TECH PACIFIC INDIA LTD ( NOW KNOWN AS INGRAM MICRO INDIA LTD),MUMBAI vs. DCIT (OSD-II) CEN RG 7, MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the orders,dtd 22.1.13 of CIT(A)-40 Mumbai the assessee has filed the appeals for the above mentioned AY.s .assessee-company is engaged in the business of computer software and automation. The effective GOA for all the AY.s is identical i.e. levy of penalty u/s. 271(1)(c ) of the Act. For the sake of convenience,we are adjudicating all the appeals by a single order. ITA/2337/M/2013-AY 2002-03: 2.An action u/s. 132/133A was carried out on 6.9.2007 in the business premises of the assessee-group. During the search and survey proceedings certain documents were impounded/seized.A notce u/s. 153A was issued to the assessee on 23.8.2008.In response to the notice a return of income was filed on 24.8.2008, declaring total income of Rs.35.23 crores. The Assessing Officer(AO)completed the assessment ,u/s.153A r.w.s 143(3) of the Act,on 31.12.2009,determining the income of the assessee at Rs.35.78 crores. The AO also initiated penalty proceedings u/s. 271(1)(c) of the Act.

3.During the assessment proceedings,the AO noticed that the assessee had claimed and depreciation of Rs.35,39,132/- (@25%) on goodwill,that the assessee had claimed that 1

2337, 2338 & 39/Mum/2013-Techpacific goodwill was an intangible asset and that the same was acquired from original owner of business which carried the brand name of the product,that goodwill had been acquired as per part of the purchase consideration in terms of the business transfer agreement dt.2.5.2000 from Tech Pacific Technology India Ltd. However, the AO did not accept the contention of the assessee and disallowed the claim. In the meanwhile the assessee challenged the additions made by the AO before the First Appellate Auhtority (FAA).Upholding the order of the AO,he held that there was no provision in the Act for allowing depreciation on goodwill.The AO also initiated the penalty proceedings. Vide his notice,dt.23.3.12,the AO asked the assessee to make submissions against the proposed penalty. As per the AO the assessee did not file any reply. Vide his order dt.16.3.12 he held that assessee had concealed the particulars of income and had furnished inaccurate particulars by claiming depreciation on goodwill. He levied a penalty of Rs.2,63,470/- as per the provisions of section 271(1)(c) of the Act.Aggrieved by the penalty order of the AO,the assessee preferred an appeal before the FAA,who confirmed the order of the AO.

4.During the course of hearing before us, the Authorised Representative(AR)stated that quantum additions made/upheld by the AO/FAA were challenged by the assessee before the Tribunal,that the ITAT had allowed the appeal of the assessee and that had reversed the order of the FAA.(ITA2383-2385/ Mum/ 2011-AY2002-03 to 2004-05,dt.16.7.15). The Departmental Representative(DR)left the issue to the discretion of the Bench. We find that the disallowance made by the AO with regard to depreciation on goodwill, was deleted by the ITAT,while deciding the quantum appeal(supra).We would like to reproduce the relevant portion of the order and same reads as under :- “4.1.The assessment for A.Y 2002-03 was completed by disallowing bad debts claimed Rs. 8,76.448/-, depreciation on goodwill Rs. 35,39,132/-, depreciation on commercial vehicles-Rs. 5,33,790/- and Staff/ other welfare expenses at Rs. 3,05,508/-. Assessment for A.Y 2003-04 was completed by making disallowances on similar heads though with different quantum and the same is done in A.Y. 2004-05. 5.Aggrieved by the assessments, the assessee carried the matter before the Ld. CIT(A) but without any success. 6.Before us, the Ld. Counsel for the assessee stated that the additions/disallowances which was not made in the normal/regular assessment and in respect whereof no incriminating material was found during the search cannot now be made for the first time in the assessment made u/s. 153A of the Act, since it would confer upon the AO the power to review or revise his own order. It is the say of the Ld. Counsel that this proposition has been confirmed by the Hon’ble High Court of Bombay in the case of Continental Warehousing Corporation and All Cargo Global Logistics ltd (supra). 7.We have carefully considered the orders of the authorities below. We have also gone through the decision of the Hon’ble Jurisdictional High Court (supra). It is an undisputed fact that there was no incriminating material found during the search for making the impugned disallowances/additions. The ratio laid down by the Hon’ble Jurisdictional High Court (supra) squarely apply on the facts of the case wherein the Hon’ble High Court has held as under:

2337, 2338 & 39/Mum/2013-Techpacific