DY CIT CIRCLE- 12(1)(1), MUMBAI vs. M/S ARCHROMA INDIA PVT LTD., THANE

ITA 590/MUM/2020Status: DisposedITAT Mumbai29 June 2022AY 2016-178 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the 5th proviso to Section 32(1) of the Income Tax Act is applicable for computing depreciation on assets acquired under a slump sale, even without invoking Section 170. The balancing figure between the slump sale value and the WDV of assets taken over qualifies as goodwill and is eligible for depreciation.

What were the facts?

The Revenue appealed an order concerning depreciation on assets taken over under a slump sale. The assessee had acquired assets from BASF India Ltd. and Clariant Chemicals (India) Ltd. The core dispute revolved around whether Section 170 of the IT Act applied and the correct method for calculating depreciation.

What were the issues?

Whether Section 170 of the IT Act applies to assets acquired under a slump sale, and how depreciation should be computed on such assets, including any goodwill element.

Which sections of the Income-tax Act were involved?

Section 32,Section 170,Section 2(42C),Section 50B

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI S. RIFAUR RAHMAN, HONBLE & SHRI SANDEEP SINGH KARHAIL, HONBLEShri Madhur Agrawal

For Appellant: Shri Madhur Agrawal
For Respondent: Ms. Shailaja Rai
Hearing: 07.06.2022Pronounced: 29.06.2022

PER S. RIFAUR RAHMAN (AM)

1.

This appeal is filed by the Revenue against order of the Learned Commissioner of Income Tax (Appeals)–20, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 09.10.2019 for the A.Y.2016-17. 2. Revenue has raised following grounds in its appeal: - "i) Whether on the facts and in the circumstances and law was right in holding that with respect to the assets taken over from BASF India Ltd there was no succession of business and accordingly the assessee's case does not falls within the ambit of provision of section 170 of the IT Act. whereby the 6th proviso to section 32 is not 2 M/s. Archroma India Pvt. Ltd.,

The order continues below.

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