TaxTMI 
TaxTMI 
2020 (9) TMI 463
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....y preceding assessment year? 3. Whether on facts and in circumstances of the case, Ld. CIT(A) is legally justified in deleting disallowance of market to market foreign exchange loss of Rs. 18,26,173/- by relying on judgement of Hon'ble Supreme Court in case of CIT vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 (2009) even when the ratio decidendi of relied upon judgement was not applicable to speculative foreign exchange loss? 4. Whether on facts and in circumstances of the case, Ld. CIT(A) is legally justified in allowing depreciation on goodwill which did not exist in the Balance Sheets for AY 2009-10 to 2012-13 filed along with return of income for these assessment years which included assessment year under consideration? 5. Whether on facts and in circumstances of the case, Ld. CIT(A) is legally justified in allowing depreciation on goodwill value of Rs. 6,09,00,000/- which was not disclosed in the books of accounts for AY 2009-10 to 2012-13 and there was no basis to value goodwill at Rs. 6,09,00,000/- ? 6. Whether on facts and in circumstances of the case, Ld. CIT(A) is legally justified in allowing depreciation on goodwill by ignoring the decision of Hon....
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....ties and perused the orders passed by the revenue authorities especially the order dated 28.08.2020 passed in ITA No. 6101/Del/2017 (AY 2012-13) in assessee's own case i.e. DCIT, Circle 16(2), New Delhi vs. Metal One Corporation India Pvt. Ltd. (AY 2012-13). We are of the view that the issues in dispute have already been decided in favour of the assessee in assessee's own case for the assessment year 2010-11 and 2012-13. For the sake of convenience, the relevant portion of the Tribunal's order dated 28-08.2020 for the assessment year 2012-13 on both the issues are reproduced as under:- "5. We have carefully considered the orders of the authorities below qua the quarrel. We find force in the contention of the ld. counsel for the assessee. Both the issues in the quarrel are settled in favour of the assessee and against the revenue by the Tribunal in assessee's own case in ITA No. 1761/DEL/2015 for A.Y 2010-11. 6. The Tribunal, in A.Y 2010-11 has considered the claim of depreciation on goodwill and adjudicated as under: "Now, coming to the corporate issues raised by the assessee. The first issue raised vide Ground of appeal Nos. 10 & 11 is against the disallowance of depreciat....
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.....e Assessment Year 2009- 10 to 2011- 12. He further pointed that payment of goodwill is not defined anywhere in the agreement. Further, no valuation report of any competent person was available; so, no depreciation is to be allowed on goodwill. 16. We have heard the rival contentions and perused the record. The first issue is whether the claim which has not been made in the Return of income, can the same be allowed in the hands of the assessee, if subsequently raised during the assessment proceedings. The Hon'ble Delhi High Court in CIT vs Jai Parabolic Springs Ltd. 306 ITR 42 (Del.) and Hon'ble Bombay High Court in CIT vs Pruthvi Brokers & Shareholders Pvt.ltd. 349 ITR 336 (Bom.) has held that "even if a claim made by assessee-company does not form part of original return or even revised return", the same is to be allowed in accordance with law. In such facts and circumstances, we are of the view that the claim of depreciation on goodwill needs to be considered in the hands of the assessee. The Business Transfer Agreement is dated 20.06.2008 and no depreciation on goodwill was claimed in the return of income. The case of the assessee is that the said depreciation on goodwill is al....
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....ed 09.07.2020. The Hon'ble Bombay High Court in Pr.CIT vs International Gold Company Ltd. Tax Appeal 1827 of 2016 allowed mark to market loss on revaluation of forward exchange contracts and also held that CBDT Instruction No.3 of 2010 dated 23.03.2010 cannot be applied. Following the same parity of reasoning, we reverse the orders of Assessing Officer in this regard and direct the Assessing Officer to delete the disallowance made on account of mark to market foreign exchange loss. Ground of appeal No.12 raised by the assessee is thus allowed". 7. We have heard both the parties and perused the orders passed by the revenue authorities alongwith the written submissions filed by both the parties. In this Revenue's Appeal there are two issues, one is regarding depreciation on goodwill and the second is relating to foreign exchange loss. The Revenue has raised 09 grounds of appeal, but ground nos. 1-3 is relating to deletion of disallowance of market to market foreign exchange loss amounting to Rs. 18,26,173/-. At the time of hearing, Ld. Counsel for the assessee filed a copy of the ITAT, Delhi I.2 Bench decision dated 28.08.2020 passed in assessee's own case for the assessment year 2....
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....e relevant portion of the impugned order dated 13.12.2016 mentioned at page No. 31-32, para no. 4.5 is reproduced as under:- "4.5 in view of the above discussion, the claim of depreciation on Goodwill is rejected on merit also. However, no disallowance is being made as the assessee has not claimed any depreciation on account of Goodwill in the return of income..." From the entire discussion in the aforementioned paras, the following picture emerges- - Appellant claims deduction towards depreciation on goodwill on purchase of the running business under slump sale - albeit at assessment stage but without filling a revised return of income (on the basis of a decision of the Apex Court in this regard) - Appellant's claim rejected in the assessment due to - - Claim not made in the books of accounts - no claim in financial statements of AYs 2009-10, 2010-11 and 2011-12 - an afterthought - No mention of goodwill / payment in lieu of goodwill in ITA Possibility of excess payment - between two related parties - No market value of assets taken but their book value - No non-compete clause in BTA - No valuation report / no auditor's report regarding quantifica....