TaxTMI 
TaxTMI 
2021 (3) TMI 341
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....9,09,96,797/- by an order u/s. 154 of the IT Act passed by the Assessing Officer) made u/s. 32(1)(ii) of the IT Act. 3. The learned Commissioner of Income-Tax (Appeals) ought to have considered that the disallowance of the claim of depreciation by the Assessing officer as per order u/s. 154 was Rs. 99,09,96,797/- and not Rs. 44,04,03,000/-. The learned CIT (Appeals) ought to have decided the appeal against disallowance of depreciation of Rs. 99,09,96,797/-. 4. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact that while acquiring the Industrial packaging unit from ITW India Limited, the appellant acquired the goodwill of the value of Rs. 792.79 crores. by paying consideration. 5. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact that the appellant acquired the business activity as a going concern and the assets including goodwill were valued by BSR & Company and the assets acquired include goodwill valued at Rs. 792.79 crores. 6. The learned Commissioner of Income-Tax (Appeals) ought to have considered various legal precedents on the subject and ought to have held that the appellan....
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....tion claimed 1 Goodwill and other intangibles (Note. 36) 79279.74 4404.43 2.2. On verification of the information filed, it is noticed from Note 36 to Audit Report filed by the assessee, that the assessee had purchased the packaging unit of M/s. ITW India Limited, on slump sale and on 'as is where is basis' for a consideration of Rs. 1240 crores, which includes the assets shown in the above tables and capital work-in-progress of Rs. 640,79 lakhs, cash and equivalents, receivables of Rs. 23,657.23 lakhs, inventory of Rs. 10,349.89 lakhs and other current assets of Rs. 5,306.04 lakhs. The purchase consideration also includes trade payables at Rs. 6012.00 lakhs and other liabilities of Rs. 5466.77 lakhs. The assessee submitted that it had valued the unit purchased from M/s. ITW India Ltd., basing on the valuation done by independent valuers M/s. B.S.R. & CO., and filed a copy of the valuation report. As seen from the valuation report and accompanying particulars, it is noticed that the company M/s. ITW India Ltd., did not record any goodwill in its books. However, the assessee had determined the Goodwill of the packa....
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....le value in the market on fair market basis. Further, the value of land shown at Rs. 34 crore is much much lower than the prevailing market value of the land as part of slump sale. Hence, considering the excess value of net assets book value on this analogy by the valuer engaged by your companies without any genuine analysis of its fair market value would lead to skewed assessment of valuation. Further, the following distinguishable facts are notable as per the working submitted/used in the valuation report. (i) As observed at para 5.2.6 it is clear that ITW India Limited recorded goodwill on account of its acquisition of Wintek Flexo Prints Partnership Firm in F.Y. ending 31/03/2012 and on similar analogy it has also recorded intangible assets on account of the same transaction. The qualifying notes as given in valuation report on acquisition are as under: 5.2.6. Signode recorded goodwill of INR 143.2 million in CY 2012 on account of acquisition of Wintek Flexo Prints (Wintek). Wintek was a partnership firm based out of Bangalore engaged in producing branded tables in India. 5.2.7. Intangible assets amounting to INR 173.4 million were recorded on account....
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.... have higher intrinsic value. This can be clearly seen with reference to land value adopted at Rs. 3400.00 lacs as given in the above note. 2.4. In response to the show-cause letter cited above, the assessee filed its reply on 28/12/2016 and the main contention of the assessee is the same of the first reply and it mostly relied upon the valuation report and also on the market share of purchased company. The assessee submitted that the value of land was properly valued by the independent valuer and there cannot be much growth than considered 1 by the assessee. The important submissions made by the assessee are reproduced here under: a) M/s. BSR and Associates have valued the packing division using most accepted valuation methods viz., discounted cash flows method (DCF), comparable companies method and comparable transactions method and the average value of these three methods has been taken to be the value of the industrial packing division. Thus a value of Rs. 12400 million is arrived at after considering the above most accepted valuation methods. b) for determination of fair market value and for accounting the allocation of consideration paid to....
