TaxTMI 
TaxTMI 
2019 (9) TMI 1700
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....ion was actually made due to failure of the assessee in producing supporting bills, vouchers and other documentary evidences to substantiate the said expenditure. ii. That on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the addition disallowance of the claim of depreciation in spite of assessee's failure to disclose goodwill in the accounts of FY 2006-07. iii. That on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the disallowance of the claim of depreciation in spite of assessee's failure to justify enumeration of goodwill. iv. That on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the disallowance the claim of depreciation on goodwill through major part of the claim pertained to earlier assessment years. v. That on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the additions made on account of bad debts in absence of corroborating evidences. vi. That on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the additions made on account of bad debts on the bas....
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.... the ld. CIT(A), the revenue is in appeal before us. 6. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. On other hand, the ld. Counsel for the assessee defended the order passed by the ld CIT(A). 7. We have heard both the parties and perused the material available on record. We note that the during the assessment proceedings the assessee submitted the project wise details of these expenses on 21st March, 2014. However, in the impugned assessment order, the ld. Assessing Officer without giving proper opportunity of being heard to the assessee, disallowed Rs. 90,32,940/- incurred on account of the below noted project sites: Sl. No. Particulars Expenses incurred Amount disallowed on ad hoc basis 1 Bhopal Site 5,619,157 4,015,100 2 Bareilly Site 9,659,861 4,912,500 3 Haldia Site 1,085, 640 105,340 Total 9,032,940 It is a well-established principle that ad hoc disallowance made by an Assessing Officer without proper verification of the facts is bad in law and in gross violation of the princ....
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.... Bombay High Court in the case of Birla Global Asset Finance Co. Ltd (Income Tax Appeal No. 6835 of 20 10) and Toyo Engineering India Ltd (TS-811-HC-2012 BOM). Goodwill has arisen in the books of SIDCL in the FY 2006-07. The company has not claimed depreciation on goodwill in any Assessment Year prior to A. Y. 11-12. Section 43(6) of the Act provides as follows: "written down value" means a. In the case of assets acquired in the previous year, the actual cost to the assessee; b. In the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under this Act, or under the Indian Income-tax Act, 1922(11 of 1922) or any Act repealed by that Act, or under any executive orders issued when the Indian Income Tax Act 1886(2 of 1886), was in force." Hence, we had claimed depreciation on actual cost of goodwill (intangible asset) i.e. INR 10 crores during AY 2011-12 at the rate of 25% by filing a revised return. The claim for deprecation in this year is INR 2.5 crores." However, the assessing officer rejected the claim of the assessee and noted that the tax audit report and profit & l....
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.... [2012] 24 taxmann.com 222 (SC). We note that the decision of Supreme Court has also been followed in the following decisions wherein it was held that depreciation is allowable on goodwill arising on merger: - DCIT vs. Worldwide Media [2014] 43 Taxmann.com 18-Mum ITAT - Triune Energy Services (P) Ltd.-vs DCIT, [2016] 65 Taxmann.com 288-Del HC) - Cyber India online ltd. vs ACIT [2014] 42 Taxmann.Com 108 We note Assessing Officer has disallowed the depreciation on goodwill merely on the ground that the goodwill is not reflected in the post-merger audited financial statement and the tax audit report of the assessee. In this regard, the assessee has submitted that post approval of merger by the Hon'ble High Court of Delhi and Hon'ble Calcutta High court, the audited financial statement for FY 2006-07 clearly reflected the amount of goodwill for a sum of Rs. 100,000,000/- that arose pursuant to the merger. The same was also filed with the A.O. vide letter dated 21st March, 2014. Though in the tax audit report the tax auditor has not considered the depreciation on goodwill, but the same cannot be the basis of disallowance. We find that such disallowance made....
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....y the Assessing Officer. Aggrieved by the order of the ld. CIT(A), the revenue is in appeal before us. 20. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. On the other hand, the ld. Counsel for the assessee defended the order passed by ld CIT(A). 21. We have heard both the parties and perused the material available on record. We note that in response to the query of the AO, the assessee submitted details of bad debts written off before him vide submission dated 1 January 2014. The claim of bad debt of Rs. 44,04,255/- consisted of debts due from IRCON and PWD amounting to Rs. 38,90, 132/- and remaining debt written off represented write off of Fixed asset. We note that AO disallowed bad debts written off in the P&L a/c aggregating to Rs.38,90,132/-, representing unrealized balances of debtors viz. IRCON and PWD for sales made up to 31st March 2006 and 31 March 2001 respectively. On further enquiry by the AO, the Assessee filed submission dated 14.03 2014 before the AO, mentioning the details of debtors whose balances were written off as bad d....
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.... Rs.7,57,627/- as closing balance. The assessee was asked to explain the discrepancy in transaction with the said party but the assessee was not able to reconcile the discrepancy. As such the difference amount of Rs. 2,03,655/- (Rs.7,57,627 - Rs.5,53,972) was treated as excess liability shown by the assessee company in the books of accounts and thus Rs. 2,03,655/- was added back to the total income of the assessee. 24. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer. Aggrieved by the order of the ld. CIT(A), the revenue is in appeal before us . 25. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity. 26. We have heard both the parties and perused the material available on record. We note that the difference in liability is primarily on account of the accounting of service tax. The ld Counsel submits that it is not the case where excess expenditure has been recorded for which liability has arisen. The amount of service tax....