ASKED TO THE APPELLANTS COUNSE L TO SUBMIT THE DETAILS OF ACCOUNTING AND TAX TREATMENT GIVEN BY TH E OTHER ENTITY TO THE TRANSACTION NAMELY RK IT. HOWEVER APPELLANT DI D NOT SUBMIT ANY DETAILS DESPITE THE FACT THAT THE SAID RK IT IS ASS OCIATE CONCERN OF INDIA INFOLINE LTD AND SHARING THE SAME OFFICE ADDR ESS. WHEN THE TRANSACTION WAS TREATED AS SHAM BY THE ASSESSING OF FICER, THE ONUS TO PROVE THE TRANSACTION GENUINE WAS VERY HEAVY ON THE APPELLANT. DESPITE THAT APPELLANT CHOSE TO REMAIN QUIET ON THE ISSUE AND SUBMITTED ONLY LEGAL SUBMISSIONS. LEGAL SUBMISSION S COME AFTER FACTS. WHEN THE TRANSACTION IS NOT TREATED GENUINE OF FACTS, THE LEGAL SUBMISSION ON ALLOWABILITY CANNOT MAKE ANY DIFFEREN CE. THIS ALSO SHOWS THAT APPELLANT WAS NOT IN A POSITION TO DEFEN D THIS TRANSACTION AND SUBMIT NECESSARY EVIDENCES FROM BOTH THE SIDES IN THIS REGARD. 6. ASSESSING OFFICER MENTIONED IN PARA-4.9 OF ASSESSME NT ORDER THAT NO INCOME HAS BEEN RECOGNIZED BY INDIA INFOCOM LTD. ON ACCOUNT OF OVERSEAS RIGHT AGREEMENT BETWEEN RKIT AND IIL EITHE R IN FINANCIAL YEAR 2006-07 OR IN ANY SUBSEQUENT YEAR. THIS ALSO SHOWS THAT THE RIGHT ASSIGNMENT AGREEMENT IS NOT GENUINE AND TERMI NATION AGREEMENT OF SUCH AGREEMENT IS NOTHING BUT PAPER DO CUMENTS FOR CLAIMING DEDUCTION. 7. SINCE THIS PAYMENT IS RELATING TO THE SCHEME OF DEM ERGER, APPELLANT CANNOT CLAIM DEPRECIATION ON SUCH ASSETS WHICH WERE NOT PART OF WDV OF THE DEMERGED ENTITY. THEREFORE JUST BY MAKI NG PAYMENT ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 15 - WHICH MAY BE FOR ANY CONSIDERATION OTHER THAN PURCH ASE OF ASSET, DEPRECIATION OR EXPENSE CANNOT BE CLAIMED. 4.5. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED REL IANCE ON THE JUDGEMENT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT, KOLKATA VS. SMIFS SECURITIES LTD. (2012- 24 TAXMANN .COM 222) AND THE HONBLE SUPREME COURT IN PARA NOS.4 & 5 OF ITS ORDE R HELD AS UNDER:- 4. EXPLANATION 3 STATES THAT THE EXPRESSION ASSE T SHALL MEAN AN INTANGIBLE ASSET, BEING KNOW-HOW, PATENTS, COPYRIGH TS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMME RCIAL RIGHTS OF SIMILAR NATURE. A READING THE WORDS ANY OTHER BUS INESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE IN CLAUSE (B) OF EXPLANATION 3 INDICATES THAT GOODWILL WOULD FALL UNDER THE EXPRES SION ANY OTHER BUSINESS OR COMMERCIAL RIGHT OF A SIMILAR NATURE. THE PRINCIPLE OF EJUSDEM GENERIS WOULD STRICTLY APPLY WHILE INTERPRE TING THE SAID EXPRESSION WHICH FINDS PLACE IN EXPLANATION 3(B). 5. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT GOODWILL IS AN ASSET UNDER EXPLANATION 3(B) TO SECTION 32(1) OF TH E ACT. 4.6. THE ABOVE JUDGEMENT OF HONBLE APEX COURT HAS BEEN FOLLOWED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BIRLA GLOBAL ASSET FINANCE CO.LTD. (2014 41 TAXMANN.COM 262). THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANIPAL UNIVERSAL LEARNING (P) LTD. HAS ALSO FOLLOWED THE JUDGEMENT OF HONBLE APEX COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD.(SUPRA). WE F IND THAT THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF AREVA T & D INDIA LTD. VS. DCIT (2012 20 TAXMANN.COM 29) HAS EXAMINED THE EN TIRE LAWS AND IN PARAS-13 & 14 OF ITS ORDER HELD AS UNDER:- 13. IN THE PRESENT CASE, APPLYING THE PRINCIPLE OF EJUS DEM GENERIS, WHICH PROVIDES THAT WHERE THERE ARE GENERAL WORDS FOLLOWI NG PARTICULAR AND SPECIFIC ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 16 - WORDS, THE MEANING OF THE LATTER WORDS SHALL BE CON FINED TO THINGS OF THE SAME KIND, AS SPECIFIED FOR INTERPRETING THE EXPRESSION 'BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE' SPECIFIED IN SECTION 32(L )(II) OF THE ACT, IT IS SEEN THAT SUCH RIGHTS NEED NOT ANSWER THE DESCRIPTION OF 'KNO WHOW, PATENTS, TRADEMARKS, LICENSES OR FRANCHISES' BUT MUST BE OF SIMILAR NATURE AS THE SPECIFIED ASSETS. ON A PERUSAL OF THE MEANING OF TH E CATEGORIES OF SPECIFIC INTANGIBLE ASSETS REFERRED IN SECTION 32(L)(II) OF THE ACT PRECEDING THE TERM 'BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE', IT IS SEEN THAT THE AFORESAID INTANGIBLE ASSETS ARE NOT OF THE SAME KIND AND ARE CLEARLY DISTINCT FROM ONE ANOTHER. THE FACT THAT AFTER THE SPECIFIED INTANGIB LE ASSETS THE WORDS 'BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE' HAVE BEEN A DDITIONALLY USED, CLEARLY DEMONSTRATES THAT THE LEGISLATURE DID NOT INTEND TO PROVIDE FOR DEPRECIATION ONLY IN RESPECT OF SPECIFIED INTANGIBLE ASSETS BUT ALSO TO OTHER CATEGORIES OF INTANGIBLE ASSETS, WHICH WERE NEITHER FEASIBLE NOR POSSIBLE TO EXHAUSTIVELY ENUMERATE. IN THE CIRCUMSTANCES, THE NATURE OF 'BUS INESS OR COMMERCIAL RIGHTS' CANNOT BE RESTRICTED TO ONLY THE AFORESAID- SIX CATEGORIES OF ASSETS, VIZ., KNOWHOW, PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES OR FRANCHISES. THE NATURE OF 'BUSINESS OR COMMERCIAL RIGHTS' CAN BE OF THE SA ME GENUS IN WHICH ALL THE AFORESAID SIX ASSETS FALL. ALL THE ABOVE FALL IN TH E GENUS OF INTANGIBLE ASSETS THAT FORM PART OF THE TOOL OF TRADE OF AN ASSESSEE FACILITATING SMOOTH CARRYING ON OF THE BUSINESS. IN THE CIRCUMSTANCES, IT IS OBS ERVED THAT IN CASE OF THE ASSESSEE, INTANGIBLE ASSETS, VIZ., BUSINESS CLAIMS; BUSINESS INFORMATION; BUSINESS