TaxTMI 
TaxTMI 
2023 (5) TMI 116
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....from the date of receipt of said order. Therefore, the due date to file the Appeal is 24.05.2022. 8. The said order under section 263 was not served physically on the Appellant and was served on Appellant through an email which was marked as spam and thereby the said order has not been noticed. 9. Further the Deputy Commissioner of Income Tax, Corporate Circle 5(1), Chennai has not initiated giving effect to order proceedings. 10. During the internal review of pending appeal assessment proceedings and appeals, the management of the Appellant and Authorized representative noticed that, this order was hosted in the income tax portal and the email has been marked as spam. 11. The Appellant was vigilant in filing the appeal with in the said due date under section 253 of the Act. 12. It is submitted that if the delay in filing the appeal is not condoned and the appeal is dismissed at the threshold, it will be put to great hardship to the Appellant and no hardship will be caused to the Respondent and department, if the delay in filing appeal is condoned and the appeal is taken up on merits. 13. It is therefore prayed that the delay of 162 days may be condoned and thus render ....
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....show-cause notice was issued and posted the case for hearing. The assessee filed its reply stating as under: "The Hon'ble High Court while approving the Scheme of amalgamation, has approved that, Amalgamated Company shall record all the assets and liabilities of amalgamating companies. The Hon'ble High Court approved that, difference between the net asset value of amalgamating companies and the value of preference shares credited by assessee shall be debited to Goodwill account. Accordingly, the Company debited the excess consideration paid over and above the net assets of the amalgamating company to Goodwill account and has claimed depreciation on the same. Pursuant to the above referred order of Hon'ble High Court, the company has allotted shares and has recognized all the assets and liabilities of the Amalgamating companies at its book value as stipulated under the provisions of the Act. The excess of consideration over and above the net book value, represented by reputation which the Amalgamating company was enjoying in order to retain its existing clientele, is credited to the account of Goodwill. Depreciation of Goodwill: Section 32 of the Act allow depreciation....
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....However, in the hands of the amalgamated company good will of Rs.69.64 crores was claimed. Now, explanation 7 to section 43(1) of the Income-tax Act states that in a scheme of amalgamation, where any capital asset is transferred by the amalgamating company to the amalgamated company and the amalgamated company is an Indian company, the actual cost of the transferred capital asset to the amalgamated company shall be taken to be the same as it would have been if the amalgamating company had continued to hold the capital asset for the purposes of its own business. 10. It is apparent that as per this explanation, the cost of a capital asset to be recorded in the books of amalgamated company should be the same as written down value in the in the books of the amalgamating. Now, in the in instant case, WDV of goodwill in the books of amalgamating companies was zero. Therefore, as per this explanation, the actual cost of goodwill to be recorded in the books of amalgamated company should also be zero. 11. Now, in view of the above explanation, it is apparent that the cost of the goodwill recorded by the assessee in its books is incorrect and so is the claim of depreciation on it. 12. ....
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....reweries Ltd. Vs. Additional Commissioner of Income-tax (76 taxmann.com 103). 16. Therefore, both as per the explanation 7 to section 43(1) and as per the 6th proviso to section 32(1), the depreciation claimed to the extent of Rs. 17,41,16,411/- on goodwill is not admissible and requires to be added back to the total income. 17. Therefore, the assessment order passed under section 143(3) was completed on 30.12.2019 by the Assessing Officer for the assessment year 2017-18 is considered to be erroneous as it is prejudicial to the interests of revenue, within the meaning of Sec. 263 of the Act, 1961. The same is hence set aside, with the direction to the Assessing Officer to pass the order afresh as per the discussions above after providing the assessee, an opportunity of being heard." 7. On being aggrieved, the assessee carried the matter in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the issue involved in this appeal is depreciation on goodwill which is covered by the decision of the Hon'ble Supreme Court in the case of CIT v. Smifs Securities Limited [2012] 348 ITR 302 (SC) and once the issue is covered by the decision of the Hon'ble Supreme....
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....d on amalgamation. In this case, the amalgamating company has not claimed depreciation on goodwill. The assessee company, which is amalgamated company only created goodwill to the tune of Rs..124,88,25,256/- due to amalgamation. Under these facts and circumstances of the case, the Assessing Officer ought to have examined as to how the depreciation is claimed by the amalgamated company, whether the depreciation claimed by the amalgamated company is in accordance with law or not and the Assessing Officer should have been issued notice under section 142(1) of the Act and called for the details and should have examined the issue. One more important aspect in this case is that the amalgamating company has not claimed any depreciation. In these peculiar circumstances of the case, the burden cast upon the Assessing Officer to call for the details and examine the same. However, the Assessing Officer has totally ignored the artificial creation of goodwill for claiming depreciation to the tune of Rs..17.41 crores. By examining entire records of the assessee and after considering the explanations, the ld. PCIT came to the conclusion that the Assessing Officer has not at all examined the artif....