9911796707
TMI Blog2014 (10) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... i Rajan Vora Mr. Nikhil Tiwari O R D E R PER D. KARUNAKARA RAO, AM: This appeal filed by the Revenue on 12.5.2008 is against the order of the CIT (A)-XXXII, Mumbai dated 25.1.2008 for the assessment year 2003-2004. 2. During the proceedings before us, at the outset, Shri Rajan Vora Mr. Nikhil Tiwari, Ld Counsels for the assessee mentioned that this is the second round of the proceedings before the Tribunal. In the first round, the Revenue‟s appeal with its 5 grounds was adjudicated by the Tribunal and the appeal was partly allowed vide ITA No.3279/M/2008, order dated 25.5.2012. The matter travelled to the Hon ble High Court and the issue relating to the allowability of depreciation on goodwill, raised in ground no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal for fresh decision on merits and in accordance with law. 3. The appeal is accordingly disposed of in above terms with no order of costs. 4. Before us, as per the Ld Counsel, since the Hon ble High Court has quashed the finding of the Tribunal on this issue and directed the Tribunal to decide the same in the light of the ratio of the Apex Court judgment in the case of Smifs Securities Limited [348 ITR 302 (SC)], the claim of the assessee is required to be allowed in full. Further, elaborating on the direction of the Hon ble High Court relating to the fresh decision on merits and in accordance with law , on the issue of the very nature of the goodwill , Ld Counsel for the assessee mentioned that there is no dispute on the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld rely on the book values only and should not consider the market values of the assets in question. In this regard, Ld Counsel read out the following from page 23 of the said judgment. The court has discretion and power to reject a scheme even if all the shareholders and creditors have agreed to it. But once the scheme is scrutinized by the company Court and sanctioned by an order made by it under section 391 of the Companies Act, it ceases to retain the character of contract and operates by force of the statute . For the above, the Hon ble High Court relied on the judgment of the Hon ble Supreme Court in the case of J.K. (Bombay) Pvt. Ltd vs. New Kaiser-I-Hind Spinning Weaving Co. Ltd (1970) 40 Comp Cas 689. Thus, it is the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goodwill is now eligible for depreciation. Relevant portion from the said Supreme Court judgment reads as under: Taxpayer had acquired a capital asset in the form of goodwill pursuant to amalgamation. Further, the SC in a brief order observed that the words any other business or commercial rights of similar nature in clause (b) of Explanation 3 to section 32 indicates that goodwill would fall under the expression any other business or commercial right of a similar nature‟. The principle of ejusdem generis would strictly apply while interpreting the said expression which finds place in Explanation (b). In the circumstances, we are of the view that Goodwill‟ is an asset under Explanation 3(b) to section 32(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
