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Income Tax Appellate Tribunal, “J” Bench, Mumbai
Per B.R.Baskaran (AM) :-
This appeal of the assessee relating to AY 2009-10 was earlier disposed of by the Tribunal on 28-06-2019. Subsequently, the assessee moved a miscellaneous application contending that the grounds urged by way of additional grounds have not been disposed of by the Tribunal. Finding merit in the said application, the Tribunal, vide its order dated 12-03-2021 passed in M.A.No.632/Mum/2019, recalled its above order for the limited purpose of adjudicating following additional grounds of appeal urged by the assessee:-
"10. Ground 10 - Depreciation on actual cost of purchased Goodwill for AY 2009-10
10.1 On the facts and in the circumstances of the case and in law, the learned Deputy Commissioner of Income Tax ('DCIT') and Hon'ble Dispute Resolution Panel ('DRP') erred in not considering the actual cost (aggregating to Rs.74,94,11,161) of Goodwill purchased from Glaxosmithkline Pharmaceuticals Ltd., pursuant to slump sale, as the written down value for the purposes of section 43(6)(c)(ii) of the Income Tax Act, 1961 ('IT Act') and consequently, erred in not allowing depreciation amounting to Rs.18,73,52,790 on the above written down value.
2 Thermo Fisher Scientific India Private Limited
Ground 11 - Allowance of higher brought forward unabsorbed depreciation of AY 2008-09 relating to depreciation on purchased Goodwill
11.1 Without prejudice to the Ground No. 10, on the facts and in the circumstances of the case and in law, the learned DCIT erred in not allowing higher brought forward unabsorbed depreciation of AY 2008-09 relating to the depreciation of Rs.18,73,52,790 on Goodwill purchased from Glaxosmithkline Pharmaceuticals Ltd.
Ground 12 - Allowance of higher brought forward unabsorbed depreciation of AY 2008-09 relating to depreciation on software expenses
12.1 On the facts and in the circumstances of the case and in law, the learned DCIT erred in not allowing higher brought forward unabsorbed depreciation of AY 2008-09 relating to depreciation of Rs.262,345 on software expenses treated as capital expenditure in AY 2007-08."
The Ld A.R submitted that the assessee had acquired “Qualigens Fine Chemicals Division” from Glaxo Smithkline Pharma Limited during the financial year 2007-08 relevant to AY 2008-09. The acquisition cost consisted of acquisition of “Good Will” also. However, the assessee did not claim depreciation on good will in AY 2008-09 and also in AY 2009-10 in the return of income filed by it. However, during the course of assessment proceedings relating to AY 2009-10, the assessee claimed depreciation on good will amounting to Rs.21,28,26,691/- before the AO. The workings for the same is given as under:- PARTICULARS AMOUNT Value of Goodwill acquired in the course of acquisition from 74,94,11,161 Glaxosmithkline Pharmaceuticals Ltd in AY 2008-09 Less:- Depreciation @ 25% for AY 2008-09 18,73,52,790 Written Down Value as on 01.04.2008 56,20,58,371 Add:- Value of Goodwill acquired in the course of acquisition 28,92,48,395 from Chemito Technologies Private Limited in AY 2009-10 Total 85,13,06,766 Depreciation @ 25% for the current year 21,28,26,691
3 Thermo Fisher Scientific India Private Limited
The assessee placed its reliance on the decision rendered by Hon’ble Supreme Court in the case of Smifs Securities Ltd(24 taxmann.com 222) in support of its claim for depreciation on the amount of Good will. The AO, however, did not allow the claim, as he took the view that the assessee should have made the new claim by filing revised return of income as per the decision rendered by Hon’ble Supreme Court in the case of Goetze India Limited vs. CIT (284 ITR 323)(SC). The Tribunal, vide its order dated 28-06- 2019, admitted the additional claim by observing that the Hon’ble Apex Court itself has held that the said decision would not impinge the power of the Tribunal to admit additional grounds. However, the Tribunal restored this issue to the file of AO, as it has not been examined at all by the AO.
By way of additional grounds, the assessee had raised certain more additional claims in respect of depreciation, which were not adjudicated by the Tribunal in its original order. As stated earlier, the order of the Tribunal was recalled for the limited purpose of adjudicating the additional grounds.
It is pertinent to mention here that the assessee had not claimed depreciation on good will amounting to Rs.18,73,52,790/- in AY 2008-09. Hence, in Ground no.10, the assessee contends that the Opening Written down value of AY 2009-10 should be taken as Rs.74,94,11,161/- as against Rs.56,20,58,371/-, since the depreciation of Rs.18,73,52,790/- has not been allowed to the assessee in AY 2008-09. In Ground no.11, the assessee is making an alternative contention to Ground no.10, if it was not accepted, viz., that the amount of depreciation pertaining to AY 2008-09 amounting to Rs.18,73,52,790/- should have been allowed in AY 2009-10 as brought forward unabsorbed depreciation. In Ground no.12, the assessee seeks additional amount of depreciation of Rs.2,62,345/- on software expenses, which was capitalized in AY 2007-08.
4 Thermo Fisher Scientific India Private Limited
Admittedly, the contentions raised by the assessee in Ground no.10 and 11 are claims related to the main ground regarding allowing depreciation on goodwill. The contention raised in ground no.12 is a new claim. We noticed that the main issue relating to depreciation on goodwill has been restored to the file of AO by the Tribunal in its order dated 28-06-2019. The new claim raised in Ground no.12 also requires examination at the end of AO.
Accordingly, we deem it proper to restore all these additional grounds also to the file of AO for examining them in accordance with law, after affording adequate opportunity of being heard to the assessee.
In the result, all the three additional grounds mentioned above are treated as allowed for statistical purposes.
Order pronounced in the open court on 24.08.2022.
Sd/- Sd/- (ABY T. VARKEY) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated : 24/08/2022 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy//
(Assistant Registrar) PS ITAT, Mumbai