RECORDS; CONTRACTS; EMPLOYEES; AND KNOWHOW , ARE ALL ASSETS, WHICH ARE INVALUABLE AND RESULT IN CARRYING ON THE TRANSM ISSION AND DISTRIBUTION BUSINESS BY THE ASSESSEE, WHICH WAS HITHERTO BEING CARRIED OUT BY THE TRANSFEROR, WITHOUT ANY INTERRUPTION. THE AFORESAID INTANGIBLE ASSETS ARE, THEREFORE, COMPARABLE TO A LICENSE TO CARRY OUT THE EXISTING TRANSMISSION AND DISTRIBUTION BUSINESS OF THE TRANSFEROR. IN THE ABS ENCE OF THE AFORESAID INTANGIBLE ASSETS, THE ASSESSEE WOULD HAVE HAD TO C OMMENCE BUSINESS FROM SCRATCH AND GO THROUGH THE GESTATION PERIOD WHEREAS BY ACQUIRING THE AFORESAID BUSINESS RIGHTS ALONG WITH THE TANGIBLE A SSETS, THE ASSESSEE GOT AN UP AND RUNNING BUSINESS. THIS VIEW IS FORTIFIED BY THE RATIO OF THE DECISION OF THE SUPREME COURT IN TECHNO SHARES & STOCKS LTD. (S UPRA) WHEREIN IT WAS HELD THAT INTANGIBLE ASSETS OWNED BY THE ASSESSEE AND USED FOR THE BUSINESS PURPOSE WHICH ENABLES THE ASSESSEE TO ACCESS THE MA RKET AND HAS AN ECONOMIC AND MONEY VALUE IS A 'LICENSE' OR 'AKIN TO A LICENS E' WHICH IS ONE OF THE ITEMS FALLING IN SECTION 32(1 )(II) OF THE ACT. 14. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE SPECIFIED INTANGIBLE ASSETS ACQUIRED UNDER SLUMP SALE AGREEME NT WERE IN THE NATURE OF 'BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE' SPECIFIED IN SECTION 32(1)(II) OF THE ACT AND WERE ACCORDINGLY ELIGIBLE FOR DEPRECIATION UNDER THAT SECTION. ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 17 - 5. IN THE LIGHT OF VARIOUS CASE-LAWS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT TH E DEPRECIATION ON GOODWILL IS ALLOWABLE. THE OBJECTIONS OF AUTHORITI ES BELOW ARE NOT FOUNDED ON SOUND LEGAL PRINCIPLES. THE AUTHORITIES HAVE MISCONSTRUED THE PROVISIONS OF SECTION 32 OF THE ACT, WHILE REJECTIN G THE CLAIM OF THE ASSESSEE. IN THE CASE IN HAND, THE AUTHORITIES BELO W HAVE DOUBTED THE TRANSACTIONS EFFECTED BY THE ASSESSEE-COMPANY. MOR E PARTICULARLY, THE LD.CIT(A) IN THE CASE OF RKIT, TO WHOM THE ASSESSEE HAS PAID A SUM OF RS.2 CRORES FOR ACQUIRING THE OVERSEAS RIGHTS. THE LD.CIT(A) HAS PROCEEDED ON THE ASSUMPTION THAT THE CONTRACTS AS E NTERED INTO BY THE ASSESSEE-COMPANY WERE NOT GENUINE. SUCH ASSUMPTI ON WAS ON THE BASIS THAT THE ASSIGNMENT AGREEMENT WAS EXECUTED ON A PLA IN-PAPER AND TERMINATION AGREEMENT WAS EXECUTED ON A STAMP-PAPER . UNDER THE CONTRACT ACT, THERE IS NO DISTINCTION BETWEEN A CON TRACT EXECUTED ON PLAIN-PAPER AND EXECUTED ON A STAMP-PAPER. BOTH TH E CONTRACTS ARE ENFORCEABLE UNDER THE CONTRACT ACT. ANY NON-PAYMEN T OF THE STAMP DUTY ATTRACTS THE PROVISIONS OF THE RESPECTIVE STAMP ACT . THE AUTHORITIES HAVE NOT GIVEN ANY FINDING AS TO HOW THIS CONTRACT IS TH E SHAM TRANSACTION WITHOUT EVEN EXAMINING THE PERSONS WHO HAVE EXECUTE D THE SAME. UNDER THESE FACTS, WE ARE UNABLE TO AGREE WITH THE VIEW O F THE AUTHORITIES BELOW THAT THE TRANSACTIONS WERE SHAM OR OTHERWISE NOT FO R BUSINESS PURPOSE. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID DO WN BY THE HONBLE APEX COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD.(SUPRA) AND THE HONBLE DELHI HIGH COURT IN THE CASE OF AVERA T & D INDIA LTD. VS. DCIT(SUPRA), WE ARE OF THE VIEW THAT THE ASSESSEE I S ELIGIBLE FOR DEPRECIATION ON GOODWILL AS CLAIMED AND THIS ADDITI ON MADE ON THIS COUNT ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 18 - IS HEREBY DIRECTED TO BE DELETED. THUS, THIS GROUN D OF ASSESSEES APPEAL IS ALLOWED. 6. GROUND NO.2 IS AN ALTERNATIVE CLAIM OF THE ASSES SEE TO THE GROUND NO.1 AND SINCE WE HAVE ALLOWED GROUND NO.1 OF ASSES SEES APPEAL, THIS GROUND DOES NOT SURVIVE. THEREFORE THE SAME IS NO T ADJUDICATED ON MERIT. 7. GROUND NO.3 IS CONSEQUENTIAL IN NATURE. 8. GROUND NO.4 IS IN RESPECT OF LEVY OF INTEREST U/ S.234B OF THE ACT. 8.1 THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THA T UNDER THE FACTS AND CIRCUMSTANCES, THE INTEREST LEVIED U/S.234B OF THE ACT IS NOT JUSTIFIED. HE SUBMITTED THAT THE ADDITION(S) OF RS.6,84,79,558/- FOR PROVISION OF DOUBTFUL DEBTS AND RS.22,72,803/- FOR PROVISION OF DOUBTFUL ADVANCES AND RS.2,16,37,588/- FOR DEFERRED TAX LIABILITY MADE TO THE BOOK PROFITS U/S.115JB OF THE ACT ARE IN RESPECT OF THE RETROSPE CTIVE AMENDMENT IN THE PROVISIONS OF SECTION 115JB OF THE ACT. IN SUPPORT OF THIS CONTENTION, LD.COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS:- 18. SUN PETROCHEMICALS PVT.LTD. VS. ITO (ITA NO.1010/AH D/2009) (AHMEDABAD ITAT) 19 .CIT VS. ABDUL WAHID AND CO. (APPEAL NO.396 AND 398 OF 2010) (CHENNAI HIGH COURT) 20. CIT VS. REVATHI EQUIPMENT LTD. (298 ITR 67) (MADRAS HIGH COURT) 8.2. ON THE CONTRARY, LD.CIT-DR SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 19 - 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE HONBLE COORDINATE BENCH (ITAT D BENCH AHMED ABAD) IN ITA NO.1010/AHD/2009 FOR AY 2006-07 IN THE CASE OF SUN PETROCHEMICALS PVT.LTD. VS. ITO VIDE ORDER DATED 05/06/2009 HAS HE LD AS UNDER:- 5. THE CONTENTION OF THE ASSESSEE BEFORE US IS BA SED ON THE JUDGMENT OF THE MADRAS HIGH COURT IN CIT VS. REVATHI EQUIPMENT LIMI TED (298 ITR 67). IN THIS JUDGMENT THE HIGH COURT HAS HELD THAT TILL THE FINANCE BILL BECOMES LAW (BY BEING ASSENTED TO BY THE HONBLE PRESIDENT OF I NDIA) THE