CDK GLOBAL (INDIA) PRIVATE LIMITED,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), HYDERABAD

The assessee's first and foremost substantive grievance seeks to reverse both the lower authorities’ action disallowing depreciation claim on goodwill involving a sum of Rs.37,97,16,442 raised u/s. 32 of the Act. Suffice to say, it emerges during the course of hearing that the assessee had raised the very substantive ground in the preceding year A.Y. 2015-16 appeal as well wherein he had restored the same back to the Assessing Officer for his necessary verification of the unilateral advance pricing agreement “APA” dt.18.-08.2021and the corresponding terms incorporated therein u/s. 92CC of the Act excluding the goodwill in issue from “operating expenses” under clause (I)(b)(ii) thereof. Suffice to say, we therefore adopt judicial consistency and direct the Assessing Officer to finalise its contiguous factual verification as per law. We further make it clear that the assessee had not challenged the impugned disallowance on goodwill on merits or legality otherwise. This first and foremost substantive ground is treated as partly allowed for statistical purposes therefore.

Next comes the second issue of 40(a)(ia) disallowance alleged to have been disallowed in preceding assessment year but claimed in the impugned assessment year on actual payment basis in light of first proviso thereof. The fact remains that the CIT(A) has refused to entertain the assessee's corresponding additional ground as an after thought one only. Faced with this situation and more so in view of the fact that the assessee's foregoing first substantiate ground already stands restored back to the Assessing Officer, we adopt the very course of action herein and leave it open to the Assessing Officer to finalise this consequential verification in light of 40(a)(ia) first proviso as per law. Ordered accordingly.

Next comes the third issue of short grant of interest amounting to Rs.37,97,16,442 u/s.244A of the Act. Both the parties are ad idem opinion during the course of hearing that instant third issue also requires the Assessing Officer’s factual verification regarding the corresponding refund figure; if any. We therefore restore the instant issue as well back to the assessing authority in the very terms.

Lastly comes the assessee's petition dt.06.10.2020 seeking to claim education cess liability of Rs.5,77,565 as an allowable deduction by way of additional ground. Case law Allcargo Global Logistics Ltd. Vs. DCIT 137 ITD 217 (Bom) (SB) after considering National Thermal Powre Co. Ltd. Vs. CIT 229 ITR 383 (SC) holds that we can very well entertain such a pure question of law so as to determine correct tax liability of an assessee provided all facts relevant thereto are already on record. We therefore reject Revenue’s technical aspects against the assessee's foregoing petition in very terms.

This assessee's appeal is partly allowed in above terms.