“going concern”

Judicial DoctrinesSlump SaleSlump Sale477 judgments

The decision most relied on for going concern is Areva T&D India Ltd. v. DCIT (345 ITR 421), cited in 97 judgments on BharatTax.

Leading authorities on going concern

Areva T&D India Ltd. v. DCIT

345 ITR 421 · 2012 · High Court

citing judgments

Business contracts and commercial rights of similar nature qualify as intangible assets under Section 32(1)(ii) and are eligible for depreciation. The decision also affirms that goodwill is an intangible asset eligible for depreciation.

Triune Energy Services (P.) Ltd. v. DCIT

65 Taxmann.com 288 · 2016 · High Court

citing judgments

When a business is purchased as a going concern, the consideration paid in excess of the value of its tangible assets is classified as goodwill, which is an intangible asset eligible for depreciation without needing a separate valuation.

Harshad J.Choksi v. CIT, Bombay City- VII

25 Taxmann.com 567 · 2012 · High Court

citing judgments

The conditions for claiming a bad debt deduction under Section 36(1)(vii) read with Section 36(2) are not fulfilled if the assessee fails to provide details of the parties associated with the debts or evidence that these amounts were offered to tax in earlier years. An alternate claim for loss under Section 28 is denied without evidence substantiating the loss in the relevant assessment year.

L.Ve. Vairavan Chettiar v. CIT

72 ITR 114 · 1969 · High Court

citing judgments

A business concern can still be considered to be carrying on its business even if there are long intervals of inactivity, provided it is kept alive, retains its registered office, and holds meetings. It is not necessary for a business to have work constantly to be considered in existence.

Everest Kanto Cylinders Ltd. v. DCIT

34 Taxmann.com 9 · 2013 · High Court

citing judgments

Depreciation is allowable on goodwill, even if it's considered an intangible asset representing future profits, following the Supreme Court's decision in CIT v. SMIFS Securities Ltd.

Bharat Hari Singhania v. CWT

19 SOT 612 · 2008 · High Court

citing judgments

While the case involves a reference to "fresh tangible material", "valuation of shares", "going concern", and "indexed cost of acquisition", the provided passages do not clearly articulate the specific holding of Bharat Hari Singhania v. CWT.

Mahindra & Mahindra Ltd. v. DCIT, 313 ITR (AT) 263 (SB)

110 ITD 59 · 2008 · ITAT

citing judgments

The Assessing Officer cannot improve his assessment by adopting a new theory during reassessment proceedings.

CIT v. Southern Petrochemical Industries Corporation Ltd.

291 ITR 362 · 2007 · High Court

citing judgments

Depreciation is allowable on standby machinery that is kept ready for use, even if not actually put to use due to reasons such as raw material paucity. This is permissible as long as the business is a going concern.

Judgments citing going concern

Wilfred D'Souza, Mangaluru vs. Assistant Commissioner of Income Tax, Central Circle-2, Mangaluru

In the result, ITA Nos.323 & 324/Bang/2022 are allowed and the appeals filed by the assessee in ITA Nos

ITA 327/BANG/2022[2012-13]Status: DisposedITAT Bangalore07 Oct 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Smt. S. Praveena, D.R

Section 132Section 143Section 153ASection 246A

papers etc., of the Partnership business shall belong to the Continuing Partner and he shall continue the business of the said firm as going concern with full and irrevocable authority to collet all the outstanding assets of the Partnership and ask for, demand, to institute suits and continue the existing ... Souza, Mangaluru Page 25 of 41 taken over all the assets and liabilities and is continuing the business of the disallowed firm as a going concern. The Assessee submitted that when the Partnership Firms were dissolved, as a Partner and further as a matter of contractual obligation, the Assessee

Wilfred D'Souza, Mangaluru vs. Assistant Commissioner of Income Tax, Central Circle-2, Mangaluru

In the result, ITA Nos.323 & 324/Bang/2022 are allowed and the appeals filed by the assessee in ITA Nos

ITA 326/BANG/2022[2011-12]Status: DisposedITAT Bangalore07 Oct 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Smt. S. Praveena, D.R

Section 132Section 143Section 153ASection 246A

Wilfred D'Souza, Mangaluru vs. Assistant Commissioner of Income Tax, Central Circle-2, Mangaluru

In the result, ITA Nos.323 & 324/Bang/2022 are allowed and the appeals filed by the assessee in ITA Nos

ITA 325/BANG/2022[2010-11]Status: DisposedITAT Bangalore07 Oct 2022AY 2010-11

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Smt. S. Praveena, D.R

Section 132Section 143Section 153ASection 246A

Wilfred D'Souza, Mangaluru vs. Assistant Commissioner of Income Tax, Central Circle-2, Mangaluru

In the result, ITA Nos.323 & 324/Bang/2022 are allowed and the appeals filed by the assessee in ITA Nos

ITA 324/BANG/2022[2009-10]Status: DisposedITAT Bangalore07 Oct 2022AY 2009-10

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Smt. S. Praveena, D.R

Section 132Section 143Section 153ASection 246A

Wilfred D'Souza, Mangaluru vs. Assistant Commissioner of Income Tax, Central Circle-2, Mangaluru

