NOVATEUR ELECTRICAL AND DIGITAL SYSTEMS PVT LTD.,MUMBAI vs. ASST CIT 10(3)(1), MUMBAI

ITA 944/MUM/2020Status: DisposedITAT Mumbai25 August 2025AY 2012-13Bench: SMT. BEENA PILLAI (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)22 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that depreciation on goodwill acquired through a slump sale is allowable. It also found that the TPO's use of two different methods for benchmarking export transactions was not justifiable and directed the use of the Transactional Net Margin Method (TNMM).

What were the facts?

The assessee company acquired a switchgear division through a slump sale and claimed depreciation on goodwill. The Transfer Pricing Officer (TPO) made adjustments for export of finished goods and import of raw materials, using different methods for benchmarking.

What were the issues?

The key issues were the allowability of depreciation on goodwill acquired through a slump sale and the appropriateness of the transfer pricing methods and adjustments made by the TPO.

Which sections of the Income-tax Act were involved?

Section 32,Section 92C,Section 92CA,Section 10(3)(1),Section 143(3),Section 144C(3)

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “J” BENCH MUMBAI

Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL

Hearing: 02.06.2025Pronounced: 25.08.2025

Navateur Electricals and Digital systems Pvt. Ltd. AY 2012-13 PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

These two cross appeals filed by assessee and revenue are against the order of CIT (A)-57, Mumbai, vide order no. CIT(A)(A)-57/Arr. 265/2019-20, dated 29.11.2019 passed against the assessment order by Dy. Commissioner of Income Tax – 10(3)(1), Mumbai, u/s. 143(3)

The order continues below.

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