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TMI Blog2023 (1) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... fore ITAT. A cross objection is like an appeal. It has all the trappings of an appeal. It is filed in the form of memorandum and it is required to be disposed in same manner as an appeal. Even where the appeal is withdrawn or dismissed for default, cross objection may nevertheless be heard and determined. Cross objection is nothing but an appeal, a cross appeal at that. This apart, raising of additional ground would only enable the authority concern to correctly assess the tax liability of the assessee. In the present case we observe that where the AO has readjusted the quantum of depreciation in the subsequent 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. Appeal filed by the assessee is allowed. - ITA No.241/AHD/2020 - - - Dated:- 4-1-2023 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI T. R. SENTHIL KUMAR, JUDICIAL MEMBER Assessee by : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive depreciation on the goodwill. 7. On the other hand, the Ld. DR could not controvert the arguments advanced by the Ld. AR for the assessee. However, the Ld. D.R. vehemently supported the order of the authorities below. 8. We have heard the rival contentions of both the parties and perused the materials available on record including the order passed by the Hon ble Coordinate Bench in the own case of the assessee in ITA No. 1637/Ahd/2018 for the AY 2015-16 vide order dated 06.12.2019, the relevant portion whereof is as follows :- Heard the parties, perused the relevant material available on record including the order passed by the Hon ble Co-ordinate Bench the relevant portion whereof is as follows:- 7. During the course of assessment on perusal of depreciation chart annexed with the Audit Report the AO noticed that assessee has claimed depreciation on goodwill @ 25% to the amount of Rs. 3,13,66,865/- W.D.V. of Rs. 12,54,67,458/-. On query the assessee explained that the assessee company was a resultant company out of the demerger of Adani Energy Ltd. The Hon ble High Court of Gujarat approved the scheme of demerger and ordered appointed date as 01.01.2007. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in its cross objection concerns eligibility of depreciation of goodwill arising on demerger. The learned AR submitted that additional ground concerning the issue does not require any fresh investigation of facts and therefore urged for admission of the same in the light of the decision of Hon ble Supreme Court in the case of National Thermal Power Company Ltd. vs. CIT (1998) 229 ITR 383 (SC): CIT vs. Sinhgad Technical Education Society [2017] 84 taxmann.com 290 (SC). Elaborating further, the learned AR referred para 7 of page no.33 to the assessment order passed under s. 143(3) of the Act concerning AY 2012-13 and submitted that the controversy has arisen because the scheme of the demerger was sanctioned by the order of the Hon ble Gujarat High Court vide its order dated 09.12.2009 w.e.f. the appointed date of 01.01.2007 as mentioned in the draft scheme of demerger. The sanction was accorded by the Hon ble High Court in FY 2009-10 i.e. AY 2010-11. The assessee claimed depreciation on the goodwill arising on the demerger in the AY 2010-11 as the order was received in FY 2009-10 relevant to AY 2010-11, the AO however complied depreciation on goodwill generated as a result of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration amounting to Rs.33,98,90,680/- was treated in the nature of goodwill by the assessee as a capital right. The assessee claimed depreciation thereon for the first time in AY 2010-11 being the year in which the order of the Hon ble Gujarat High Court was received. Consequently, the depreciation of Rs.4,24,86,335/- (being 12.5% of the value of goodwill and demerger of Rs.33.98 Crore) was claimed in AY 2010-11. In the course of scrutiny assessment, however, the AO took a view that depreciation was allowable to the assessee on such goodwill from the date of sanction of the demerger scheme falling in AY 2007-08. The AO accordingly re-determined the gross block and WDV pertaining to depreciation of goodwill as a result the depreciation for AY 2007-08, 2008-09 and 2009-10 was artificially applied which was not claimed by the assessee at all in these years. The AO accordingly reworked the WDV of the various FYs as tabulated above. 21.2 We are concerned with AY 2009-10 in question. The AO has assumed depreciation of Rs.5,57,63,315/- pertaining to the aforesaid assessment year while re-determining the quantum of eligible depreciation in AYs 2010-11, 2011-12. 2012-13 2013-14. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a regular appeal more so in the light of language employed under s.253(4) of the Act. 21.5 We find ourselves in agreement with the propositions made on behalf of the assessee that in a cross objection, there is no bar to raise legal issues for the first time before ITAT. A cross objection is like an appeal. It has all the trappings of an appeal. It is filed in the form of memorandum and it is required to be disposed in same manner as an appeal. Even where the appeal is withdrawn or dismissed for default, cross objection may nevertheless be heard and determined. Cross objection is nothing but an appeal, a cross appeal at that. This apart, raising of additional ground would only enable the authority concern to correctly assess the tax liability of the assessee. Similar view has been expressed by the co-ordinate bench in the case of ITO vs. Jasjit Singh (Del) in cross objection Nos. 138 to 142/Del/2014 interim order dated 23.09.2014. We thus do not see any impediment in entertaining the additional grounds. The relevant facts are available on record. 21.6 In so far as the merits of the claim made in additional ground is concerned, we observe that where the AO has readjus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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