2016 (8) TMI 1475

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....r (Appeals)-16, Mumbai, for the assessment year 2008-09. ITA no.6272/Mum./2013 - Assessee's Appeal 2. In this appeal, the assessee has raised following grounds:- 1. The Learned Commissioner of Income Tax (Appeals) erred in not admitting the ground of appeal No.2(a) in relation to deduction of expenditure incurred on work force. 2. Without prejudice to the above, the Learned Commissioner of Income Tax (Appeals) erred in rejecting the claim for Revenue Expenditure made by the Appellant Company, pursuant to Revised Computation of Income, filed as per letter dated 30th March 2011, in respect of the "Expenditure on Work Force" of Rs. 4,60,00,000/-. 3. Without prejudice to the above, the Learned CIT (A) has erred in ....

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.... relying upon the decision of the Hon'ble Supreme Court in Goetze India Ltd. v/s CIT, [2006] 284 ITR 323 (SC), held that there is no provision under the Act to amend the original return of income through an application without filing a revised return of income. Accordingly, he disallowed assessee's claim of depreciation. Being aggrieved of the disallowance, assessee preferred appeal before the learned Commissioner (Appeals). 7. Before the first appellate authority, it was submitted by the assessee that it has entered into a business transfer agreement with Lee and Muirhead P. Ltd., under which assessee has paid agreed consideration of Rs. 159,01,00,000 on intangible assets in the nature of goodwill and claimed depreciation of Rs. 39,....

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....ate authority which was not claimed in the original or revised return of income but was claimed during the assessment and appellate proceedings. Learned Commissioner (Appeals) observed, as far as claim of depreciation is concerned, in terms of Explanation-5 to section 32, it is required to be allowed by the Assessing Officer even if not claimed by the assessee. He further observed, as per section 32(1)(ii), depreciation is allowable on intangible asset being, knowhow trademark license, patent or any other business or commercial rights of similar nature. The learned Commissioner (Appeals) noted, in case of CIT v/s Smifs Securities Ltd., [2012] 348 ITR 302 (SC), the Hon'ble Supreme Court on analysing Explanation-3 to section 32(1) held th....

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....he revised computation of income, copy of which is at Page-65 of the paper book. Thus, the learned Authorised Representative submitted, the claim of depreciation on intangible asset has been rightly allowed by the learned Commissioner (Appeals). As far as the contention of the Department that the assessee having not claimed depreciation on goodwill in the original return of income or by way of revised return of income the decision in Smifs Securities Ltd. (supra) would not be applicable, the learned Authorised Representative submitted, the issue has been settled by Hon'ble Jurisdictional High Court in Pruthvi Brokers and Shareholders Pvt. Ltd. (supra). With regard to the contention of the Department that by virtue of CBDT circular no.54....

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....ll in the nature of intangible asset and the assessee had claimed depreciation both on tangible and intangible assets. As it appears, in the original return of income the assessee claimed depreciation on all other fixed assets except the intangible asset viz. goodwill. In the course of assessment proceedings, the assessee filed a revised computation of income claiming depreciation @ 25% amounting to Rs. 39,75,25,000 on intangible asset of Rs. 159.01 crore. On a perusal of assessment order, it is observed, the only reason for which the Assessing Officer disallowed assessee's claim of depreciation on goodwill is the claim has not been made through revised return of income. Undisputedly, the Assessing Officer has not disputed assessee's claim ....

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....tain a fresh claim of deduction by assessee, if the facts relating to such claim are available on record. If we examine the facts relating to assessee's claim of depreciation on intangible asset, it is apparent that all facts relating to the payment made towards goodwill are available in the annual report of the assessee submitted along with the original return of income. In fact, goodwill appears in the schedule of fixed assets. Thus, it is obvious that due to inadvertent mistake, the assessee could not claim depreciation on goodwill. Therefore, in the course of assessment proceedings, the assessee filed a revised computation claiming depreciation on goodwill. In our view, the depreciation claimed by the assessee on goodwill cannot be reje....