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....abels division (branded steel strip which is primarily used by jute and cotton industries) etc, and the assessee company had purchased the said unit keeping in view of the market share of the company (M/s. ITW India Ltd.) and because of the ready market share that would be enjoyable by the assessee company. The submissions made by the assessee are carefully considered and found to be not acceptable. As stated supra, it is clear that ITW India Limited recorded goodwill on account of its acquisition of Wintek Flexo Prints, Partnership Firm in F.Y. ending 31/03/2012 and on similar analogy it has also recorded intangible assets on account of the same transaction. The qualifying notes as given in valuation report on acquisition are re-produced for the sake of clarity, as under: 5.2.6. Signode recorded goodwill of INR 143.2 million in CY 2012 on account of acquisition of Wintek Flexo Prints (Wintek). Wintek was a partnership firm based out of Bangalore engaged in producing branded tables in India. 5.2.7 Intangible assets amounting to INR 173.4 million were recorded on account of acquisition of Wintek. These intangible assets comprise trademarks and trade name -....
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....he depreciation claimed by assessee on 'good will and other intangibles' working out to Rs. 44,04,03,000/- is disallowed and added back to the income returned." 2.1. The assessee preferred an appeal before the CIT(A) and filed written submissions before the CIT(A). After considering the written submissions of the assessee, the CIT(A) dismissed the appeal of the assessee. 3. Aggrieved the assessee is in appeal before the Tribunal. 4. The Ld. AR reiterated the submissions made before the authorities below and further the he Vehemently argued the case of the assessee. He stated that the assessee has paid consideration over and above from tangible assets has been recorded as Goodwill and depreciation was claimed as per the prescribed rate of Depreciation and in support of his argument he has relied on the number of judgments which are place on record containing paper book page No. 01-113 AR filed elaborate written submissions in support of assessee's case, the gist of which are as under: (1) The appellant acquired the Industrial Packaging division held by ITW India Limited after due diligence for a consideration of Rs. 1,240 Crores. (2) The total ....
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....rt of its enterprise strategy and portfolio management initially decided to exit its industrial packaging business globally. In the process ITW India Limited, transferred its industrial packaging business in India to Signode India Limited and the assessee Signode India Limited was transferred to the management of Carlyle group. In this regard, the following sequence of events are relevant: i) ITW India Limited entered into Business Transfer Agreement with the appellant on 22.11.2013 effective from 30.11.2013. ii) The industrial packaging segment was sold to the Carlyle group and this was announced in a release by ITW in its business review dated 06.02.2014. iii) The transfer of the industrial packaging unit was complete by 01.05.2014 and to this effect the Carlyle group announced in the Press Release wherein it announced that it has acquired Signode India group through ITW on 01.05.2014. The above events clearly indicate that ITW Inc., in order to achieve its objective of exiting from its industrial packaging business globally, reorganised its business activity and in the process the industrial packaging unit was transferred to Signode I....
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....st and Accumulated Goodwill Amortization. No values are fixed for individual assets and assumed liabilities as the sale is a going concern. Also in the books of the assessee, the only intangible asset as on 31/03/2013 is license fee. 3. A significant part of clause 2.1 of the agreement which indicates transferred assets contains list of "other assets" which is available at Exhibit "C" of the agreement. As per the agreement, these assets would be retained by the transferor. These assets include trade names, logos, Internet addresses and domain names, trade marks and service marks and related registrations and applications used in the Business that consist of or contain "ITW", "Illinois Tool Works" or any derivation thereof. 4. The consideration for transfer of business is also fixed at a lump sum amount of 1240 Cr and no basis for the price is available from the agreement. It is clearly mentioned at clause 2.6 of the agreement that the purchase price is a lumpsum consideration and "No specific part of the purchase price is allocated to any specific asset, right or other interest of the Transferor comprising the Business, nor can the purchase price be so allocated. ....
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....entions the scope and limitation of the work, it is evident that the report is based and relies solely on the underlying management assumptions and management business plans provided by the management of ITW Inc and the valuer did not carry out independent verification of financial projections and underlying data. The valuer also clearly states that he does not express any opinion on the factual basis of the information and if there were any omissions, inaccuracies or misrepresentation of the information provided by the management of ITW, this may have a material effect on his findings. Therefore, the valuation report is nothing but an arithmetical exercise feeding management given input into a financial model to arrive at mere numbers without much support. 9. It is also humbly submitted that as seen from clause 5.2.6 of the report of the valuer, Signode recorded goodwill of. 14.32 Cr. in Calendar Year 2912 on account of acquisition of the partnership firm Wintek Flexi Prints. As per clause 6.1.2.4 of the report, goodwill of. 14.32 Cr was expected to remain constant throughout the forecast period. However, a much higher value of fictional goodwill is computed merely on the....