In the result, ITA Nos.323 & 324/Bang/2022 are allowed and the appeals filed by the assessee in ITA Nos

ITA 323/BANG/2022[2008-09]Status: DisposedITAT Bangalore07 Oct 2022AY 2008-09

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Smt. S. Praveena, D.R

Section 132Section 143Section 153ASection 246A

Kali Bmh Systems Pvt. Ltd., Kumbakonam vs. DCIT, Circle - 2 (1), Trichy

In the result, the appeal filed by the assessee is dismissed

ITA 864/CHNY/2020[2013-14]Status: DisposedITAT Chennai16 Sept 2022AY 2013-14

Bench: Shri V. Durga Rao & Shri Manoj Kumar Aggarwalआयकर अपील सं./I.T.A. No.864/Chny/2020 िनधा"रण वष"/Assessment Year: 2013-14 Kali Bmh Systems P. Ltd., The Deputy Commissioner Of 42/6, B2, Chennai Road, Vs. Income Tax, Melacauvery, Kumbakonam 612 002. Circle 2(1), Trichy. [Pan:Aadck0974H]

For Appellant: NoneFor Respondent: Shri D. Hema Bhupal, JCIT

Section 143(2)Section 143(3)Section 47

succession of a partnership firm by a company is not regarded as a transfer under the Act where its business is transferred as a going concern, provided, of course, it is not a device to evade tax by realizing the value of the assets by its partners, by sale

M/S Bosch Limited, Bangalore vs. Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 1629/BANG/2018[2013-14]Status: DisposedITAT Bangalore13 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14 Bosch Limited, Vs. The Assistant Commissioner Hosur Road, Adugodi, Of Income Tax, Ltu, Bangalore – 560 030. Circle 1, Pan: Aaacm 9840P Bangalore. Appellant Respondent Appellant By : Shri Percy Pardiwala, Advocate Respondent By : Shri V S Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 01.09.2022 Date Of Pronouncement : 13.09.2022 O R D E R Per Padmavathy S.2. This Appeal Is Against The Order Of The Cit(Appeals), Bangalore-9, Bangalore Dated 31.3.2018 For The Assessment Year 2013- 14. 3. The Assessee Raised Grounds Pertaining To The Following Issues:- Deduction U/S. 35(2Ab) Computed On Net Expenditure As Opposed To Gross Expenditure Disallowance Of Provision For Bad & Doubtful Debts I) Disallowance Of Provision For Long Term Service Award Disallowance Of Expenditure U/S. 14A Of The Act Ii) Page 2 Of 67

For Appellant: Shri Percy Pardiwala, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 14ASection 35Section 37Section 43BSection 80J

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND Ms. PADMAVATHY S, ACCOUNTANT

Raj Rayon Industries Ltd, Mumbai vs. PCIT, Mumbai

In the result, the appeal of the assessee is allowed

ITA 830/MUM/2022[2017-18]Status: DisposedITAT Mumbai02 Sept 2022AY 2017-18

Bench: Shri Aby T. Varkey, Jm & Shri Gagan Goyal, Am आयकर अपील सं/ I.T.A. No.830/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2017-18) Raj Rayon Industries Ltd बिधम/ Pcit-3 Survey No. 177/1/3 & 612, 6Th Floor, Aayakar Vs. 177/1/4, Village Surangi, Bhavan, Maharishi Karve Silvassa-396230 (Ut Of Road, Mumbai-400020. Dadra & Nagar Haveli & Daman & Diu)-396230. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacr7820E (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Satish Mody Revenue By: Shri T. Sankar (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 25/07/2022 घोषणा की तारीख /Date Of Pronouncement: 02/09/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Principal Commissioner Of Income Tax-03 [Hereinafter Referred To As The “Pcit”], Mumbai Dated 03.03.2022 For Assessment Year 2017-18 Passed Under Section 263 Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”).

For Appellant: Shri Satish ModyFor Respondent: Shri T. Sankar (Sr. AR)

Section 143(3)Section 147Section 148Section 263

dominant objects of the IBC is to see that an attempt has to be made to revive the Corporate Debtor and make it a going concern. For that a Resolution Applicant has to prepare a Resolution Plan on the basis of the Information Memorandum containing various details that have been

Atos It Services Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 226/BANG/2021[2016-17]Status: DisposedITAT Bangalore25 Aug 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri Dhanesh Bafna, CAFor Respondent: Shri Bijoy Kumar Panda, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 92B(2)Section 92C

submitted that the assessee has taken over the business in relation to Information Technology Outsourcing services from XBSIPL as a going concern on slump sale basis, pursuant to the agreement dated 24.3.2015 for a consideration of Rs.98,09,65,904. Out of the total consideration, Rs.93,51,41,592 represents

