AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 832
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..../2021. These orders emanated from the orders of the Ld. Assistant Commissioner of Income-tax-12(2)(2), Mumbai passed under section 143(3) read with section 144C(13) of the Act dated 26/10/2017 for A.Y. 2013-14 and under section 143(3) read with section 144C(3) of the Act dated 30/01/2018 for A.Y. 2014-15. Whereas the appeals of the assessee in ITA Nos. 1484, 1451 & 1452/Mum/2024 and CO 87/Mum/2024 are filed against the orders of the National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the Income-tax Act, 1961 (in short, 'the Act'), for Assessment Years 2013-14 and 2014-15, date of orders 30/01/2024. Assessment orders in ITA No.1451, 1452 & 1484/Mum/2024 and CO 87/Mum/2024 emanated from the orders of the Additional / Joint / Deputy / Assistant Commissioner of Income Tax / Income-tax Officer, National Faceless Assessment Centre, Delhi [in short, the "Ld. AO"] passed under section 144 read with section 263 read with section 144B of the Act, all dated 31/03/2022. 2. All the appeals have same nature of facts and common issue. So all the appeals were taken together, heard together and are disposed of by this common order. ITA No.976/Mum/2021 is taken as lead case.....
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....omparison with previous assessment year of SBPO. Moreover, we would also like to state that SBPO has not claimed depreciation at rates higher than what is prescribed under the Income Tax Act, 1961 or additional depreciation during the year under consideration. The details of additions to fixed assets are attached herewith as Annexure 2. The assessee has submitted the statement of additions to the assets, prima-facie we found that the issue with respect of claim of depreciation on goodwill has been not considered or dealt in the course of hearing by the AO and shall have a far reaching effects though in some years the claim was allowed and was disallowed in other years. We found that the Pr.CIT has dealt on the facts to prove that the AO has not applied his mind or made enquiries on the issue. Whereas, the assessee has filed the details of claim of depreciation along with the list of additions in response to notice u/s 142(1) of the Act as referred above. But in the assessment proceedings though the AO has called for the information there is no examination or verification of facts or findings by AO on the claim of depreciation on goodwill and subsequent carry forward of WDV....
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....Law Tribunal, TGSPL merged with Teleperformance Global Business Private Limited ('TGBPL) with effect from an appointed date of 05 April 2023 2. Return of income filed for AV 2012-13: Filed by post-merger Serco BPO Pvt. Ltd. [now TGBPL as successor of TGSPL holding PAN - AABCC6211B (erstwhile PAN-AABCV2572L)]: * During financial year 2011-12, prior to the merger of SKR BPO and pre-merger IGSPL., Serco BPO Pvt. Ltd. had acquired the business of HYIT Knowledge Systems Pvt. Ltd. ("HYITacquisition") vide an asset purchase agreement dated 28 August 2010, pursuant to which goodwill of Rs. 5,81,83,825 was recognized in the books of account. * The original Form 3CD of Serco BPO (prior to merger) was filed on 26 November 2012. As may be noted from the schedule "Depreciation admissible as per the IT Act of the original Form 3CD (page 75 of the compilation), tax depreciation on goodwill and other intangibles was claimed as follows: Particulars Depreciation (Rs.) Opening WDV of Rs. 35,98,55,533 @25% on 35,98,55,533 8,99,63,883 Goodwill of Rs. 5,81,83,825 on the HYIT-acquisition @50% of (25% on Rs. 5,81,83,825) [as used for <....
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.... noted from the draft assessment order (page 81 of the compilation), disallowance was made only in respect of depreciation of Rs. 72,72,978 on the goodwill arising on the HYIT acquisition. * Disallowance was not made in respect of the goodwill arising on the SKR-BPO amalgamation as well as the opening WDV of goodwill. Subsequently, Serco BPO Pvt. Ltd.'s case was transferred from DCIT, Circle-4, Gurgaon to ACIT-12(2)(2), Mumbai due to a change in the company's registered office post-merger, and also upon restructuring of the tax department. Accordingly, the final assessment order was passed by the AO in Mumbai. b. Directions of Dispute Resolution Panel-1. New Delhi (DRP), dated 23 December 2016: * Passed u/s 144C(5). * By CIT 2, DRP-1 of the IT Act. * The objections (Volume 1) against the draft assessment order dated 23 March 2016 were filed with the DRP accompanied by the supporting documents and details in paper books (Volumes II to V). The assessing officer was also notified about the objections filed before the DRP. * Volume II of the objections filed before the DRP (pages 93-101 of the compilation) includes ....
