BAKERI PROJECTS PRIVATE LIMITED,AHMEDABAD vs. THE DY.CIT, CIRCLE-1(1)(1), AHMEDABAD

ITA 785/AHD/2023Status: DisposedITAT Ahmedabad10 October 2025AY 2016-17Bench: Dr. BRR Kumar (Vice President), Ms. Suchitra Kamble (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance of depreciation on goodwill by the AO and CIT(A) was incorrect. The depreciation is allowable based on judicial precedents, including Supreme Court judgments, and the amendments made by the Finance Act, 2021, are prospective and do not affect the current assessment year.

What were the facts?

Bakeri Projects Pvt. Ltd. claimed depreciation on goodwill arising from an amalgamation scheme for AY 2016-17. The Assessing Officer disallowed this depreciation, and the CIT(A) partly allowed the assessee's appeal. The assessee is further appealing this decision.

What were the issues?

Whether depreciation on goodwill arising from an amalgamation scheme is allowable for AY 2016-17, considering the relevant sections and judicial precedents.

Which sections of the Income-tax Act were involved?

Section 32,Section 43(1),Section 43(6),Section 274,Section 271(1)(c),Section 143(2)

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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: Dr. BRR Kumar & Ms. Suchitra Kamble

For Appellant: Shri S.N. Soparkar, A.R
For Respondent: Shri R.P. Rastogi, CIT-D.R

Per Suchitra Kamble, Judicial Member:

This is an appeal filed against the order dated 11-08-2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2016-17. 2. The grounds of appeal are as under:- “1. The order of the Learned CIT(A) dated 11.08.2023 (hereinafter referred to as the 'impugned order') is cryptic and passed without assigning any reasons.

2.

The Learned CIT(A) and AO have erred in disallowing depreciation under Section 32 of the Act on goodwill recognized in the course of amalgamation scheme. The CIT(A) and AO failed to appreciate that goodwill is an asset under Explanation 3(b) to Section 32(1) of the Act. Bakeri Projects Pvt

The order continues below.

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