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TMI Blog2019 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, we are of the view that 'Goodwill' is an asset under Explanation 3(b) to Section 32(1) - Decided against revenue - ITA No. 42/Bang/2017 - - - Dated:- 28-6-2019 - Shri Arun Kumar Garodia, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Assessee : Smt. Shreya Loyalka, CA For the Revenue : Shri K.N. Dhandapani, JCIT (DR) ORDER PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER This appeal is filed by the revenue and the same is directed against the order of ld. CIT(A)-7, Bangalore dated 07.10.2016 for Assessment Year 2011-12. 2. The grounds raised by the revenue are as under. 1. The order of the learned CIT(A) is opposed to law and facts of the case. 2. Whether on the facts and circumstances of the case the CIT(A) is justified in law in not considering that the business transferred to M/s. VF has been basically with all its divisions and operations other than the operation of Factory and the Exclusive Brand Outlets [EBOs] 3. Whether on the facts and circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the revenue as reproduced above, this is the grievance of the revenue that CIT(A) has erred in allowing the claim of Depreciation on Intangible assets and as per Ground No. 5, this is the grievance of the revenue that CIT(A) has erred in allowing the claim of Depreciation on Goodwill to the assessee company without taking into consideration the landmark judgment of the Hon ble Apex Court in the case of Goetze (India) Ltd. vs. CIT as reported in 284 ITR 323. But in this regard, we find no merit in this objection of revenue because as per the same judgment of Hon ble Apex Court, it is noted in that case also that fresh claim was raised by assessee before the AO without filing any revised return of income and the same was rejected by the AO but when the assessee carried the matter in appeal before CIT(A), the claim of the assessee was allowed by CIT(A). Against this order of CIT(A), the revenue filed appeal before the Tribunal and the Tribunal approved the AO s order and when this matter reached to Hon ble Apex Court, it was held by Hon ble Apex Court in this case that the AO cannot allow a fresh claim which is not raised by assessee by filing revised return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t] has come to the conclusion that the authorised representatives had filed copies of the Orders of the High Court ordering amalgamation of the above two Companies; that the assets and liabilities of M/s. YSN Shares and Securities Private Limited were transferred to the assessee for a consideration; that the difference between the cost of an asset and the amount paid constituted goodwill and that the assessee-Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee-Company stood increased. This finding has also been upheld by Income Tax Appellate Tribunal ['ITAT', for short]. We see no reason to interfere with the factual finding. 7. One more aspect which needs to be mentioned is that, against the decision of ITAT, the Revenue had preferred an appeal to the High Court in which it had raised only the question as to whether goodwill is an asset under Section 32 of the Act. In the circumstances, before the High Court, the Revenue did not file an appeal on the finding of fact referred to hereinabove. 8. For the afore-stated reasons, we answer Question No.[b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The order under Section 143(3) for the assessment year 20032004 continues to operate and no proceedings under the Act were initiated to disturb the same. 12.3 We also note that the Ld. DR have not brought anything on records suggesting that any action against the assessee was taken under section 147 of the Act on account of escapement of income. 12.4 In view of above there remains no ambiguity that the assessee is eligible for the depreciation in respect of the intangible assets as discussed above. Accordingly, we do not find any reason to interfere in the order of Ld. CIT(A). 12.5. Thus, the ground of appeal of the Revenue is dismissed. 6. Regarding the assessee s claim for depreciation on goodwill, para nos. 17 17.1 of this Tribunal order are relevant in this regard and hence, these paras are also reproduced hereinbelow for ready reference. 17. The 2nd controversy arises whether the depreciation is eligible for deduction on the goodwill acquired by the assessee. In this regard we note that the Hon ble Supreme Court has settled the issue of depreciation on goodwill in the case discus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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