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....goodwill arising on the SKR BPO and premerger IGSPL- amalgamation was not disallowed in the assessment made for AY 2012-13 i.e., the year in which the said goodwill arose for the first time. * In the show-cause notice dated 09 March 2020 issued u/s 263 of the Act, question was raised only with respect to the depreciation claimed on the goodwill, customer contracts and customer relationships acquired pursuant to the SKR-BPO and pre-merger IGSPLamalgamation." * Despite depreciation on goodwill arising on the HYIT-acquisition not being a part of the proceedings under section 263, in the assessment orders dated 31 March 2022 for AYs 2013-14 and 2014-15 passed pursuant to the orders passed under section 263, depreciation has been disallowed on the: - Goodwill arising on the HYIT-acquisition - Goodwill arising on the SKR BPO and pre-merger IGSPL-amalgamation * It is hence submitted that as depreciation was allowed on the goodwill arising on the SKR-BPO and pre-merger IGSPL-amalgamation in AY 2012-13 and the said goodwill was already forming part of the block of opening intangible assets as on 1 April 2013, the claim for depreciation thereon, o....
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....be allowed (7-8) 0 0 2 85821943 58183825 0 10 Depreciation on 6 at full rate 0 1915366 0 99015120 3834322229 0 11 Depreciation on 9 at half rate 0 0 0 4291097 7272978 0 12 Additional depreciation, if any, on 4 0 0 0 0 0 0 13 Additional depreciation, if any, on 7 0 0 0 0 0 0 14 Total depreciation (10+11+12+13) 0 1915366 0 103306217 3841595207 0 15 Expenditure incurred in connection with transfer of asset/ assets 0 0 0 0 0 0 16 Capital gains/ loss under section 50* (5 + 8 -3-4 -7 -15) (enter negative only if block ceases to exist) 0 0 0 0 0 0 17 Written down value on the last day of previous year* (6+ 9 -14) 0 17238289 0 972666924 11553877534 0 6. The Ld.AR respectfully relied on the order of the co-ordinate bench of ITAT, Mumbai Bench in the case of Bhavani Gems Pvt Ltd in ITA No.766/Mum/2021, date of pronouncement 29/04/2022. The relevant paragraph No.16 is reproduced as below:- "016. Coming to the second issue of depreciation on goodwill, the fact shows that the ....
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....ove stated facts we are of the view that impugned transaction for claiming the deduction on account of the depreciation is an arrangement for claiming the higher depreciation which is unwanted under the provisions of law. Before parting, we are conscious to the fact that the assessee was allowed for depreciation in respect of such goodwill in the 1st year of amalgamation i.e. AY 2006-07. There was no action either under section 263 or 147 of the Act by the revenue. Therefore we can safely presume that the claim of the depreciation of the assessee in the 1st year has attained finality. Admittedly the 1st year is the base assessment year from where the issue of depreciation is emanating. 13. The question arises once the depreciation has been allowed in the 1st year then the same can be disturbed in the subsequent year without having any change in the facts and circumstances. In our considered view, in such a case the principles of consistency shall be applied as held by the Hon'ble Bombay High Court in the case of Pr. CIT v. Quest Investment Advisors Ltd. [2018] 96 taxmann.com 157/257 Taxman 211/409 ITR 545 wherein it was held as under: "Once this princ....
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....595659 90379940 From the above it can be seen that the assessee had availed excess depreciation amounting to Rs. 9,03,79,940/- with resultant short levy of tax of Rs. 2,93,23,771/-. These facts and figures were not properly examined and verified by the AO before passing the said assessment order Similarly, the Assessing Officer should have properly inquired into and verified the WDV of other class of assets and ascertained the correctness of the depreciation claimed on addition to fixed assets on amalgamation. 6.3. It may further be noted that in this case there were certain facts and figures which needed proper enquiries and verification before passing the assessment order. It has further been found that M/s. IntelNet Global Services Pvt. Ltd (PAN AAAC17387P) which has subsequently merged with M/s Serco BPO Pvt Ltd and presently renamed as M/s IntelNet Global Services Pvt. Ltd (the assessee) that the said entity had filed Service Tax Return showing receipts of Rs. 1/369.23 crores. Interest receipt of Rs. 10.67 crores and had also shown remittances of Rs. 5.23 crores to a foreign company. Moreover, there is credit card payment of Rs. 19.35 lak....
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....ussed in the proceedings paras. The power of revision of section 263 empower the commissioner to call for and examine the records of proceeding under the act and if he considers that any order passed therein by the assessing officer is erroneous in so far it is prejudicial to the interest of revenue, the order can be revised. In the instant case, the assessment order is found to be erroneous in so far it is prejudicial to the interest of revenue. Therefore, the assessment order is subject to the revision under section 263 of the act." 8. We have heard the rival submissions and perused the material available on record. The issue before us pertains to the validity of the revisional order passed by the Ld. PCIT under section 263 of the Act, in relation to the assessee's claim of depreciation on goodwill arising out of a merger. The said merger and the consequent goodwill were duly reflected in the block of assets from AY 2012-13 onwards. The depreciation claimed in the relevant assessment year is only on the WDV brought forward. It is pertinent to note that in earlier years, the goodwill and the corresponding claim of depreciation were duly accepted by the department, and in the im....