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TMI Blog2009 (5) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds:- "A) Order Passed Under Section 263 Is Invalid and Bad-Law:- Order passed by the Commissioner of Income Tax Act enhancing/modifying the order passed by the Deputy Commissioner of Income Tax under section 143(3) for the Assessment Year 2001-2002 is invalid and bad-in-law and requires to be cancelled since,- i) the Income tax Assessment order passed by the Deputy Commissioner of Income tax-Pune under section 143(3) allowing depreciation on WDV of Goodwill (an Intangible asset) based on thorough scrutiny of facts and allowability conaldorod as per the provisions of Income tax Act in earlier years, is not erroneous. ii) Income tax Assessment order under section 143(3) passed deferring the deduction of Goodwill as revenue expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Differential premium paid to MIDC ₹ 9,44,272 Total Rs.1,57,76,572 By agreement for sale Greaves Limited sold to us entire undertaking for total consideration of ₹ 28 Crores which includes amount paid of ₹ 1,141,26,000/- rights in land given on lease at Baramati. As desired by you we attach herewith copy of agreement between MIDC and Greaves Limited and subsequent agreement of transfer rights to Piaggio Greaves Vehicles Ltd. (now Known as Piaggio Vehicles Pvt. Ltd.) Intangible asset has boon defined in International Accounting Standards (IAS 38) as under:- "Identifiable asset without any physical substances hold for use in production or supply of goods or services, for rental to others or for administrative purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer disallowed the depreciation on leasehold rights and set out elaborate reasons of doing so. However, so far as deprecation on goodwill was concerned, the Assessing Officer did not make any comments on the submissions of the assesses and granted the depreciation. 5. The matter, however, did not rest there. 6. On 21st October 2006, learned Commissioner issued a show cause notice requiring the assessee to show cause as to why the assessment order dated 16th January 2004 not be revised as granting of depreciation on goodwill rendered the order erroneous and prejudicial to the interests of the revenue. The objections raised by the assessee were rejected primarily on the ground that there is no evidence about application of mind on the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court in the case of Gee Vee Enterprises vs. Addl. CIT (99 ITR 375), even an inertia of the Assessing Officer in examining a claim, when he ought to have examined the same does render the assessment order erroneous. However, as far as situation before us is concerned, we have noted that the Assessing Officer had detailed explanation of the claim of depreciation on goodwill before him and that the same claim was allowed in the earlier years. There was no change in the facts of the case nor there was slightest change in legal position in this year vis-a-vis the earlier years in which claim was allowed. As regards Assessing Officer not commenting upon the legality of claim, we have noted that the Assessing Officer examined the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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