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....f Hon'ble supreme Court in the case of Sir Kikabhai Premchand 24 ITR 506 (SC) where in it was held that "It is well recognized that in revenue cases regard must be had to the Substance of the transaction other than to its mere form. In the instant case disregarding technicalities it was Impossible to get away from the fact that the business was owned and run by the assessee himself. In such circumstances it was wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent. Cut away the fictions and one reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the face of it is not only absurd but against all canons of mercantile and income-tax law". 12. The valuation report is also faulty and in contradiction to the "Business Transfer Agreement" in working out a fictional goodwill and the mentioning the same at 792.79 Cr. by assigning the same to certain intangibles in arbitrary manner without any valuation, which in fac....
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....e ITAT also held that explanation (3) to section 43(1) is applicable to cases of inflated valuation of assets purchased from a related party. 15. It is also submitted that clauses 10.2.7 and 10.2.8 of the valuation report clearly indicate that the amount is only a balancing entry and may exclude certain closing account adjustments and the conclusion does not reflect the outcome of any due diligence procedures. It is also submitted that the balancing entry treated as goodwill as per accounting standards is fictional in nature in the present case and does not represent any real intangible and the accounting procedure in double entry accounting system cannot override the provisions of Income Tax Act. 16. It is also submitted that the cost in the hands of transferor company is 'nil' by virtue of section 55(2)(a)(ii) and therefore the cost is 'nil' in the hands of the transferee-assessee also. It is also humbly submitted that fifth proviso to section 32(1) is also attracted in the present case being a case of succession in an independent business and the same reads as under: "Provided also that the aggregate deduction in respect of depreciation....
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....e with the factual finding of the lower authorities. As Supreme Court only decides question of law, the decision cannot be seen as a stamp of approval for the valuation of the good will as difference between transfer price and value of fixed assets. 5.1. Relying on the above submissions, the Ld. DR submitted that the appeal of the assessee may be dismissed. 6. In the rejoinder, the Ld. AR submitted in written form as under & which is placed on record: In Para No. 1, the Ld. CIT-DR mentions that the appellant acquired the industrial packaging unit from Wintek Flexo Prints of ITW India Ltd. This is factually incorrect. ITW India Limited earlier on Feb. 2, 2012, acquired a unit of Wintek Flexo Prints, a partnership firm. The said unit is only a supplemental part of the total business activity of the Industrial Packaging unit held by ITW India Limited. It is a small part of the Industrial Packaging unit held by ITW India Limited. The unit acquired by the appellant is inclusive of Wintek Flexo Prints. 20. The learned CIT-DR mentioned that the appellant is aggrieved of the fact that the CIT (Appeals) did not adjudicate the issue of value of enhancement made by the....
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....her businesses of ITW India Limited and do not relate to the Industrial Packaging Unit. Only Such other assets are retained by ITW and none of the assets relating to the Industrial packaging unit are retained by ITW India Ltd. 24. The learned CIT-DR at paragraph 4 of his submissions mentioned that lump sum amount of Rs. 1240 crores was fixed as per the agreement and that there is no basis for fixing the price. This is not correct. The valuation of various assets was entrusted to independent valuer BSR & Co. The said valuer valued the consideration based on three different acceptable methods and taken the average. In fact, during the course of hearing, the Hon'ble ITAT required the appellant to file copies of the values fixed for the lands by the respective Sub Registrar. A verification of the values fixed would clearly indicate that the land value fixed by the valuer BSR & Co., is more than the value fixed by the Sub Registrar. This clearly shows that the values are quite reasonable. Further, neither the Assessing officer nor the CIT (Appeals) pointed out any error or omission in the valuation made by BSR & Co. 25. Most importantly the appellant may be permitt....
