TaxTMI 
TaxTMI 
2016 (5) TMI 329
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....peals)-16 ['CIT(A)'] erred in confirming the addition of Rs. 66,87,55,158 under Section 69C of the Act made by the Assessing Officer. 2. Based on the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of Rs. 66,87,55,158/- under Section 69C of the Act even though the Assessing Officer had neither granted any opportunity nor issued any show cause notice to the appellant during the course of the assessment proceedings for submitting the appellant's contentions for non-applicability of Section 69C of the Act. 3. Based on the facts and circumstances of the case and in law, the learned CIT(A) erred in not considering the additional evidence filed by the appellant in support of its contentions for non-applicability of Section 69C of the Act. 4. Based on the facts and circumstances of the case and in law, the learned CJT(A) erred in upholding AO's contention that the appellant had adopted colourable device for tax avoidance without providing any specific finding in the appellate order to this effect. 5. Based on the facts and circumstances of the case and in law....
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.... per profit and loss account in respect of Vikhroli Unit and the said profits were claimed to be exempt u/s 10A of the Act. During the course of assessment proceedings, the AO noticed from the computation of the total income that the assessee added back the sum of Rs. 66,87,55,000/- to the net profit of Rs. 17,47,00,000/- in the Vikhroli Unit -(2), and thus arrived at a business income at Rs. 86,96,91,077/- from the new unit and claimed the same as exempt u/s 10A of the Act. The assessee was called upon to justify this claim of writing off of goodwill by issuing a show cause notice as to why the same should not be added to the total income of the assessee. In response assessee filed its explanation and justification however, the AO added the amount of goodwill during the year to the income of the assessee u/s 69C of the Act by rejecting the contention of the assessee that the goodwill arising out of acquisition of business of customer contact centre services and back office services for matured life and pensions business located at Vikhori on slump sale basis is nothing but a adjustment entry to wipe out the amount of goodwill which has no value and is tax neutral. The ld. CIT(A) u....
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....k, Powai, Mumbai-400076 copy of which is placed at pages 32 to 67 of the assessee's paper book and the payment was made on 1.10.2008 from the city bank of the company which is placed at page 25 of the paper book and payment receipt at page 141 of the paper book. The ld. AR vehemently submitted that the provisions of section 69C were not applicable to the facts of the assessee's case as the sources of payment was fully explained and the payment was made from the bank account of the assessee maintained with CITY Bank in Mumbai. The amount of goodwill written off was first charged to profit and loss account of the assessee and then added back to the net profit of the Vikhroli Unit(2) for the purpose of claiming exemption u/s 10A. Thus, the assessee had not evaded any tax by writing off goodwill which was only an adjustment entry and more so when the profit of the Vikhroli Unit was exempt u/s 10A of the Act. The observations of the AO that the said transaction was a sham transaction and of suspicious nature was totally wrong and without any basis as the business of another company was purchased in slump sale for a consideration of Rs. 86.69 crores acquiring the assets to the tune of Rs....
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....siness as a slump sale on an 'as is where is' basis, for a consideration of Rs. 869,918. The acquisition was effective October 1, 2008. The total consideration of Rs. 869,918 has been allocated to assets and liabilities acquired from PPMS as under: Description Description Fixed assets 261,678 Current assets, loans and advances 21,013 Deferred tax assets 5,805 Sub-total 288,496 Current liabilities and provisions (86,531) Secured loans (802) Sub-total (87,333) Net assets acquired 201,163 Purchase consideration 866,918 Goodwill on acquisition 668,755 In accordance with Accounting Standard on Accounting on Fixed Assets (AS - 10) and Accounting Standard on Intangible Assets (AS - 26) the balance amount of Rs. 668,755 has been allocated to Goodwill. The said goodwill has no recoverable / realizable value and hence has been treated as fully impaired and has been written off as at the year end. "" While filing the return of income in the statement of computation of total income, the assessee added back the said goodwill to the profits of Vikhroli(2) of Rs. 17.47 crores and....