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Income Tax Appellate Tribunal, DELHI BENCH: “G”, NEW DELHI
Before: SHRI BHAVNESH SAINI & SHRI O.P. KANT
ORDER PER O.P. KANT, A.M.: The present appeal is directed against the order of CIT(A)-9, New Delhi, dated 23.12.2016, for assessment year 2012-13, raising following effective ground:
“On the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the disallowance of Rs.10,29,60,726/- on account of Depreciation on Goodwill."
At the outset, the learned counsel of the assessee submitted that the sole issue in dispute is covered by the decision of the Tribunal in assessee’s own case pertaining to assessment year 2010-11. Therefore, he prayed that the order of the learned Commissioner of Income Tax (Appeals) on issue in dispute may be upheld.
On the other hand, Ld. DR relied on the order of the Assessing Officer. 4. We have heard the rival submissions and perused the relevant material on record, including Tribunal’s order passed in ITA No.3887/Del/2016. In the sole issue, the Revenue has challenged the deletion of disallowance of Rs.10,29,60,726/- on account of depreciation on goodwill. The Assessing Officer has made addition of Rs.10,29,60,726/- on the ground that the assessee has not claimed depreciation on goodwill at the time of filing of return. From the impugned order, we find that the Ld. CIT(A) deleted the disallowance by relying on the decision of Hon’ble Supreme Court in the case of Smifs Securities Ltd., wherein it was held that “Goodwill is an asset under Explanation 3(b) to section 32(1) and, thus it is eligible for depreciation. Explanation-5 to Section 32(1) of the Income-tax Act, 1961, makes it mandatory for the AO to grant depreciation irrespective of whether the assessee has claimed the same or not. 4.1 We find that the issue-in-dispute has already been decided by the Tribunal vide order dated 9th November, 2017, in assessee own case in (AY: 2010-11). The relevant portion of the order is extracted below:
4. We have considered the submissions of both the parties and perused the material available on record. In the present case, it is noticed that the Ld. CIT(A) allowed the claim of the cassessee by keeping in view the provisions contained in Explanation 5 to S. 32(1) of the Act which read as under: Explanation -5 to Section 32(1) of the Income Tax Act, 1961 “Explanation 5: For the removal of doubts, it is hereby declared that the provisions of this sub-section shall apply whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income.
On perused of the above provision, it is clear that even if the assessee had not claimed any deduction in respect of depreciation in computing the total income, the deduction is allowable as per the provisions of S. 32(1) of the Act. We, therefore, do not see any valid ground to interfere with the findings given by the Ld. CIT(Appeals). Hence, the Departmental Appeal is dismissed.”
5. Respectfully following the finding of the Tribunal (supra), we uphold the order of the Ld. Commissioner of Income Tax (Appeals) on the issue-in-dispute. Accordingly, ground of the Revenue is dismissed.
In the result, appeal of Revenue is dismissed. Order is pronounced in the open court on 29th January, 2019.