“Section 43(6)(c)(i)”
The decision most relied on for Section 43(6)(c)(i) is Marketing Pvt. Ltd. v. DCIT (122 Taxmann.com 40), cited in 41 judgments on BharatTax.
Leading authorities on Section 43(6)(c)(i)
Where goodwill is recorded pursuant to a merger based on purchase consideration determined by a valuation report, and no goodwill is transferred from the predecessor's books, the fifth proviso to section 32(1) of the Income-tax Act, 1961, is not applicable, and thus depreciation on such goodwill is not allowable.
Where an expense is incurred for the purpose of acquiring a capital asset, and that asset is subsequently sold, the expenditure must be considered as part of the cost of acquisition of that asset for the purpose of calculating capital gains. This is because the expense forms an integral part of the cost of acquiring the asset, not an expenditure of revenue nature.
Depreciation is not allowed on goodwill if it arises from book entries and has no identifiable cost of acquisition. This applies even when goodwill is acquired as part of a scheme of arrangement or amalgamation.
The Assessing Officer can apply Rule 8D for disallowance under Section 14A only if they are not satisfied with the correctness of the assessee's claim regarding expenditure in relation to exempt income, after considering the assessee's accounts. Invocation of Rule 8D is not automatic.
The Tribunal has the discretion to admit additional evidence in the interest of justice if it deems it necessary for the proper adjudication of a matter, even if the application is filed by a party to the appeal and not solely on the Tribunal's own initiative.