ASSESSEE CANNOT VISUALIZE THAT A LIABILITY TO PAY TAX WOULD BE FAST ENED ON HIM AND THEREFORE CANNOT PAY THE ADVANCE TAX ON THE SAME. IT WAS FUR THER HELD THAT IF THERE WAS NO POSSIBILITY OF KNOWING THE LIABILITY ON THE DATE ON WHICH ADVANCE TAX WAS PAYABLE, AND ON THAT DATE ADVANCE TAX WAS NOT PAYAB LE ON THE AMOUNT IN QUESTION, THE ASSESSEE WOULD NOT BE LIABLE TO PAY I NTEREST U/S.234B WHEN BY RETROSPECTIVE AMENDMENT MADE LATER THE AMOUNT BECOM ES TAXABLE. THIS JUDGMENT APPLIES TO THE PRESENT CASE SO FAR AS THE DEFERRED TAX IS CONCERNED. IN HARYANA WAREHOUSING CORPORATION V. DCIT (75 ITD 155)(TM) IT HAS BEEN HELD BY THE THIRD MEMBER THAT IF ON THE DATE OF PAY ING ADVANCE TAX THERE WAS NO LIABILITY TO PAY THE SAME ON A PARTICULAR AMOUNT , THE FACT THAT BY REASON OF A LATER DECISION OF THE SUPREME COURT THE AMOUNT BE CAME TAXABLE WOULD NOT MAKE THE ASSESSEE LIABLE FOR PAYING INTEREST U/S.23 4B. PRIYANKA OVERSEAS LTD. VS. DCIT (79 ITD 353) IS A DECISION DEALING WITH TH E LIABILITY TO PAY INTEREST U/S.234B BY REASON OF A RETROSPECTIVE AMENDMENT, AS IN THE PRESENT CASE. THE DELHI BENCH OF THE TRIBUNAL HELD THAT THE ASSESSEE WAS NOT LIABLE TO PAY INTEREST. THE ORDER OF THE HYDERABAD BENCH OF THE TRIBUNAL IN ACIT V JINDAL IRRIGATION SYSTEMS LTD. (56 ITD 164) IS ONE IN WHIC H THE EFFECT OF RETROSPECTIVE AMENDMENT WAS NOT CONSIDERED, BUT THE CASE WAS DECI DED ON THE GENERAL PRINCIPLE OF LAW THAT LEX NON COGIT AD IMPOSSIBILI A (THE LAW DOES NOT COMPEL A PERSON TO DO THE IMPOSSIBLE). THE JUDGMEN T OF THE MADRAS HIGH COURT AND THE ORDERS OF THE TRIBUNAL CITED SUPRA AR E ALL IN SUPPORT OF THE ASSESSEES CASE BEFORE US. THE JUDGMENT OF THE MAD RAS HIGH COURT (SUPRA) IS A CASE OF LIABILITY ARISING ON ACCOUNT OF A RETROSP ECTIVE AMENDMENT, AS IN THE CASE BEFORE US. NO CONTRARY DECISION WAS BROUGHT T O OUR NOTICE BY THE REVENUE. 6. IN THE ABOVE CIRCUMSTANCES, WE HOLD THAT THE LEV Y OF INTEREST IN RESPECT OF THE AMOUNT OF DEFERRED TAX DEDUCTED WHIL E ARRIVING AT THE BOOK PROFIT IN THE RETURN IS INVALID. THE OTHER PO INT, VIZ., THE LEVY OF INTEREST ON THE FRINGE BENEFIT TAX WAS NOT ARGUED A ND HENCE CONFIRMED. ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 20 - 9.1. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. ABDUL WAHID AND CO. (APPEAL NOS.396 AND 398 OF 2010) HAS HELD AS UNDER:- 3. WE ARE IN FULL AGREEMENT WITH THE PRINCIPLE ST ATED BY THE TRIBUNAL WHILE UPHOLDING THE ORDER OF THE COMMISSIONER (APPEALS). WHEN THE LIABILITY FOR PAYMENT OF ADDITIONAL TAX ITSELF WAS CREATED FOR TH E FIRST TIME, BASED ON THE SUBSEQUENT AMENDMENT, IN THE YEAR 2005, WITH