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TMI Blog2019 (7) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... n the claim of depreciation concerning AY 2012-13. By that time, the order of the CIT(A) dated 13.12.2013 was already passed. Therefore, the assessee was incapacitated to put forward such new claim towards depreciation on goodwillvfor which relevant facts are duly available on record in the light of the decision of Hon ble Supreme court in the case of Goetze (India) Ltd. vs. CIT [2006 (3) TMI 75 - SUPREME COURT] NTPC vs. CIT [1996 (12) TMI 7 - SUPREME COURT] . - Decided in favour of assessee. Disallowance u/s. 14A r.w.r. 8D - Disallowance of administrative expenditure incurred towards earning exempt income - CIT(A) has restricted the disallowance - HELD THAT:- After perusal of the material on record we observe that it is not possible to earn huge volume of exempt income without incurring administrative expenses, therefore, we do not find any unreasonableness and infirmity in the decision of Ld. CIT(A). Accordingly, the appeal of the assessee on this issue is dismissed. - I.T.A. No.1806/Ahd/2017 - - - Dated:- 12-7-2019 - Shri Mahavir Prasad, Judicial Member And Shri Amarjit Singh, Accountant Member Appellant by: Shri Biren Shah, AR Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding disallowance u/s. 14A r.w.r. 8D to the tune of ₹ 2,74,658/- when no such disallowance is called for. The same may kindly be deleted. Ground No. 1:- Disallowance u/s. 35D for ₹ 5,02,818:- 3. During the course of assessment the AO noticed that assessee has written off preliminary expenses of ₹ 5,02,818/- under Sec. 35D of the Act. The AO has observed that assessee has deducted the aforesaid preliminary expenses incurred for increasing in authorised share capital. After referring various judicial pronouncements the AO has treated such expenses of capital in nature not to be allowed under Sec. 37 of the Act. Consequently, an addition of ₹ 5,02,818/- was made to the total income of the assessee. 4. Aggrieved assessee has filed before Ld. CIT(A). The Ld. CIT(A) has dismissed the appeal of the assessee. 5. During the course of appellate proceeding before us the Ld. Counsel has contended that Co-ordinate Bench of the ITAT vide ITA Nos. 775/Ahd/2014, 2346 2797/Ahd/2015 has decided the identical issue in the case of the assessee itself on similar fact in favour of the assessee. On the other h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her submitted that Hon ble Gujarat High Court has approved the appointed date of 01.01.2007 as mentioned in the scheme of demerger and the order was passed only in F.Y. 2009-10. It is further submitted that the transfer of assets and liability from the demerged company to the assessee company took place in A.Y. 2010-11 and goodwill was recognised in assessee s books of account in A.Y. 2010-11. Therefore, depreciation cannot be claimed on the same from A.Y. 2007-08 when the asset itself was created in A.Y. 2010-11. The AO has not accepted the explanation of the assessee. He was of the view that Hon ble High Court of Gujarat has approved the scheme of demerger and order appointed date as 01.01.2007. Therefore, the claim of depreciation on goodwill to the amount of ₹ 1,81,33,969/- was disallowed and added to the total income of the assessee. 8. Aggrieved assessee has filed before Ld. CIT(A). The Ld. CIT(A) has dismissed the appeal of the assessee. 9. During the course of appellate proceeding before us the Ld. Counsel has brought to our notice that Co-ordinate Bench of the ITAT has adjudicated the identical issue on identical fact in favour of the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the depreciation after reducing the depreciation for AY 2006-07 and 200708. Consequently, the depreciation on goodwill was allowed at ₹ 5,57,63,315/- as against claim of depreciation of ₹ 8,80,01,481/- claimed by the assessee, the AO thereby disallowed the remaining claim of goodwill amount of ₹ 3,22,38,166/- by revising the amount of goodwill carried forward owing to notional depreciation in AY 2006-07 and 2007-08. The learned AR referred to the tabulated statement worked out by the AO as reproduced in the assessment order concerning AY 2012-13 which is reproduced hereunder for easy reference and understanding of the subject: Particulars FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 Goodwill generated 339,890,680 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 Depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion computed by AO 2007-08 4,24,86,335/- (Being 12.5% of value of goodwill on demerger i.e. ₹ 33,98,90,680/-) 2008-09 - 7,43,51,086/- 2009-10 - 5,57,63,315/- 2010-11 4,24,86,335/- (Being 12.5% of value of goodwill on demerger i.e. ₹ 33,98,90,680/-) 4,18,22,486/- 2011-12 7,43,51,086/- 3,13,66,865/- 2012-13 5,57,63,315/- 2,35,25,148/- 2013-14 4,18,22,486/- 1,76,43,861/- 21.3 The assessee in the captioned AY 2009-10 seeks claim of depreciation on goodwill amounting to ₹ 5,57,63,315/- based on the working of the AO although not made any claim towards such depreciation on goodwill in this year. It is the case of the assessee by way of additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year, the assessee is within its legitimate rights to be granted depreciation in AY 2009-10 as per the figures worked by the AO himself. We do not see any perceptible reason for not admitting such claim of the assessee. We also find bonafides in the plea of the assessee for raising new claim on account of depreciation by way of additional ground at this belated stage. The order for the AY 2012-13 was passed on 29.03.2015. By virtue of this order, the assessee came to know about the revision in the claim of depreciation concerning AY 2012-13. By that time, the order of the CIT(A) dated 13.12.2013 was already passed. Therefore, the assessee was incapacitated to put forward such new claim towards depreciation on goodwill amounting to ₹ 5,57,63,315/- for which relevant facts are duly available on record in the light of the decision of Hon ble Supreme court in the case of Goetze (India) Ltd. vs. CIT [2006] 284 ITR 323 (SC) NTPC vs. CIT 229 ITR 383 (SC). Respectfully, following the decision of the Co-ordinate Bench as cited in this order the appeal of the assessee on this issue is allowed. Ground No. 4:- Disallowance u/s. 14A r.w.r. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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