ITO 1(1)2, MUMBAI v. M/S COX & KINGS(INDIA) PVT LTD, MUMBAI

ITA 4165/MUM/2007 | 2003-2004
Pronouncement Date: 28-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 416519914 RSA 2007
Assessee PAN AAACC1921B
Bench Mumbai
Appeal Number ITA 4165/MUM/2007
Duration Of Justice 3 year(s) 7 month(s) 28 day(s)
Appellant ITO 1(1)2, MUMBAI
Respondent M/S COX & KINGS(INDIA) PVT LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted L
Date Of Final Hearing 13-01-2011
Next Hearing Date 13-01-2011
Assessment Year 2003-2004
Appeal Filed On 31-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L : MUMBAI BEFORE SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI VIJAYPAL RAO JUDICIAL MEMBER ITA. NO. 3751/MUM/2007 ASSESSMENT YEAR 2003-2004 M/S. COX & KINGS (INDIA) PVT. LTD. (FORMERLY KNOWN AS COX & KINGS (INDIA) PVT. LTD.) MUMBAI 400 023 PAN AAACC1921B VS. ITO 1 (1) (2) MUMBAI 400 020 (APPELLANT) (RESPONDENT) ITA. NO.4165/MUM/2007 ASSESSMENT YEAR 2003-2004 ITO 1 (1) (2) MUMBAI 400 020 VS. M/S. COX & KINGS (INDIA) PVT. LTD. (FORMERLY KNOWN AS COX & KINGS (INDIA) PVT. LTD.) MUMBAI 400 023 PAN AAACC1921B (APPELLANT) (RESPONDENT) FOR ASSESSEE : S/SHRI RAJAN R. VORA & SHEETAL SH AH FOR REVENUE : SHRI NARENDER SINGH CIT-DR. ORDER PER J.SUDHAKAR REDDY A.M. 1. THESE ARE CROSS-APPEALS AND ARE DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 MUMBAI DATED 30-3-2007 FOR THE ASSESSMENT YEAR 2003-2004. 2. THE FACTS IN BRIEF. THE ASSESSEE IS A COMPANY A ND IS CARRYING ON THE BUSINESS OF TRAVEL AND TOUR OPERATO RS IN ADDITION TO FOREIGN CURRENCY EXCHANGE. IT RENDERED SERVICES TO TOURIST FROM INDIA AS WELL AS ABROAD. IT FILED ITS RETURN OF INCOME ON 11-2-2003 DECLARED TOTAL LOSS AS PER NORMAL COMPUTATION AT RS.1 16 05 380/-. HOWEVER BOOK PROFIT UNDER SECTION 115JB WAS OFFERED AT RS.1 05 71 960/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SE CTION 143 (3) OF 2 THE ACT ON 27-3-2006 INTER ALIA DISALLOWING CERTA IN EXPENDITURE ON ACCOUNT OF ADVERTISEMENT ON ACCOUNT OF INTEREST AD VANCES GIVEN TO M/S. EZEEGO MAKING AN ADDITION ON ACCOUNT OF SUNDR Y BALANCES WRITTEN OFF SUNDRY CREDITORS OF SOFTWARE DEVELOPME NT ETC. HE DISALLOWED AS CAPITAL EXPENDITURE SOFTWARE EXPENSE S AND ALSO DISALLOWED DEPRECIATION OF INTANGIBLE ASSETS. ADJUS TMENT WAS MADE UNDER SECTION 92CA(3) OF THE ACT. HE ASSESSED INCOM E AT RS.6 10 77 830/-. 3. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEA L. THE FIRST APPELLATE AUTHORITY GRANTED PART RELIEF. ON THE ISS UES WHERE THE FIRST APPELLATE AUTHORITY HAS GRANTED PART RELIEF THE RE VENUE HAS FILED APPEAL AND ON THE ISSUES WHERE THE CIT(A) CONFIRME D THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE HAS FILED AN APPEAL . WE TAKE-UP THE ISSUES IN SERIATIM. 