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TMI Blog2019 (6) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER SHAMIM YAHYA (AM) : By way of this Miscellaneous Application assessee seeks rectification of mistake apparent from record u/s. 254(2) in the order of this Tribunal in ITA No. 666/Mum/2016 vide order dated 2.5.2018. 2. We have heard both the counsel and perused the records. The submission of learned Counsel of the assessee in this regard are as under : There are certain mistakes apparent on record which requires rectification; hence the appellant prefers the said rectification application u/s 254 of the Income Tax Act, 1961. We submit as below; i) We find that the Ld. Commissioner of Income Tax (Appeals) in his order has given a clear finding that no tangible asset on account of goodwill and commercial rights and registration existed in the books of the firm before Succession. Pg.5. para.2.7 This finding is not correct and is a contradiction since the CIT(A) on pg. 6 has clearly mentioned ... it is precisely because of the fact that no consideration was paid for the intangible assets which were created on succession that depreciation was disallowed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the main balance sheet which contains a signature of Chartered Accountants and a partner of the firm. We find it is strange that when the firm has been taken over on the balances of existing as on 30.09.2009, how on 01.10.2009 in the balance sheet of the same firm, balances as on 30.09.2009 are existing and surprisingly there is a existence of unsigned Schedule E and F which were absent in the earlier balance sheet. ....Pg.6. para.2.7. a) In the first place, for the figure referred to of ₹ 63,50,000/- the correct figure is ₹ 6,35,00,000/-. b) The pages at 6 to 30 constitute the Balance Sheet drawn on commencement of 01/10/2009 which is the same as that of drawn on close of 30/09/2009. The figures are therefore the same in both the Balance Sheet. c) With regard to the observation, of Schedule E is an unsigned document is not correct. All the schedules are initialed. The unsigned schedule E F has been emphasized. In this connection attention is drawn, that, it is undisputed part that Balance sheet is duly signed. The schedules are supplement and annexures to balance Sheet and forms part of the Balance Sheet and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness assets on 30.09.2009 and 01.10.2009 were ₹ 31,00,64,900/-. Hence, there is no question of subsequent creation of intangibles. On page 11 specifically Goodwill Commercial Rights and Registrations amount of ₹ 6,35,00,000/- respectively is mentioned. On page 14 the figure of ₹ 31,00,64,900/- corroborates with the figure of 30.09.2009 which proves beyond doubt that figure of ₹ 31,00,64,900/- includes goodwill and commercial rights. On Page 50 the Premium paid and the capital is clearly reflected and the Premium amount does correspond with pg.65 of Form 2 of PB. Even legally it is therefore, submitted and stated that the existence of Intangibles as on 30/09/2009 cannot be denied as supported by the Balance Sheet of the relevant dates being 30/09/2009 01/10/2009. It is therefore stated and submitted that the denial of claim of depreciation on the question of existence of assets is incorrect. It is submitted and stated that in the scheme of things the issue and allotment of Shares as provided in section 47(xiii) for non-existent assets on the date of Succession is an impossibility. It is stated and submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we note that there is a balance sheet of M/s. Shyam Narayan Brothers, the firm which has succeeded as on 31.09.2009. In this balance sheet in fixed assets there is a mention of schedule E and F being details of business fixed asset and non business fixed asset respectively. However, we note that no such schedule has been attached. In this balance sheet there is no mention any where whatsoever about the existence of any goodwill or commercial right which has been claimed by the assessee company to have taken over. It may also be noted that in the succession agreement produced in PB pg. 68, which is dated 01.10.2009, it has been mentioned that the assets and consideration thereof are as per the balance sheet of the firm M/s. Shyam Narayan Brothers as on 30.09.2009. Hence, it is clear that as on 30.09.2009 in the balance sheet submitted of the firm in succession there was no existence of any goodwill or commercial right. Now further we note that in pages 6 to 30, the assessee has attached in the said paper book balance sheet as on 01.10.2009 of M/s. Shyam Narayan Brothers. In this balance sheet account there is an existence of fixed assets, business and non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of the said partnership firm or from documents submitted before the registrar of Companies. In such situation when no intangible asset on account of goodwill and commercial right and registration existed in the books of the partnership firm before succession, there is no question of the assessee company taking over the same and claiming depreciation their upon. In view of this factual finding the entire claim of the assessee regarding the reliance upon provisions of section 47(xiii) and the case laws doesn't support the case of the assessee in as much as there is no quarrel about the principles laid down in the Act and those case laws. However the facts of the present case are totally different as it has not been established that the assets in the form of goodwill and commercial right claimed which has been taken over were in existence in the books of the predecessors firm. We concur with the Assessing Officer that these assets were artificially created subsequent to the succession of the firm in the books of the assessee company. The only purpose of this action is to claim huge deprecation in hands of the assessee company. 5. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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