RETROS PECTIVE EFFECT FROM 01.04.1998, IT WOULD BE INCONGRUENT TO EXPECT THE A SSESSEE TO HAVE SATISFIED THE REQUIREMENT OF PAYMENT OF ADVANCE TAX AS PRESCR IBED UNDER SECTION 234(B) OF THE INCOME TAX ACT. THEREFORE, WHILE THE LIABILITY FOR ADDITIONAL TAX BY VIRTUE OF THE AMENDMENT WAS FOUND TO BE SATISFIE D BY THE RESPONDENT/ASSESSEE, THE PAYMENT OF INTEREST UNDER SECTION 234(B) FOR FAILURE TO PAY ADVANCE TAX IN ANTICIPATION OF SUCH LIABILIT Y CREATED ON A FUTURE YEAR, BASED ON AN AMENDMENT, CANNOT BE MADE. WE ARE, THE REFORE, CONVINCED THAT THE CONCLUSION ARRIVED AT BY THE C.I.T.(APPEALS) AS WELL AS THAT OF THE TRIBUNAL CANNOT BE FOUND FAULT WITH. WE THEREFORE DO NOT FI ND ANY SCOPE TO ENTERTAIN THESE APPEALS. THE SUBSTANTIAL QUESTION OF LAW RAI SED IN THESE TAX CASE APPEALS ARE ANSWERED IN FAVOUR OF THE ASSESSEE. CO NNECTED MISCELLANEOUS PETITION IS CLOSED. 9.2. FURTHER, THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. REVATHI EQUIPMENT LTD. (IN APPEAL NOS.491 OF 2007) HAS HELD AS UNDER:- WE HAVE NO DOUBT IN OUR MIND THAT THE LEVY OF INTE REST UNDER SECTIONS 234B AND 234C ARE OF MANDATORY NATURE, BUT AT THE S AME TIME, IF WE READ SECTIONS 234B AND 234C CAREFULLY, WE FIND THAT SUCH LIABILITY IS FASTENED TO THOSE ASSESSEES WHO ARE LIABLE TO PAY A DVANCE TAX. NOW, LET US SEE WHO ARE LIABLE TO PAY ADVANCE TAX AND HOW. S ECTIONS 207 AND 208 READ AS UNDER: 207. TAX SHALL BE PAYABLE IN ADVANCE DURING ANY FI NANCIAL YEAR, IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 208 TO 2 19 (BOTH INCLUSIVE), IN RESPECT OF THE TOTAL INCOME OF THE ASSESSEE WHIC H WOULD BE CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR IMMEDIATE LY FOLLOWING THAT FINANCIAL YEAR, SUCH INCOME BEING HEREAFTER IN THIS CHAPTER REFERRED TO AS 'CURRENT INCOME'. 208. ADVANCE TAX SHALL BE PAYABLE DURING A FINANCIA L YEAR IN EVERY CASE WHERE THE AMOUNT OF SUCH TAX PAYABLE BY THE AS SESSEE DURING THAT YEAR, AS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER, IS FIVE THOUSAND RUPEES OR MORE.' 7. A COMBINED READING OF THE ABOVE PROVISIONS MAKES IT CLEAR THAT THE ASSESSEE HAS TO PAY TAXES IN ADVANCE IN RESPECT OF THE TOTAL INCOME OF ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 21 - THE ASSESSEE, WHICH WOULD BE CHARGEABLE IN A PARTIC ULAR ASSESSMENT YEAR. NOW BEFORE THE INTRODUCTION OF SECTION 35DDA, THE LEGAL DICTUM WAS VERY CLEAR THAT THE ASSESSEE COULD CLAIM EXPEND ITURE INCURRED ON ACCOUNT OF PAYMENT MADE FOR THE VRS BY THE ASSESSEE IN VIEW OF THE BINDING DECISIONS OF THE HON'BLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT V. GEORGE OAKES