4. WE HAVE HEARD MR. RAJAN R. VORA ALONG WITH MS. SHEETAL SHAH ON BEHALF OF THE ASSESSEE AND SHRI NARENDRA SI NGH LEARNED CIT- DR ON BEHALF OF THE REVENUE. ON CAREFUL CONSIDERATI ON OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITED WE HOLD AS FOLLOWS. 5. ASSESSEES APPEAL ITA.NO. 3751/MUM/2007 : GROUND NOS. 1 AND 2 PERTAINS TO PART DISALLOWANCE OF ADVER TISEMENT EXPENDITURE. THE FIRST APPELLATE AUTHORITY DEALT WI TH THE ISSUE AND AT PAGE 4 PARA 6.4 FOLLOWED HIS PREDECESSORS ORDER ON THE VERY SAME ISSUE FOR THE ASSESSMENT YEAR 2002-2003 ; WHILE HOL DING THAT THE ADVERTISEMENT EXPENDITURE IS BUSINESS EXPENDITURE THE FIRST APPELLATE AUTHORITY DIRECTED THAT THE EXPENDITURE OF THE LAST QUARTER SHOULD BE DISALLOWED ON THE BASIS OF DATE OF RELEASE OF THE ADVERTISEMENTS. BOTH PARTIES SUBMITTED THAT THE ISSUE FOR THE EARLIER AS SESSMENT YEARS HAS COME UP BEFORE L BENCH OF THE TRIBUNAL IN ITA. NO . 982/MUM/2007 AND ITA. NO. 1937/MUM/2007 ORDER DATED 20 TH AUGUST 2010 AND THE 3 TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE. AT PARAS 15 AND 16 OF THAT ORDER THE TRIBUNAL HELD AS FOLLOWS : 15 CONSIDERING THE FACTS PERTAINING TO THE ISSUE WE ARE OF THE OPINION THAT THE LD CIT(A) HAS RIGHTLY ALLOWED THE TOTAL EXPENDITURE TO THE EXTENT OF ` .5 39 42 311/- IN THIS YEAR AS REVENUE EXPENDITURE. 16 SO FAR AS THE GRIEVANCE OF THE ASSESSEE IS CONCERNED I.E. IN RESPECT OF ` .23 58 361/- WHICH WAS TREATED AS EXPENDITURE NOT RELATING TO AY 2001-02 IN OUR OPINION SO FAR AS THE EXPENDITURE OF ` .22 00 219/- IS CONCERNED AS THE SAME IS INCURRED IN THE AY 2002-03; THEREFORE THE SAME SHOULD BE ALLOWED TREATING IT AS REVENUE EXPENDITURE AS NOTHING IS ON RECORD TO SHOW THAT THE SAID EXPENDITURE WAS INCURRED FOR PROCURING THE BUSINESS FOR THE NEXT YEAR. MOREOVER PROCURING THE BUSINESS IS CONTINUOUS PROCESS OF THE TOUR WORLD. IN CASE SASOON DAVID V/S CIT ( 118 ITR 261 ) TH E HONBLE SUPREME COURT WHILE INTERPRETING THE EXPRESSION WHOLLY AND EXCLUSIVELY AS APPEARING IN SEC. 10(2) (XV) 1922 ACT WHICH IS ANALOGOUS T O SEC. 37(1) HELD THAT THE EXPENDITURE MAY BE INCURRED VOLUNTARILY AND FOR PROMOTING THE BUSINESS FOR EARNING THE PROFITS AND THE ASSESSEE CAN CLAIM DEDUCTION EVEN THOUGH THERE WAS NO NECESSITY TO INCUR SUCH EXPENDITURE. NOTHING IS THERE ON RECORD TO SHOW THAT THE EXPENDITURE WAS INCURRED FOR PROCURING THE BUSINESS IN THE NEXT YEAR. WE THEREFORE ALLOW THE GROUND OF THE ASSESSEE TO THE EXTENT OF BY GIVING RELIEF OF ` .22 00 219/-. ACCORDINGLY THE RELEVANT GROUNDS 4 RAISED BY THE ASSESSEE ARE PARTLY ALLOWED AND THAT OF THE REVENUE ARE DISMISSED. 6. RESPECTFULLY FOLLOWING THE SAME WE ALLOW GROUN D NOS. 1 AND 2 OF THE ASSESSEES APPEAL. COMING TO GROUND NO S. 3 TO 5 THE ISSUE PERTAINS TO DISALLOWANCE OF INTEREST ON ADVAN CES TO ASSOCIATE COMPANY AMOUNTING TO RS.33 64 187/-. THIS BENCH OF THE TRIBUNAL IN THE EARLIER YEAR ORDERS CITED ABOVE IN ASSESSEES OWN CASE ON THE SAME ISSUE FOR THE ASSESSMENT YEAR 2002-2003 AT PARA 24 HELD AS FOLLOWS : 24 ON RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE NEEDS RECONSIDERATION. THOUGH THE ASSESSEE HAS TAKEN A PLEA THAT ON COMMERCIAL EXPEDIENCY ADVANCES WERE GIVEN TO M/S EZEEGO WHICH IS A SUBSIDIARY COMPANY OF THE ASSESSEE AND ALSO BUSINESS SHARING AGREEMENT WITH THE ASSESSEE COMPANY. THE ASSESSEE HAS ALSO TAKEN A PLEA THAT THE ADVANCES WERE MADE FROM INTEREST BEARING FUNDS. WE ARE NOT IN AGREEMENT WITH THE ASSESSEE; AS ADMITTEDLY THE ASSESSEE HAS PAID HUGE AMOUNT OF INTEREST ON THE BORROWINGS; BUT AT THE SAME TIME WE CONSIDER IT FIT TO RESTORE THIS ISSUE TO THE FIL E OF THE AO FOR FRESH ADJUDICATION TO EXAMINE AFRESH WHETHER THERE WAS COMMERCIAL EXPEDIENCY FOR MAKING PAYMENTS/ADVANCES ON BEHALF OF M/S EZEEGO AS RELEVANT EVIDENCE IS NOT BEFORE US. ACCORDINGLY THE RELEVANT GROUND NOS.11 TO 13 ARE ALLOWED FOR STATISTICAL PURPOSE. 7. CONSISTENT WITH THE VIEW TAKEN THEREIN WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION. 5 8. COMING TO GROUND NO.6 THE FIRST ADDITION PERTA INS TO SUNDRY BALANCES WRITTEN OFF. THE DETAILS OF THE SUN DRY BALANCES ARE AS FOLLOWS : SL. NO. PARTICULARS AMOUNT (INR) 1. TDS AMOUNT WRITTEN OFF 40 164 2. BILLS FOR WHICH INCOME WAS OFFERED TO TAX 411 91 9 3. AMOUNT PAID EARLIER DURING THE COURSE OF BUSINESS NOT RECOVERABLE 84 030 4. OFFICE RUNNING EXPENSES WRITTEN OFF 36 787 TOTAL 572 900 9. ON PERUSAL OF THE ABOVE EXCEPT 4 TDS AMOUNTS W RITTEN OFF THE OTHER ITEMS I.E. BILLS FOR WHICH INCOME H AS BEEN OFFERED TO TAX ETC. HAD TO BE ALLOWED AS THEY ARE BUSINESS EXPEND ITURE. THE AMOUNTS WRITTEN OFF DURING THE YEAR COMPRISED OF SMALL DEBI T BALANCES WHICH WERE BILLS RECEIVABLE FOR CUSTOMERS AND ADVANCES GI VEN TO SUPPLIERS AGENTS. THE MAJOR PORTION OF RS.4 11 919/- PERTAIN S TO THE BILLS RECEIVABLE FROM CUSTOMERS FOR WHICH INCOME HAS ALR EADY BEEN OFFERED FOR TAXATION. AS REGARDS FURTHER 2 ITEMS THEY PERT AIN TO PAYMENTS OF ADVANCES TO VARIOUS PARTIES DURING THE COURSE OF AN D FOR THE PURPOSE OF BUSINESS. WHEN ONCE THEY BECOME IRREVOCABLE THE Y SHOULD BE ALLOWED AS LOSS INCURRED BY THE ASSESSEE UNDER SECT ION 28 ITSELF. THUS EXCEPT FOR THE AMOUNT OF RS.40 164/- WHICH PERTAIN S TO TDS AMOUNT WRITTEN OFF THE OTHER CLAIM OF THE ASSESSEE ARE AL LOWED AS THE SAME ARE WRITTEN OFF AS IRREVOCABLE. 10. COMING TO THE DISALLOWANCE OF BAD DEBTS THE I SSUE NOW STANDS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINS T THE REVENUE BY THE DECISION OF THE SUPREME COURT IN THE CASE OF TR F LIMITED 230 CTR 14 (SC). RESPECTFULLY FOLLOWING THE SAME WE DISMIS S THIS GROUND OF REVENUE. 6 11. GROUND NO.2 OF THE DEPARTMENTAL APPEAL (ITA. N O. 4165/M/2007) IS ALSO ON THE SAME ISSUE AND FOR THE SAME REASONS IT IS DISMISSED. 12. GROUND NOS. 7 AND 8 ARE DISMISSED AS NOT PRESS ED. THEREFORE THE DIRECTION GIVEN BY THE CIT(A) CALL F OR NO INTERFERENCE. 13. COMING TO GROUND NO.9 THE ASSESSEES CONTENTI ON IS THAT DISCOUNT IN QUESTION WAS EARNED BY THE ASSESSEE IN RELATION TO PURCHASE OF A CAPITAL ASSET AND HENCE IT IS NOT IN COME BUT AT BEST WOULD GO TO REDUCE THE COST OF THE CAPITAL ASSET. ADMITTEDLY THE FACTS OF THIS ISSUE HAVE NOT BEEN PROPERLY VERIFIED. WE THEREFORE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 14. THE NEXT ISSUE IS ADJUSTMENT MADE UNDER SECTIO N 92CA. BOTH THE PARTIES SUBMITTED THAT SIMILAR ISSUE HAS C OME UP BEFORE THIS BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2002-2003 AND THE BENCH HAS SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE TRIBU NAL AT PARA 11 HELD AS FOLLOWS : 11 THE LD CIT(A) HAS OBSERVED THAT THE TPO HAS WRO NGLY CALCULATED THE WEIGHTED AVERAGE PERIOD OF 100 DAYS THAT IS ENJOYED BY THE UNRELATED PARTIES AND THIS F ACT REMAIN UNCONTROVERTED. MOREOVER AS PER THE FACTS O N RECORD WEIGHTED AVERAGE CREDIT PERIOD IN CASE OF C OX & KINGS UK IS AT 74 DAYS COX & KINGS USA IS AT 103.5 DAYS AND COX & KINGS JAPAN IS AT 194 DAYS. HENCE WORKING MADE BY THE TPO AT LEAST IN RESPECT OF AE UK AND AE USA IS LESS THAN 12 DAYS THAN UNRELATED AE OF GERMANY. BUT SO FAR AS THE AE JAPAN IS CONCERNED THE ASSESSEE HAS ALLOWED EXCESS PERIOD OF 74 DAYS AS THE LD CIT(A) HAS WORKED OUT THE AVERAGE PERIOD AT 12 DAYS. WE 7 THEREFORE OF THE OPINION THAT THE EXCESS AVERAGE CREDIT PERIOD DETERMINED BY THE LD. CIT(A) IS CORRE CT AND DOES NOT NEED ANY INTERFERENCE. NOW THE NEXT ISSUE REMAINS WHETHER ADDITION CAN BE SUSTAINED TO THE EXTENT WORKED OUT BY THE LD. CIT(A)? NOW THE FUNDAMENTAL QUESTION IS WHETHER THE ADJUSTMENT IS TO BE MADE ON STANDALONE BASIS OR BEFORE COMPARING MARGIN ON THE TRANSACTIONS WITH AES VIZ-A-VIZ UNRELATED PARTIES. IF LATER IS FOLLOWED ONLY SUCH ADJUSTMENT CAN BE MADE AS ARE IN THE EXCESS OF THE MARGIN ON TRANSACTIONS WITH AES MINUS AFTER ADJUSTMENT IN RESPECT OF THE CREDIT PERIOD. A PLA IN READING OF RULE 10B(1)(E)(III) WOULD SUGGEST THAT T HE ADJUSTMENT IS TO BE MADE BEFORE COMPARISON AND IT IS NOT THAT THE VARIATIONS ARE TO BE ADJUSTED SEPARATELY. ON THE PERUSAL OF THE ORDER OF THE TPO AS WELL AS LD CIT(A) IT IS SEEN THAT THERE IS NO F INDING THAT THE MARGINS ON TRANSACTIONS WITH AES AFTER ADJUSTMENT IN RESPECT OF THE CREDIT PERIOD IS LESS THAN THE MARGIN ON THE TRANSACTIONS WITH AES OR UNRELATED PARTIES. WE THEREFORE CONSIDER IT FIT T O REMAND THE ISSUE TO FILE OF THE ASSESSING OFFICER T O THE EXTENT OF THE ADDITION SUSTAINED BY THE LD CIT( A) TO DEICIDE THE SAME IN THE ABOVE TERMS. ACCORDINGL Y THIS ISSUE IS PARTLY ALLOWED FOR STATISTICAL PURPOS E IN BOTH THE APPEALS. 15. CONSISTENT WITH THE VIEW TAKEN THEREIN WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION IN ACCORDANCE WITH LAW. 8 16. GROUND NOS. 13 AND 14 ON THE ISSUE OF NON-GRAN T OF DEPRECIATION ON INTANGIBLE ASSETS ; THE ASSESSEES SUBMISSIONS ARE AS FOLLOWS : 8.4. IT IS SUBMITTED THAT AS PER BUSINESS TRANSFER AGREEMENT (BTA) BETWEEN ASSESSEE AND TULIP STAR HOTELS LIMITED DATED 19 TH DECEMBER 2002 (COPY OF BUSINESS TRANSFER AGREEMENT IS ENCLOSED AT PG. NO. 191 TO 209 OF THE PAPER BOOK) THE ASSESSEE ACQUIRED THE BUSINESS UNDERTAKING WHICH WOULD INCLUDE THE FOLLOWING ASSETS : ACQUIRED BUSINESS PROPERTY ASSUMED TAXES & LIABILITY ACQUIRED BUSINESS CONTRACTS ACQUIRED BUSINESS DATABASE ACQUIRED BUSINESS BOOKS & RECORDS AND ALL INSURANCE POLICIES RELATING TO ACQUIRED BUSINES S UNDERTAKING. 8.5. IT IS SUBMITTED THAT ASSESSEE HAS CARRIED OUT VALUATION FOR THE PHYSICAL ASSETS TAKEN OVER BY RAY & RAY CHARTERED ACCOUNTANT (COPY OF VALUATION REPORT IS ENCLOSED AT PG. NO. 207 AND 208 OF THE PAPER BOOK). HOWEVER AS EVIDENT FROM BTA APART FROM PHYSICAL ASSETS THE ASSESSEE ALSO TOOK OVER VARIOUS OTHER INTANGIBLE ASSETS LIKE BUSINESS DATABASE ETC. AND THE CONSIDERATION OVER AND ABOVE THE PHYSICAL ASSETS WAS PAID TOWARDS SUCH INTANGIBLE ASSETS. THE ASSESSEE HAS SHOWN THIS ASSET SPECIFICALLY IN THE FIXED ASSET SCHEDULE UNDE R THE HEAD CUSTOMER DATABASE. (COPY OF FIXED ASSET SCHEDULE IS ENCLOSED AT PAGE NO. 41 OF THE PAPER BOOK). 9 8.6. IT IS SUBMITTED THAT ASSESSEE HAS RECEIVED THE VALUABLE INFORMATION IN THE FORM OF CUSTOMER DATABASE AND OTHER RELATED INFORMATION WHICH WAS ESSENTIAL FOR ASSESSEE TO CARRY ON THE BUSINESS. HENCE THE CUSTOMER DATABASE PURCHASED BY THE ASSESSEE IS A BUSINESS OR COMMERCIAL RIGHTS TAKEN OVER TO RUN ITS BUSINESS EFFECTIVELY AND PROFITABLY . IT IS TO BE NOTED THAT CUSTOMER DATABASE IS AN INTANGIBLE ASSET FOR THE ASSESSEE TO CARRY ON THE BUSINESS. SECTION 32 (1) (II) OF THE ACT DEFINES INTANGIBLE ASSET AS:- KNOW-HOW PATENT COPYRIGHT TRADEMARK LICENSES FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. 8.7. IT IS BE EVIDENT FROM THE ABOVE DEFINITION THAT INTANGIBLE ASSET INCLUDES ANY OTHER BUSINESS OR COMMERCIAL RIGHTS. IT IS SUBMITTED THAT CUSTOMER DATABASE IS A BUSINESS RIGHT ACQUIRED BY THE ASSESSEE TO RUN ITS BUSINESS EFFECTIVELY AND PROFITABLY. HENCE IN VIEW OF THIS THE CUSTOMER DATABASE SHOULD BE TREATED AS INTANGIBLE ASSET AND DEPRECIATION UNDER SECTION 32(1)(II) OF THE ACT SHO ULD BE ALLOWED TO ASSESSEE. 8.8. IN THIS REGARD IT IS ALSO SUBMITTED THAT VARIOUS COURTS AND TRIBUNALS HAVE HELD THAT RIGHT OBTAINED FOR CARRYING ON THE BUSINESS MORE EFFECTIVELY AND PROFITABLY HAS TO BE FALL WITHIN THE MEANING OF INTANGIBLE ASSET. IN THIS REGARD RELIANCE IS PLACE D ON THE DECISION OF APEX COURT IN THE CASE OF TECHNO SHARES & STOCK LIMITED 327 ITR 323 (COPY OF DECISION IS ENCLOSED AT PAGE NO. 217 TO 218 OF THE PAPER BOOK) HAS HELD THAT RIGHTS OF MEMBERSHIP OF 10 BOMBAY STOCK EXCHANGE WAS A BUSINESS OR COMMERCIAL RIGHT AND WAS A LICENSE OR AKIN TO A LICENSE WHICH FALLS UNDER SECTION 32(1)(II) OF THE ACT AND WAS ENTITLED FOR DEPRECIATION UNDER THE BLOCK O F ASSET INTANGIBLE ASSETS. 8.9. FURTHER RELIANCE IS ALSO PLACED ON THE DECISION OF MUMBAI TRIBUNAL IN THE CASE OF KOTAK FOREX BROKERAGE LTD. 131 TTJ 404 (COPY OF DECISION IS ENCLOSED AT PAGE NO. 219 TO 220 OF THE PAPER BOOK) WHEREIN THE MUMBAI TRIBUNAL HAVE HELD THAT ANY RIGHT OBTAINED FOR CARRYING BUSINESS EFFECTIVELY AN D PROFITABLE HAS TO BE FALL WITHIN THE MEANING OF INTANGIBLE ASSET UNDER THE HEAD BUSINESS OR COMMERCIAL RIGHTS. IN THIS CASE THE ASSESSEE HAS ACQUIRED THE NAME KOTAK WHICH HAS THE COMMERCIAL VALUE. THE TERM BUSINESS OR COMMERCIAL RIGHTS ARE RIGHTS OBTAINED FOR EFFECTIVELY CARRYING ON BUSINES S IN ITS FOLD. 8.10. FURTHER IT IS ALSO SUBMITTED THAT THE BANGALORE TRIBUNAL IN CASE OF BOSCH LIMITED (2009-TIOL-736- ITAT-BANG) (COPY OF DECISION IS ENCLOSED AT PAGE NO . 225 TO 233 OF THE PAPER BOOK) HAS HELD THAT DEPRECIATION IS ALLOWABLE ON BUSINESS INFORMATION UNDER THE CATEGORY OF OTHER IDENTIFIABLE INTANGIBL ES (GOODWILL). IN THIS REGARD RELIANCE IS ALSO PLACE D ON THE FOLLOWING DECISIONS WHEREIN IT HAS BEEN HELD TH AT DEPRECIATION IS ALLOWABLE ON INTANGIBLE ASSETS :- SKYLINE CATERERS (P) LTD. 116 ITD 348 (MUM) (COPY O F DECISIONIS ENCLOSED AT PG. NO. 221 TO 224 OF THE PAPER BOOK) (RIGHTS ACQUIRED BY ASSESSEE UNDER CATERING CONTRACT). A.P.PAPER MILLS LIMITED 33 DTR 148 (HYD) (COPY OF DECISION IS ENCLOSED AT PAGE NO. 234 TO 240 OF THE 11 PAPER BOOK) (EXCESS CONSIDERATION PAID BY ASSESSEE ON AMALGAMATION OVER AND ABOVE THE EXCESS OF ASSETS OVER LIABILITIES. PIEM HOTELS LIMITED 45 DTR 313 (MUM) (COPY OF DECISION IS ENCLOSED AT PAGE NO. 241 TO 243 OF PAPE R BOOK) (APPROVALS/REGISTRATION TAKEN FROM GOVERNMENT BODIES ARE GOODWILL). CLC GLOBAL LTD. (ITA. NO.2288/DEL/2008) DATED 27/3/2009 (COPY OF DECISION IS ENCLOSED AT PAGE NO. 244 TO 251 OF THE PAPER BOOK) (EXCESS CONSIDERATION OVER AND ABOVE ASSETS AND LIABILITIES). B.RAVEENDRAN PILLAI 47 DTR 81 (KER) (ASSESSEE PURCHASED HOSPITAL WITH ITS LAND BUILDING EQUIPMENTS STAFF NAME TRADEMARK AND GOODWILL AS A GOING CONCERN). 8.11. IN VIEW OF THE ABOVE LEGAL AND FACTUAL SUBMISSIONS WE HUMBLY REQUESTED YOUR HONOUR TO KINDLY DIRECT THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION AS INTANGIBLE ASSET ON THE CUSTOMER DATABASE PURCHASED BY THE ASSESSEE. 17. IN OUR CONSIDERED VIEW THE FACTUAL ISSUES HAV E NOT BEEN PROPERLY EXAMINED BY THE LOWER AUTHORITIES. THUS W E SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION IN ACCORDANCE WITH LAW AFTER CONSIDERING ALL THE FACT UAL ASPECTS AS WELL AS THE ARGUMENTS ADVANCED AS RECORDED ABOVE ON THE MATTER IN THE CORRECT PERSPECTIVE. NEEDLESS TO SAY THAT ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEARD ON THE ISSUES. 18. LAST GROUND OF THE ASSESSEES APPEAL IS ON THE LEVY OF INTEREST UNDER SECTION 234B AND 234D OF THE ACT. LE VY OF INTEREST UNDER SECTION 234B IS CONSEQUENTIAL IN NATURE. COMI NG TO LEVY OF 12 INTEREST UNDER SECTION 234D THE JURISDICTIONAL HIGH COURT IN THE CASE OF BAJAJ HINDUSTAN LIMITED IN ITA. NO. 198/2009 HAS HELD THAT LEVY OF INTEREST UNDER SECTION 234D IS APPLICABLE FROM THE ASSESSMENT YEAR 2004-2005. RESPECTFULLY FOLLOWING THE SAME WE CANC EL THE LEVY OF INTEREST UNDER SECTION 234D. IN RESULT THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 19. IN THE RESULT ITA. NO. 3751/MUM/2007 FILED BY THE ASSESSEE IS ALLOWED IN PART. 20. COMING TO THE REVENUES APPEAL ITA. NO. 4165/M /2007 ; GROUND NOS. 1 AND 2 ARE DISMISSED IN VIEW OF OUR DE CISION WHILE DISPOSING OF GROUND NOS. 1 AND 2 OF ASSESSEES APPE AL AS WELL AS GROUND NO. 6 OF ASSESSEES APPEAL. 21. COMING TO GROUND NO.3 WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHILE DISPOSING OF ALONG W ITH GROUND NOS. 10 AND 12 OF ASSESSEES APPEAL AS IT IS ON THE SAME IS SUE. WE ALLOW THIS GROUND FOR STATISTICAL PURPOSES. 22. IN THE RESULT ITA. NO. 4165/MUM/2007 FILED BY THE REVENUE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 2 8 TH DAY OF JANUARY 2011. SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED : 28 TH JANUARY 2011 VBP/- 13 COPY TO 1. M/S. COX & KINGS (INDIA) PVT. LTD. (FORMERLY KNOWN AS COX & KINGS (INDIA) PVT. LTD.) TURNER MORRISON BUILDING 16 BANK STREET FORT MUMBAI 400 023 PAN AAACC1921B 2. ITO 1 (1)-2 ROOM NO. 579 & 534 5 TH FLOOR AAYAKAR BHAVAN MK ROAD MUMBAI 400 020. 3. COMMISSIONER OF INCOME TAX (APPEALS)-1 MUMBAI 4. CIT-1 MUMBAI 5. DR L BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI