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TMI Blog2024 (5) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018-19, respectively. 2. Since both the appeals pertain to the same assessee and involve a similar issue that arises out of a similar factual matrix, therefore, these appeals were heard together and are being decided by way of this consolidated order. With the consent of the parties, the appeal for the assessment year 2017-18 is taken up as a lead case and the decision rendered therein shall apply "mutatis mutandis" to the appeal for the assessment year 2018-19 filed by the Revenue. ITA. No.3482/Mum./2023 Assessment Year 2017-18 3. In its appeal, the Revenue has raised the following grounds: - "1. "Whether on the facts and circumstances of the case, the Ld CIT(A)/NFAC is erred in deleting the disallowance of depreciation claimed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue raised by the Revenue is against the deletion of disallowance of depreciation claimed on the "Goodwill" by the assessee. 5. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is engaged in the business of manufacturing of perfumes, fragrances & flavours. For the year under consideration, the assessee filed its return of income on 29.11.2017 declaring a total loss of Rs. 5,99,74,572/-. The return filed by the assessee was subsequently revised on 18.01.2019 declaring a loss of Rs. 6,43,52,776/-. The return filed by the assessee was selected for scrutiny and statutory notices u/s 143(2) as well as section 142(1) of the Act were issued and served upon the assessee. The assessee is a privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dwill" amounting to Rs. 47.26 cr, during the year under consideration. 6. The Assessing Officer ("AO") vide order dated 29.12.2019 passed u/s 143(3) of the Act noted that the amalgamated company, i.e. the assessee, is a loss-making company and has used carry forward losses and unabsorbed depreciation. On the other hand, the amalgamating company is a profit-making company with significant turnover. The AO further noted that the scheme of amalgamation has resulted in a large sum of depreciation on "Goodwill" resulting in losses for the amalgamated company. Further, it was noted that the assessee has followed the purchase method for accounting the amalgamation instead of "pooling of interests" method despite the nature of amalgamation being i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and deleted the disallowance made by AO. Being aggrieved, the Revenue is an appeal before us. 8. We have considered the submissions of both sides and perused the material available on records. In the present case, pursuant to the scheme of amalgamation approved by the Hon'ble High Court of Bombay, M/s. Keva Fragrances Pvt. Ltd was amalgamated with M/s. K. V. Arochem Pvt. Ltd, i.e., the assessee, with effect from 01.05.2015. Submission to the amalgamation, the name of the amalgamated company, i.e. the assessee, was changed to M/s. Keva Fragrances Pvt. Ltd. In the present case, it is not in dispute that both amalgamating and amalgamated companies were 100% wholly and subsidiary of M/s. S. H. Kelkar and Co. Ltd. Since the total consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant case as in the said decision the goodwill was already appearing in the books of amalgamating company which was acquired by the amalgamated company and then it was revalued. Besides we note that the said decision of the coordinate bench has been distinguished by the co-ordinate bench of the Tribunal in the case of Aricent Technologies (Holdings) Ltd. vs. DCIT (supra). Further in view of the decision of Hon'ble Karnataka High Court in the case of Padmini Products Pvt. Ltd. vs. DCIT 2020-TIOL-1797-HC-Kar-IT, the decision in United Breweries Ltd Vs ACIT is not a good law as the Hon'ble High Court has held that 5th proviso to section 32(1) is only applicable in the circumstances where the predecessor and successor both claimed depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the eligibility of claim in the year under consideration is merely academic, as in this year the depreciation on "Goodwill" is to be calculated on its opening WDV. Accordingly, we find no infirmity in the impugned order passed by the learned CIT(A), and the same is upheld. As a result, the grounds raised by the Revenue are dismissed. 10. In the result, the appeal by the Revenue for the assessment year 2017-18 is dismissed. ITA. No.3480/Mum./2023 Assessment Year 2018-19 11. The only dispute raised by the Revenue, in the present appeal, is against the deletion of the disallowance of depreciation claimed on "Goodwill". Since a similar issue has already been decided in Revenue's appeal for the assessment year 2017-18, therefore, our fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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