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TMI Blog2025 (2) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly. As on perusal of the affidavit filed by the Regional Director where it has been specifically stated that as per the instruction of the Ministry of Corporate Affairs, New Delhi, a copy of the scheme was forwarded to the Income tax Department on 8th July, 2015 with a request to forward their comments/observations/objections, if any, on the proposed scheme of amalgamation within fifteen days but till the date of filing of the affidavit before the High Court, that is, on 26th August, 2015, no comments/observations/objections were received from the Income tax Department. That apart, we note that the share exchange ratio was very much part of the scheme as could be seen from paragraph 11.1 of the scheme of amalgamation which was presented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case the Learned Tribunal has correctly deleted the disallowance of depreciation of Rs. 6,24,73,357/- on goodwill accounted from the amalgamating company M/s. Ramuk Scan Investment Pvt. Ltd. ? ii) Whether the Learned Tribunal has correctly applied the law of the amalgamation when the full disclosure into assets of the amalgamating company was not made before the Hon'ble High Court, the alleged Goodwill of Rs. 37,91,42,049/- was not accounted in the swap ratio of shares in the amalgamating scheme which was in violation of accounting standard AS-14 ? iii) Whether the Learned Tribunal has correctly applied the law while holding that post-amalgamation after the scheme was approved by the Hon'ble High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tio of shares was not based on the balance sheet as dated 31.12.2014 rather than the balance sheet as at 1.1.2013, resulting in wrong calculation of swap ratio of shares, the assessee not taking the market value of the assets and liabilities while computing the goodwill etc. finally rejected the claim for depreciation of Rs. 6,24,73,357/- including other depreciation claims. Thus, the issue which fell for consideration before the learned Tribunal is whether the assessee is entitled to depreciation on goodwill arising from the excess of consideration paid over the net value of the assets under the scheme of amalgamation which was approved by the High Court at Calcutta after calling for objections from all the stakeholders including the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctioned with effect from a particular date, it is binding on everyone including the statutory authorities. Identical issue was decided by this Court in the case of Commissioner of Income Tax, Kolkata-3, Kolkata vs. M/s. Purbanchal Power Company Limited, ITAT/70/2015, dated 15th July, 2022, wherein the decision of the High Court of Gujarat in Vodafone Essar Gujarat Ltd. vs. Department of Income Tax, (2013) 35 taxmann.com 397 (Gujarat) was taken note of which decision was affirmed by the Hon'ble Supreme Court as reported in Department of Income Tax vs. Vodafone Essar Gujarat Ltd., 2016 (66) taxmann.com 374 (SC). Paragraphs 46 and 47 of the decision by the High Court of Gujarat would be relevant. "46. ... ... ... Keeping the said object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax benefit or even if it is framed with an object of saving tax or it may result into tax avoidance, it cannot be said that the only object of the Scheme is 'tax avoidance'. Considering the various clauses of the Scheme, it is not possible for us to come to a conclusion that the Scheme is floated with the sole object of tax avoidance." 5. Thus, the law on the subject is clear and there can be no ambiguity on the said aspect and the revenue in an assessment proceeding cannot seek to reopen the matter. As pointed out earlier, the issue concerning valuation is sought to be reopened by the Assessing Officer. The question is whether this can be done. To be noted, that the valuation issue was one of the specific issues which was raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the affidavit before the High Court, that is, on 26th August, 2015, no comments/observations/objections were received from the Income tax Department. That apart, we note that the share exchange ratio was very much part of the scheme as could be seen from paragraph 11.1 of the scheme of amalgamation which was presented for approval. 7. That apart, it is relevant to note that the Tribunal partly took note of the submissions made on behalf of the assessee for the assessment year 2013-14 which was the first year the claim for depreciation of goodwill was allowed by the Department and the matter attained finality. Though for the assessment year 2014-15 the same was allowed initially but subsequently the assessment has been reopened and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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