TaxTMI 
TaxTMI 
2019 (6) TMI 422
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....7 This finding is not correct and is a contradiction since the CIT(A) on pg. 6 has clearly mentioned "... it is precisely because of the fact that no consideration was paid for the intangible assets which were created on succession that depreciation was disallowed as there was no cost of acquisition." Thus, the question is not of creation but of consideration. The CIT (A) has held that intangible assets were created on succession however, no consideration was actually paid. It may be noted that on creation of Goodwill & Commercial Rights and Registration there is no necessity to pay consideration because it is on the basis of name, business standing and other factors by virtue of which intangibles are self-generated & created. However, the facts remains that the intangible existed on 30/09/2009 but the issue was that, there was no cost paid on creation of the same. ii) This duly corroborates that the assessee has created artificially these assets after the succession of the firm. '....Pg.5. para.2.7. In the first place the word "after" is incorrect. The goodwill and commercial rights already existed. The Partnership of Shyam Narayan & Bros, was in existence since 1972 a....
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....supplement and annexures to balance Sheet and forms part of the Balance Sheet and accordingly the signature of the Balance Sheet is sufficient to cover the schedules as well. Though, the schedules are initialed there is no requirement, as such, that it has to be signed. This is, in addition to the fact, that in schedules of Fixed assets comprising of the various assets including that of goodwill and commercial rights and registrations do have appropriate initials. v) This makes it further clear that no information about the existence of goodwill or commercial right was there on the date of allotment after the succession. Furthermore, the said allotment also shows share premium of Rs. 17,78,39,700/-. We find there is no mention whatsoever in the succession agreement for allotment of shares on premium. The Ld. Counsel of the assessee submitted that he had no information or details as to how and on what account the share premium was arrived at and mentioned. ... .Pg. 7. para.3. a) The Succession Agreements refers to the consideration and the manner it has to be discharged. The Premium amount is a part of the consideration and the increase or decrease of the amount would not have....
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.... in the Order and those intangible assets along with other assets existed as on 30/09/2009. 3. In his oral submissions learned Counsel of the assessee reiterated the submission as referred here in above. 4. Per contra, learned Departmental Representative submitted that in the aforesaid income tax appeal, the ITAT has passed a well reasoned order. He submitted that in the garb of rectification of the mistake the assessee is seeking a review of the order which is not permissible under the Act. 5. Upon careful consideration, we may gainfully refer to the adjudication by the ITAT in this case which reads as under :- "2.5. We have heard both the Counsel and perused the records. The ld. Counsel of the assessee reiterated the submissions made before the Ld. Commissioner of Income tax(Appeals). He submitted that the assessee company has duly taken over the partnership firm. The goodwill and commercial rights were duly taken over from the partnership firm Assessee is very much eligible as per law to claim depreciation their upon. In this regard he referred to the paper book filed by the assessee. Per contra Ld. Departmental Representative relied upon the order of the ld. CIT(A). He s....
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.... an unsigned document as against the main balance sheet which contains a signature of Chartered Accountant and a partner of the firm. We find it is strange that when the firm has been taken over on the balances of existing as on 30.09.2009, how on 01.10.2009 in the balance sheet of the same firm, balances as on 30.09.2009 are existing and surprisingly there is a existence of unsigned Schedule E and F which were absent in the earlier balance sheet. 3. We further note that in the succession agreement produced before us there is no mention of existence of any goodwill and similar right which is being taken over. The said agreement only mentions that the balance sheet of the firm drawn on 30.09.2009 will be taken over and the consideration shall be discharged by way of allotment of equity shares to the partners of the said firm in ratio of capital balance. In the paper book submitted, the assessee has produced Form No.2 submitted before the Registrar of Companies pursuant to section 75(1) of the Companies Act. The said Form No.2 runs of 4 pages running from PB pgs. 64 to 67. In the said Form of allotment the property and asset acquired have been shown at Rs. 20,74,79,650/-. Further....