The Tax Publishers2022 TaxPub(DT) 4570 (Chen-Trib) : (2022) 098 ITR (Trib) 0105

INCOME TAX ACT,1961

Section 263, 32(1) 5th Proviso

There was no goodwill in the books of account of amalgamating company and further, goodwill was acquired by amalgamated company by paying consideration over and above net value of assets at amalgamating company. Therefore, in the given facts and circumstances of the case, 5th proviso to section 32(1) had no application and further, in absence of any other possible view, view taken by AO while allowing depreciation on goodwill in the assessment proceedings, could not be held to be erroneous and prejudicial.

Revision under section 263 - Erroneous and prejudicial order - AO allowed depreciation claimed on goodwill arising out of amalgamation -

Pr. CIT treated assessment order passed by AO as erroneous, and prejudicial to the interests of revenue on account of AO having allowed depreciation claimed on goodwill arising out of amalgamation though 5th proviso to section 32(1) very clearly restricted claim of depreciation to successor company on amalgamation, as if such succession had not taken place. Held: There was no goodwill in the books of account of amalgamating company and further, goodwill was acquired by amalgamated company by paying consideration over and above net value of assets at amalgamating company. Therefore, in the given facts and circumstances of the case, 5th proviso to section 32(1) had no application and further, in absence of any other possible view, view taken by AO while allowing depreciation on goodwill in the assessment proceedings, could not be held to be erroneous and prejudicial.

Relied:Malabar Industrial Co. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), M/s. Altimetrik India Pvt. Ltd. v. DCIT (2022) 137 taxmann.com 9 (Bang) : 2022 TaxPub(DT) 3412 (Bang-Trib), CIT v. Max India Ltd. (2007) 295 ITR 282 (SC) : 2007 TaxPub(DT) 1548 (SC), United Breweries Ltd. v. Addl. CIT [722/Bang/2014, 801/Bang/2014, 1065/Bang/2014, 1066/Bang/2014, dt. 30-9-2016] Applied:CIT, Kolkata v. Smifs Securities Ltd. (2012) 348 ITR 302 (SC) : 2012 TaxPub(DT) 2430 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16



IN THE ITAT, CHENNAI BENCH

V. DURGA RAO, J.M. & G. MANJUNATHA, A.M.

Trivitron Healthcare (P). Ltd. v. Pr. CIT

I.T.A. No. 97/Chny/2021

24 June, 2022

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