LTD. [1992] 197 ITR 288 (MAD) AND CIT V. SIMPSON AND CO. LTD. (NO. 2) [1998] 230 ITR 794 (MAD). IN BOTH THE DECISIONS, IT WAS CLEARLY LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT THAT PAYMENTS TO EMPLOYEES UNDER THE VRS WERE IN THE NATURE OF BUSINESS EXPENDITURE AND WAS DEDUCTIBLE UNDER SECTI ON 37. THEREFORE, TILL THE INTRODUCTION OF NEW PROVISIONS UNDER SECTI ON 35DDA, THE ASSESSEE COULD HAVE ESTIMATED THE INCOME LEGITIMATE LY AFTER REDUCING THE EXPENDITURE INCURRED ON THE VRS. IT IS A COMMON KNOWLEDGE THAT THE FINANCE BILL IS INTRODUCED ON FEBRUARY 28, 2001 , AND THE SAME IS MADE INTO THE ACT AFTER PASSING THE BILL IN BOTH TH E HOUSES OF PARLIAMENT AND RECEIVING THE ASSENT OF THE HON'BLE PRESIDENT OF INDIA SOME WHERE IN MAY OR JUNE, WHICH MEANS TILL THAT DA TE NO ASSESSEE CAN VISUALIZE THAT A NEW LIABILITY WOULD BE FASTENE D TO HIM. NORMALLY, NEW PROVISIONS ARE INTRODUCED WITH EFFECT FROM THE NEXT ASSESSMENT YEAR, BUT THIS PROVISION UNDER SECTION 35DDA WAS IN TRODUCED BY PARLIAMENT IN ITS WISDOM WITH EFFECT FROM APRIL 1, 2001, I.E., THE SAME YEAR AND THAT IS WHY DIFFICULTY HAS ARISEN FOR VISU ALIZING THE LIABILITY AND THE ASSESSEE COULD NOT DEDUCT SUCH EXPENDITURE. IN FACT IN ALMOST IDENTICAL CIRCUMSTANCES IN THE THIRD MEMBER DECISIO N BY THE DELHI BENCH IN THE . CASE OF HARYANA WAREHOUSING CORPORAT ION V. DEPUTY CIT [2001] 252 ITR (AT) 34 IT WAS HELD THAT IN SUCH SITUATIONS THE LEGAL DICTUM LEX NON COGIT AD IMPOSSIBILLIA WOULD B E ATTRACTED. THE SIMPLE MEANING OF THIS DICTUM IS THAT 'LAW CANNOT C OMPEL YOU TO DO THE IMPOSSIBLE'. IN THE CASE BEFORE US ALSO, THE ASSESS EE COULD NOT HAVE VISUALIZED TILL THE LAST INSTALMENT OF ADVANCE TAX, I.E., MARCH 15, 2001, THAT IT WOULD NOT BE ENTITLED TO DEDUCT THE VRS PAY MENTS. THEREFORE, THE ASSESSEE COULD NOT HAVE DONE ANYTHING OTHER THA N TO ESTIMATE THE LIABILITY TO PAY ADVANCE TAX ON THE BASIS OF EXISTI NG PROVISIONS. WE ARE OF THE CONSIDERED OPINION THAT IN SUCH SITUATION, I T CANNOT BE SAID THAT THE ASSESSEE WAS LIABLE TO PAY ADVANCE TAX. ONCE WE COME TO THE CONCLUSION THAT THE ASSESSEE WAS NOT LIABLE TO PAY ADVANCE TAX, THERE IS NO QUESTION OF CHARGING TAX UNDER SECTIONS 234B AND 234C. IN SIMILAR CIRCUMSTANCES IN THE CASE OF PRIYANKA OVERSEAS LTD. V. DEPUTY CIT [2001] 79 ITD 353 (DELHI) WHERE THE ASSESSEE HAD TREATED THE RECEIPT OF CASH ASSISTANCE AS CAPITAL RECEIPTS, WHICH WAS S UBSEQUENTLY AMENDED TO BE BUSINESS RECEIPT BY THE FINANCE ACT, 1990, IT WAS HELD THAT IN SUCH CASES INTEREST UNDER SECTIONS 234B AND 234C WAS NOT CHARGEABLE. IN THESE CIRCUMSTANCES, WE THINK THAT T HE ASSESSEE