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....s on 30.8.2013, i.e. about two months earlier to the date of agreement. At the relevant point of time, ITW was the owner and it can only refer for the valuation. In such circumstances, there is no reason to doubt the valuation simply because a reference was made by ITW as it was the company which owned the unit. In fact after the agreement, the appellant referred the matter of valuation of independent assets to the valuer. Therefore, no adverse inference can be drawn. 29. In paragraph 8, the CIT-DR mentions that the valuer did not carry out independent verification of the financial projections and underlying data. There is no basis for making such a comment by the learned CIT-DR. To the extent of information furnished by the ITW India Ltd., the valuer examined the same and also examined the basis for such data. The assessee on perusal has come to a conclusion that the valuation made by BSR & Co., is justified. When the valuer has mentioned that if there is any failure on the part of ITW, in furnishing the data there would be a change in the values is a remark to safeguard the interest of the assessee. Further the valuation was carried out 2 months prior to the date of tran....
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.... the second valuation report. The CIT-DR is under a mistaken impression that the word "equity" was used to denote share capital. The meaning of the word "equity" may kindly be analyzed. According to the Black's Law Dictionary 6th Edition the meaning of the word "equity" also or an enterprise over and above the indebtedness against it". The word "equity" in the valuation report is used to denote the value of the property over and above the indebtedness of the unit acquired. Therefore, the other observations made by the CIT IDR are not relevant to the facts of the appellant's case. It is submitted that there is no such intention for the appellant to acquire any equity of ITW India Limited. In fact, the appellant did not acquire shares but it acquired the Industrial Packaging unit which would mean that the appellant had no intention to participate in the management of the ITW India Limited. The observations made by the CIT JOR are, therefore, not relevant to the facts of the case. 34. In paragraph 12, the CIT-DR mentions that the value of the goodwill worked out is a fictional goodwill. (a) Firstly, it is submitted that the value given to the goodwill is not ....
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....ntioned in the earlier paragraphs. 38. In paragraph No. 16, the CIT-DR mentioned that fifth proviso to section 32(1) is also attracted in the present case being a case of succession. Firstly, it is submitted that there is no succession either as per Sec. 170 or as per Section 47 of the I.T. Act. The vendor ITW India Limited has paid capital gain tax and did not claim any exemption in view of Sec. 47. It was considered as a transfer and was not claimed as exempt under any of the clauses of Section 47 of the I.T. Act. In so far as Section 170 is concerned, the said section has no application to the facts of the appellant's case. The entire business activity was not taken over by the appellant from ITW India Limited. Only a part of the business activity i.e. the industrial packaging unit alone was taken over. Further, a reading of Sec. 170 refers to assessment of the person who has transferred the assets and not the person who acquired the asset. Therefore, fifth proviso to Sec. 32(1) has no application to the facts of the case. The appellant may submit that depreciation on goodwill now claimed was not allowed in the case of ITW and therefore, the restrictions mentioned i....
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.... 41. In paragraph No. 19, the CIT-DR mentioned as to how the decision of Supreme Court in the case of Smifs Securities is not applicable to the facts of the appellant's case. In this regard, it is submitted that the Hon'ble Supreme Court did not merely dismiss the SLP but expressly held that the goodwill is entitled for depreciation and that the difference between purchase value and the value of the assets as reduced by the liabilities represents goodwill. The said decision is, in all force, applicable to the facts of the appellant's case. It is further submitted that the Calcutta High Court allowed the appeal of the appellant by recording a reasoned order. The said order is confirmed by the Apex Court after discussing the issue. There are various other judicial pronouncements to this effect as listed. 42. The decisions relied upon by the CIT DR are not applicable to the facts of the case. They are discussed hereunder: a) The decision of the Supreme Court in the case of Sir Kikabhai Premchand Vs. CIT reported in 24 ITR 506 is not applicable to the issue as the question answered by the Supreme Court is different from the issue on hand. b) The d....
