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DATE: August 11, 2015 (Date of pronouncement)
DATE: August 21, 2015 (Date of publication)
AY: 2009-10
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CITATION:
S. 40(b)(v): Provision in partnership deed for payment of salary at percentage share of profits multiplied by “allocable profits” is valid and entitles claim for deduction. S. 37(1): Contribution by law firm to IFA to create awareness of its activities is business expenditure

A plain reading of Clause 6(a) leads us to a conclusion that the term ‘allocable profits’ was used to mean ‘book profits’ as used in Section 40(b)(v) of the Act or otherwise the reference to the section in the Clause has no meaning. When the partners have understood and meant that the word “allocable profits” to mean surplus/book profits, prior to calculation of partners’ remuneration, and when such an understanding is manifest in its actions, we do not see any reason why the Revenue authorities should not understand this term in the same sense

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DATE: July 24, 2015 (Date of pronouncement)
DATE: July 27, 2015 (Date of publication)
AY: 1989-90, 1991-92
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CITATION:
S. 32: A licensee who is in full control of the building and can exercise the rights of the owner in his own right is entitled to depreciation

The very concept of depreciation suggests that the tax benefit on account of depreciation legitimately belongs to one who has invested in the capital asset, is utilizing the capital asset and thereby loosing gradually investment caused by wear and tear, and would need to replace the same by having lost its value fully over a period of time

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DATE: July 3, 2015 (Date of pronouncement)
DATE: July 15, 2015 (Date of publication)
AY: 2008-09, 2009-10, 2010-11
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CITATION:
S. 37(1): The very nature of a license agreement is that it is not of a permanent nature. The fact that the payment is spread over a period of 10 yearst does not make the assessee the owner of the technical knowhow. The payment is not of an enduring nature

Although the payment is spread over a period of 10 years, it does not make the Assessee the owner of the technical knowhow. The very nature of the license agreement is that it is not of a permanent nature. The benefit to the Assessee as a result of payment of royalty for technical knowhow was not of an enduring nature, and therefore cannot be construed to be a capital expenditure

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