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TMI Blog2023 (11) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... to as Act) dated 30.12.2018 by the ld. ACIT, Circle 4(2) Delhi (hereinafter referred to as ld. AO). 2. None appeared on behalf of the assessee. There was no presence of the authorized representative of the assessee on various dates of hearing except 9.5.2023 on which date, Shri Deepesh Jain, Advocate appeared and sought an adjournment on behalf of the assessee. Thereafter, he also did not appear on behalf of the assessee. Since sufficient opportunities were given to the assessee, we proceed to dispose of this appeal on hearing the ld DR and based on materials available on record. 3. The assessee has raised the following grounds of appeal before us:- 1. Under the facts and circumstances of the case, the Ld. CIT (A) has grossly erred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as incorporated on 28.5.2010. The company was amalgamated with its 100% subsidiary company M/s Great Learning Management Pvt Ltd with effect from 1.4.2015 pursuant to the order of the Hon'ble National Company Law Tribunal (NCLT), New Dlehi vide their order dated 31.3.2017. The assessee company is engaged in the business of setting up of management colleges, universities as well as providing educational support services to such colleges / institutions and helps to run education programs ensuring the quality and industry relevance of the programs offered and is also engaged in enabling the provision of high quality professional tertiary education including undergraduate, post graduate, executive and continuing education. The original return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the non compete fees claiming the same as intangible assets within the meaning of section 32(1)i) of the Income Tax Act.)The ld. AO by placing reliance on the decision of Hon'ble Jurisdictional High Court in the case of M/s Sharp Business System vs CIT reported in 254 CTR (Del) 233 concluded that depreciation is not allowable on the payment of non-compete fee which is not in the nature of acquiring intangible assets u/s 32(1)(ii) of the Act. Further the ld. AO observed in Para 4.9. and 4.10 of his order as under:- 4.9 Moreover, one of the stipulations for claiming depreciation u/s 32(1) is that the assessee had used the asset for the purpose of its business or profession. As evident from the clause of the agreement, the parties have u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spite the fact that the same is not used by the assessee for its own business and profession. 5.1. With these observations, the ld. AO disallowed the claim of depreciation of Rs 2,92,67,578/- on non-compete fees in the assessment. 6. The ld AO further observed from the revised computation of income that assessee had set off brought forward losses against total profit amounting to Rs 6,18,27,952/- during the year. The assessee was asked by the ld. AO to provide note on merger of the companies in view of section 72A of the Act and explain whether all the compliances of section 72A of the Act have been done in the instant case for the purpose of set off of brought forward losses and carry forward of the loss to subsequent years. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry forward business loss and unabsorbed depreciation aggregating to Rs 48,66,75,524/- which is available for set off in future years as on 31.3.2015 as per books of accounts. By referring to the provisions of sections 2(1B), 47(vi) and 72A of the Act, the assessee company pleaded that the amalgamated company (ie. Assessee) had not claimed set off of carry forward of accumulated losses and unabsorbed depreciation of amalgamating company while discharging its tax liability during the year. Thus, there is no requirement of complying with section 72A of the Act. The ld. AO however, summarily ignored the contentions of the assessee and disallowed the set off of brought forward losses amounting to Rs 6,18,27,953/- in the assessment. The ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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