TaxTMI 
TaxTMI 
2010 (12) TMI 820
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....02-2005. The AO states that, on perusal of records, it was seen that the assessee had claimed depreciation of Rs.16,42,000/- at the rate of 25% on the intangible assets described in the final accounts as goodwill and valued at Rs.65,69,062/-. He reopened the assessment u/s 147. Thereafter, for the various reasons given in the assessment order, he disallowed the claim of depreciation on intangible assets being goodwill. The assessee carried the matter in appeal. The first appellate authority confirmed the order of the AO. Further aggrieved, the assessee is in appeal before us on the following grounds: "Being aggrieved by the order passed by the CIT(Appeals)-VI, Mumbai, your Appellant submits the following grounds of appeal for your....
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....um/07, order dated 10th Sept., 2009. On merits he submitted that the assessee has all along pointed out to the AO that the amount paid for transfer of business was mainly for transfer of marketing database, use of net work and transfer of human resources experienced in the business. He submitted that the amount can be termed as "any other business or commercial right of similar nature being intangible assets acquired after 1st April, 1996". He submitted that though the amount is debited in the books of account as goodwill, there is no element of goodwill and hence depreciation is claimed on the same. 4. The learned DR, Mr. S.S. Rana, on the other hand, controverted the submissions of the assessee and pointed out that the assessee ....
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....ntangible assets as a going business concern viz. of Graphic Art Films, Papers, Chemicals etc. to Kodak Polychrome Graphic India Pvt. Ltd. 3. The component of the such transfer as the para 2 on page 2 of the said agreement is as follows: a. Equipment set forth in Annexure 1 attached hereto by delivery. b. Inventory Accounts Receivable and other Receivables as on the effective date as per Annexure 2 attached hereto. c. Intangible assets. d. Liabilities mentioned in Annexure 3 to the agreement for the customer rebate or incentive accrued. 4. Kodak Polychrome Graphic India Pvt.Ltd. paid a sum of Rs.1,00,10,22 and debited to goodwill account in fixed assets. It also paid a sum of Rs.9,....
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....sp; (c) Intangible assets." 9. After considering all these submissions, the AO in his assessment order passed u/s 143(3) on 25-02-2005, chose not to disallow the claim of the assessee for depreciation on intangible assets. 10. Later a notice u/s 154 of the Act dated 05-12-2005 was issued wherein under the head "Particulars of mistake proposed to be rectified" it was given as follows: "No depreciation is admissible on Goodwill, hence depreciation claimed of Rs.1642266/- should be disallowed." The assessee gave a detailed reply and contended as follows: "The assessee, while filing the submissions at the time of scrutiny assessment, had submitted various details. In submission dated November....
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....for A.Y. 2002-03." 11. On a perusal of all these correspondence, we are of the considered opinion that the reopening in question is bad in law for the reason that reasons for reopening have been formed on a change of opinion. The Hon'ble Bombay High Court in the case of Chartini India Ltd. vs. Addl. CIT 314 ITR 275 (Bom) held as under: "Where the material on record has already been considered and adjudicated upon, it would not be open to the Assessing Officer to disagree with the view already taken on the material on record. In such a case, reopening of the assessment based on the materials already considered and adjudicated, would amount to reviewing the assessment order by reappreciating the material on record which is....