WAS NOT LIABLE TO PAY ADVANCE TAX AND THEREFORE LEVY OF INT EREST UNDER SECTIONS 234B AND 234C IS NOT JUSTIFIED. FURTHER, IT IS PERT INENT TO NOTE THAT THE ASSESSEE BY WAY OF ABUNDANT CAUTION DEPOSITED A SUM OF RS. 90,00,000 ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 22 - ON AUGUST 6, 2001, I.E., MUCH BEFORE THE DUE DATE O F FILING OF THE RETURN, WHICH ALSO PROVES THE BONA FIDE CREDENTIALS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND DELETE THE LEVY OF INTEREST UNDER SECTIONS 234B AND 234C.' FROM A READING OF THE ABOVE, IT IS CLEAR THAT THE T RIBUNAL HAD TAKEN A VIEW THAT THE FINANCE BILL INTRODUCED WAS PASSED IN BOTH THE HOUSES OF PARLIAMENT, RECEIVING THE ASSENT OF THE HON'BLE PRESIDENT OF IN DIA, ON MAY 11, 2001. TILL THAT TIME, THE ASSESSEE COULD NOT HAVE VISUALIZED T HAT THE INDIVIDUAL LIABILITY WOULD BE FASTENED ON HIM. IT IS ALSO FOUND BY THE T RIBUNAL THAT THE ASSESSEE FAIRLY DEPOSITED A SUM OF RS. 90,00,000 BY WAY OF S ELF-ASSESSMENT ON AUGUST 6, 2001, BEFORE THE DATE OF FILING THE RETURN WHICH AL SO PROVED THE BONA FIDE CREDENTIALS OF THE ASSESSEE. ON THE ABOVE TWO GROUN DS, THE TRIBUNAL ACCEPTED THE CASE OF THE ASSESSEE THAT THE ASSESSEE IS NOT S UBJECT TO ADVANCE TAX. FINDINGS GIVEN BY THE TRIBUNAL ARE BASED ON VALID M ATERIALS AND EVIDENCE AND WE DO NOT FIND ANY ERROR OR LEGAL INFIRMITY IN THE ORDER OF THE TRIBUNAL SO AS TO WARRANT INTERFERENCE. 10. IN VIEW OF THE ABOVE BINDING PRECEDENTS, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LEVYING THE INTEREST U/S.234B OF THE ACT, WHEN THE LIABILITY TO PAY THE TAX IS DUE TO RETROSPECTIVE AMENDMENT IN THE PROVISIONS OF SECTIO N 115JB OF THE ACT. HENCE, THE ASSESSING OFFICER IS HEREBY DIRECTED TO DELETE THE SAME. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( ) ( %) ! ' ' ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 05/ 09 /2014 8.., .../ T.C. NAIR, SR. PS ITA NO.1113/AHD /2011 D.B. CORP. LTD.VS. ITO ASST.YEAR 2007-08 - 23 - 5 1 .9 : 9) 5 1 .9 : 9) 5 1 .9 : 9) 5 1 .9 : 9)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. $$ ; / CONCERNED CIT 4. ;() / THE CIT(A)-VI, AHMEDABAD 5. 9%< . , , / DR, ITAT, AHMEDABAD 6. <=( >2 / GUARD FILE. 5 5 5 5 / BY ORDER, /9 . //TRUE COPY// ? ?? ?/ // / $+ $+ $+ $+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 28.8.14&2.9.14(DICTATION-PAD 23- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 4.9.14 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BA CK TO THE SR.P.S./P.S.05/09/14 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 05/09/14 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER