From the decision of the hon’ble Delhi High Court in the case of CIT v. Hindustan Coco Cola Beverages (P.) Ltd. [2011] 331 ITR 192 (Delhi) it is clear that ‘business or commercial rights of similar nature’ are not manufactured or produced over-night, but are brought into existence by experience and reputation. The non-compete fee is outcome of an agreement entered into between two parties.
AO is directed to give an opportunity to assessee for cross examining persons whose statements are used against assessee. The statements have been recorded from the Indian personnel and might have been examined with reference to the Indian Company, however, assessee’s contention that being a foreign company, it has a right to cross examine the persons who gave statements cannot be denied. It is already on record that assessee has made the request before AO as well as the DRP on this issue. Therefore, we direct AO to allow the assessee to cross examine the individuals whose statements were recorded and were relied upon by the Revenue so that assessee can contest/justify/accept the statements.
In the case of Cushman and Wakefield (S) Pte. Ltd. (supra), the applicant was a foreign company incorporated in Singapore. It was engaged in the business of rendering services in connection with acquisition, sales and dealings in real estate and other services such as, advisory and research facilities management, project management etc. in the field of real estate.
The payment by CRS & Sons Co. Ltd., on the basis of franchise agreement to various persons cannot be treated as payment to Directors who have substantial interest in the company and Section 2 (24) (iv) cannot be invoked.
The contention of the assessee that the payments in question were made to the builder not in the assessment year 2008-2009, but in the earlier years has been rightly rejected by the CIT because, firstly, the payments made in the earlier years if any related to purchase of flat No. B-92 on the 9th floor and not in respect of flat No.A-46 on the 4th floor. If the amounts paid on 07.03.2008 were infact paid in the earlier years, the same would have found place in the agreement dated 07.03.2008.
Learned counsel appearing for the assessee placed reliance on the decision of this court in CIT v. Ayesha Hospitals (P.) Ltd. [2007] 292 ITR 266 (Mad.), wherein in respect of the claim made for the assessment year 1991-92, the assessee claimed the amounts spent on painting, relaying of the damaged floors, partitions, etc., as revenue expenditure. On an appeal before this court by the Revenue, it was pointed out that the assessee incurred expenditure for relaying of the damaged floors, painting and partition in respect of the leased property. Referring to the decision of the apex court in CIT v. Madras Auto Service (P.) Ltd. [1998] 233 ITR 468, this court pointed out that the expenditure incurred in respect of the maintenance of the leased premises was deductible as revenue expenditure.
Section 54F is intended to encourage construction of or acquisition of residential house with the aid of the proceeds from the transfer of any long term capital asset, which is not a residencial house. The provision contemplates computing the cost of the residential building, but the value of the plot on which the farm house stands and the land appurtenant could also be considered.
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Where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair market value of the property as on the date of transfer, the Assessing Officer may refer the valuation of the relevant asset to a Valuation Officer in accordance with section 55A of the Income-tax Act.
There was a clear lack of inquiry on the part of the assessing officer once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made under section 68 of the Act.