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....il, the assessee has purchased a packaging unit of M/s. ITW India Limited for a consideration of Rs. 1240 crores on slump sale and on "as is where is" which includes various assets and capital work-in-progress, cash and equivalents, receivables, inventory etc., the value of which was based on the valuation done by independent valuers M/s. B.S.R. & Co. -Whereas, M/s. ITW India Limited did not record any goodwill in its books of account but the assessee has determined the same on the pretext that the same is having a sizeable market share in the packaging activities and clientele basis, which was not acceptable to the AO. The AO further stated that M/s. ITW India Limited recorded goodwill on account of its acquisition of Wintek Flexo Prints, partnership firm, in the financial year ending 31.03.2012 and on similar analogy, it has recorded intangible assets on account of same transaction. He has also pointed out that prior to slump sale, M/s. ITW India Limited did not have any goodwill or intangible asset in its books. The AO opined that the goodwill existing in the books of ITW India Limited is relatable M/s. Wintek unit acquired by it in earlier year and not pertain to the unit purch....
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.... of the said independent valuer, are as under: 2. Terms of engagement 2.1 BSR and Associates Chartered Accountants ("BSR") has been appointed by Illinois Tool Works Inc. ("ITW" or the "Client") to act as financial advisor in relation to proposed slump sale of Signode India by ITW India Limited to Signode India Limited ("Project Total"). 2.2 BSR is to undertake a valuation of the Division ("the "Valuation") as at 30 June 2013 ("Valuation Date"). The Valuation is to be used for the proposed slump sale only. 2.3 ........................ 2.4 ........................ 2.5 ......................... 2.6 This Report is based on the information provided by the Client and has been confirmed by the Client. We have not independently verified or checked the accuracy or timeliness of the same. 7.5. The scope and limitation of work is as under: "3.2 This Report is based on and relies solely on the Management Business Plan provided by the Management of ITW for the period 01 July 2013 to 31 December 2019 ("Management Business "Plan"). BSR has read and analyzed but not independently verified the financial projections and under....
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....8.1.17 From the tangible assets valuation perspective, the cost approach measures the value of an asset based on the cost to replace it new with an identical or similar unit of equal utility. Under this approach, replacement cost new or reproduction cost new of the asset is determined first and then fair value is determined by adjusting the replacement cost new or reproduction cost new by the loss in value due to physical deterioration and functional and economic obsolescence. 7.10. 8.1.19 Land - Market approach (Sales comparison method)/Sales comparison method establishes value of an asset through the analysis of recent transactions/sales/transfers or offerings/bid prices of comparable assets. For valuation of specified industrial land, V prevailing market rate of land based on recent transactions/sales/transfer or bid prices applicable for similar type of industrial land in the nearby locality has been considered as basis. We made enquiries with local real estate agents/dealers, land allotment authorities and also relied on various data sources to establish the prevailing market rate of similar type of land in the vicinity of the specified land. Due consideration has ....
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....rried out any legal technical due-diligence with respect to the specified tangible assets as it was not part of our scope of work. * As part of the PPA, we have carried out fair valuation of specified land and buildings. Other assets group such as plant & machinery, office equipments, furniture & fixtures, motor vehicles etc. have been considered at respective net book value as at Valuation Date as per the information provided by the Management. * We have not verified any regulatory approvals related to operation of specified tangible fixed assets, including the clearance from other regulatory authority as it was beyond our scope of work. Specific to Land * Details such as land area, land use etc. of specified land has been considered based on the information and representation provided by Management. * As normally practiced, transaction costs like stamp duty, registration charges, brokerage, legal expenses etc. pertaining to sale/purchase/transfer of the land have not been considered while estimating the fair value of land. * Market price related information pertaining to similar land parcels available for sale in the nearby lo....
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....ed by the AO, the plant and machineries have been transferred at the book value as was done in the former unit of ITW India Ltd. We note from the valuer's report that the assets have been recorded at their fair value, the fair value has not been defined anywhere in the report of the Valuer. The book value of the depreciable assets are not fair value. It is just a notional depreciated value provided by the assessee in its books of account. Certainly the fair value would be different from the recorded value as noted infra. In case of lands, the authorities below have rightly dealt this issue. The financial growth is constant for 2015, 2016 & 2017 and thereafter, it is going down which is not a good sign of the future business prospects and the assessee has recorded huge amount of goodwill in his books of account after purchasing a unit of the ITW India Ltd. 7.12. During the year, the company has purchased industrial packaging business from ITW India Ltd. on slump sale basis. Based on independent valuation total purchase consideration of Rs. 124,000.00 lacs has been allocated to following assets as under as per note No. 36 of the Balance Sheet for the impugned assessment year: ....
