TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 358
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....ered Accountant as prescribed as per provisions of section 10B of the Act and further complied with all the conditions as prescribed. It is therefore submitted that the Hon'ble CIT(A)-III has erred in not granting the exemption as claimed. It be held so now and the AO be directed to allow the claim. 3. The Hon'ble CIT(A)-III, Baroda has erred in confirming the disallowance of depreciation on goodwill of Rs. 61,768/-. Your appellant submits that the disallowance is made without considering the full facts of the case and law. The AO be directed to allow the same as claimed. Your appellant craves for leave to alter/amend/withdraw/modify any of the above grounds before disposal of appeal. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 21/12/2010; thereby the Assessing Officer (AO in short) disallowed the claim of deduction u/s.10B of the Act on the basis that the assessee has claimed deduction u/s.10B for the first time in AY 2008-09. The assessee has not formed by splitting up, or the construction, of....
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....l investment in fixed assets as on 18.02.1999 is Rs. 1,47,03,122/-. Therefore, he submitted that the entire submissions of the assessee is misplaced. The undertaking had, in fact, commenced the commercial production even prior to its conversion into private limited company. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The only issue to be examined is whether the assessee is entitled for exemption u/s.10B of the Act for the year under appeal or not. For the sake of clarity, section 10B of the Act is reproduced hereunder:- "Section-10B :- Special provisions in respect of newly established hundred per cent export-oriented undertakings. (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent export-oriented undertaking from the export for articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from ....
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....be available if there is a transfer to a new business of machinery or plant previously used for any purpose. As per the finding of the ld.CIT(A) that the machinery was used previously and the undertaking had commenced the commercial production prior to February-1999. This finding of the ld.CIT(A) is not controverted by the assessee by placing any contrary material on record. In our considered view, the assessee would be entitled to claim for deduction u/s.10B of the Act, for a period of 10 consecutive years from the date of commencement of its manufacture as envisaged in the section. In the case in hand, the assessee has not demonstrated the actual date of commencement of the commercial production. However, the AO and the ld.CIT(A) have given finding that the commercial production was commenced even prior to the period claimed by the assessee. Under these facts, we do not see any reason to interfere with the order of the ld.CIT(A) as the first requirement is the commencement of manufacturing or production of undertaking. We are supported of the judgement of Hon'ble High Court of Karnataka in the case of Sami Labs Ltd. vs. ACIT reported at (2012) 20 taxmann.com 785 (Kar.). Thus, gro....
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....rm, as a going concern, was taken over by the company/ appellant along with all the assets. At the time of acquisition, the goodwill as an asset was purchased from the firm for a consideration of Rs. 24,67,926/-. Thereafter for A.Y. 1999-00, 2000-01 and 2001-02, the assessee company had claimed depreciation @ 25% as informed by learned AR, Mr. Sunil Talati. The WDV for the year under consideration is Rs. 10,47,157/- over which the depreciation @ 25% amounting to Rs. 2,60,289/- was claimed. On account of these facts, we hereby hold that the goodwill was acquired after 1st day of April, 1998 as required u/s. 32(1 )(ii) of the Act. Now the only question left for our consideration is that whether goodwill can be considered for grant of depreciation. In this regard, a latest decision of Hon'ble High Court pronounced in the case of CIT Vs. SMIFS Securities, 348 ITR 302 is relevant wherein it was held as under: "The Assessing Officer held that goodwill was not an asset falling under Explanation 3 to Section 32(1) of the Income Tax, Act, 1961 ("the Act", for short). We quote hereinbelow Explanation 3 to section 32(1) of the Act: "Explanation 3- For the purposes of this sub-....