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....h mentions the scope and limitation of the work, it is evident that the report is based and relies solely on the underlying management assumptions and management business plans provided by the management of ITW Inc and the valuer did not carry out independent verification of financial projections and underlying data. The valuer also clearly states that he does not express any opinion on the factual basis of the information and if there were any omissions, inaccuracies or misrepresentation of the information provided by the management of ITW, this may have a material effect on his findings. Therefore, the valuation report is nothing but an arithmetical exercise feeding management given input into a financial model to arrive at mere numbers without much support. The BSR and Co. has relied only on the unaudited data provided by the Management without verifying the reliable financial data of the companies. The valuer has relied on the unaudited financial data which cannot give correct result/valuation of the assets and liabilities, financial projections etc. Therefore, the accuracy of the resultant valuation is not reliable. The authorities below have also questioned the valuation repo....
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....ht of this, the price fixed for transfer is not only for the assets but also for 100% control between the entities of the same group whose parent is same. Allowing depreciation on fictional good will in such a case would be a case of one making profit/loss out of oneself. In such circumstances, we are of the view that it was wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent. Cut away the fictions and one reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the face of it is not only absurd but against all canons of mercantile and income-tax law". 7.19. We observe that the valuation report is also faulty and in contradiction to the "Business Transfer Agreement" in working out a fictional goodwill and the mentioning the same at 792.79 Cr by assigning the same to certain intangibles in arbitrary manner without any valuation, which in fact cannot be fixed as per the "Business Transfer Agreement. Even the second valuat....
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.... "Provided also that the aggregate deduction in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets or know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession referred to in clause (xiii), clause (xiiib) and clause (xiv) of section 47 or section 170 or to the amalgamating company and the amalgamated company in the case of amalgamation, or to the demerged company and the resulting company in the case of demerger, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, or the demerged company and the resulting company, as the case may be, in the ratio of the number of days for which the assets were used by them. 7.23. We are of the opinion that this is a fit case for application of thir....
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.... instead of FMV. The scope and objective of the Explanation 3 of section 43(1) is to check the excess claim of depreciation by enhancing cost of assets acquired which were already in use by other person. Therefore in case of valuation of goodwill the Assessing Officer ought to have examined the valuation of all the assets taken over by the assessee under the amalgamation and thereby to determine the actual cost to the assessee for the purpose of claim of depreciation. In this case there is no doubt that the value of the goodwill was shown in the books of the KBDL at Rs. 7.45 crores which has been enhanced in the books of account of the assessee to Rs. 62.30 crores. The assessee has forcefully contended that the valuation of the goodwill is nothing but only the differential value between the consideration and FMV of the tangible assets. Thus the assessee has contended that Assessing Officer cannot disturb the valuation of the goodwill when it is a differential amount between the consideration and the FMV of the tangible assets. If such claim of goodwill and depreciation is allowed then it would render the provisions of Explanation 3 to section 43(1) redundant, otherwise in every cas....
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....scribed rates as if the amalgamation had not taken place and such deduction shall be apportioned between these companies in the ratio of period of usage of assets. In view of this explanation, KBDL was not claiming any goodwill as an asset eligible for depreciation. If amalgamation is not considered, there would not he any deduction of depreciation on goodwill. Therefore, under this provision also, the assessee is not eligible for depreciation on goodwill. However the Assessing Officer has proceeded to hold the value of the goodwill as shown by the assessee is not justified. 11 is pertinent to note that once the claim of depreciation is restricted under the 5th proviso to section 32(1)(ii) then the valuation issue become irrelevant. The Commissioner (Appeals) has also concurred with the view of the Assessing Officer regarding the applicability of the 5th proviso to section 32(1). It is not the case of the assessee that the subsidiary has claimed any depreciation of goodwill. Therefore, by virtue of 5th proviso to section 32(1), the depreciation on the hands of the assessee is allowable only to the extent if such succession has not taken place. Therefore, the assessee being amalgama....