The Great Eastern Shipping Co., Mumbai vs. Addl.C.I.T. RG.5(3), Mumbai

In the result, appeal by assessee is partly allowed in the terms aforesaid

ITA 197/MUM/2013[2008-09]Status: DisposedITAT Mumbai11 Aug 2022AY 2008-09

For Appellant: Shri Percy j. Pardiwalla, Sr. Advocate with S/Sh. Jitendra Jain& Rashid PoonawalFor Respondent: Dr.Yogesh Kamat , CIT and Shri Sambit Mishra

Section 115JSection 143(3)Section 14ASection 14A(2)

tonnage tax company. In our opinion, write back of these items is to be considered as income from core activity. In a going concern, such write backs and making of supplementary provisions takes place. The Assessing Officer as well as the Commissioner (Appeals) have treated the very same income which

Abbott Healthcare P. Ltd, Mumbai vs. ACIT 2(1)(1), Mumbai

ITA 570/MUM/2018[2011-12]Status: DisposedITAT Mumbai02 Aug 2022AY 2011-12

Bench: Shri Vikas Awasthy & Shri Amarjit Singh आअसं.570/मुं/2018 ("न.व. 2011-12) Abbott Healthcare Private Limited., 4, Corporate Park, Sion -Trombay Road, Chembur, Mumbai 400 071. Pan: Aaack-3935-D ..... अपीलाथ" /Appellant बनाम Vs. Asstt. Commissioner Of Income Tax, Circle 2(1)(1), Room No.561, 5Th Floor, Aaykar Bhavan, M.K.Road, Mumbai 400 020 ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : S/Shri Raghavendra Singh/ Lokesh Shah/Kiran Belkar ""तवाद" "वारा/Respondent By : Smt. Monica Khare सुनवाई क" "त"थ/ Date Of Hearing : 04/05/2022 घोषणा क" "त"थ/ Date Of Pronouncement : 02/08/2022 आदेश/ Order Per Vikas Awasthy, Jm:

For Appellant: S/Shri Raghavendra Singh/For Respondent: Smt. Monica Khare

Section 254(2)Section 32Section 32(1)

healthcare solutions business and mass market branded Formulation – True CareTM business) a branded generic business of M/s Piramal Health Care Ltd. as a going concern on slump sale basis w.e.f. 08/09/2010. The assessee claimed depreciation @25% on Non-compete Fee of Rs.513.54 crores paid as part of slump sale agreement

ACIT 13 (3)(2), Mumbai vs. M/S Zelle Biotechnology Pvt Ltd., Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 7675/MUM/2019[2016-17]Status: DisposedITAT Mumbai27 Jul 2022AY 2016-17

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleacit-13(3)(2) V. M/S. Zelle Biotechnology Pvt. Ltd., Room No. 229/219, 2Nd Floor 110, Udyog Bhavan Aayakar Bhavan, M.K. Road Sonawala Road, Goregaon (E) Mumbai - 400020 Mumbai – 400063 Pan: Aaacz2106R (Appellant) (Respondent) Assessee By : Shri Meet Shah Department By : Shri Hoshang B. Irani

For Appellant: Shri Meet ShahFor Respondent: Shri Hoshang B. Irani

Section 143(2)Section 143(3)Section 32Section 32(1)

expression "goodwill" subsumes within it a variety of intangible benefits that are acquired when a person acquires a business of another as a going concern. From an accounting perspective, it is well established that 'goodwill' is an intangible asset, which is required to be accounted for when a purchaser acquires ... business as a going concern by paying more than the fair market value of the net tangible assets, that is, assets less liabilities. The difference in the purchase consideration and the net value of assets and liabilities is attributable to the commercial benefit that is acquired by the purchaser. Such

DCIT - 3(3)(2), Mumbai vs. V. Hotels Ltd.(Formerly Known As Tulip Hospitality Services Ltd), Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 5664/MUM/2018[2013-14]Status: DisposedITAT Mumbai20 Jul 2022AY 2013-14

Section 32(1)(ii)

fact that intangible assets were acquired by appellant on slump sale basis", in such a case of acquisition of an undertaking as a going concern, the composite consideration cannot be bifurcated between various assets heeds to be accepted. The allocation of cost of acquisition for each block of assets

DCIT - 3(3)(2), Mumbai vs. V. Hotels Ltd.(Formerly Known As Tulip Hospitality Services Ltd), Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 5663/MUM/2018[2013-14]Status: DisposedITAT Mumbai20 Jul 2022AY 2013-14

Section 32(1)(ii)

DCIT - 3(3)(2), Mumbai vs. V. Hotels Ltd.(Formerly Known As Tulip Hospitality Services Ltd), Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 5662/MUM/2018[2012-13]Status: DisposedITAT Mumbai20 Jul 2022AY 2012-13

Section 32(1)(ii)

M/S Te Connectivity India Pvt Ltd, Bengaluru vs. Deputy Commissioner of Income Tax, Ltu, Circle-1, Bengaluru

In the result, the appeal by the assessee is partly allowed

ITA 2680/BANG/2017[2013-14]Status: DisposedITAT Bangalore18 Jul 2022AY 2013-14

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sumeet Khurana, CAFor Respondent: Shri V.S. Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 40Section 92

provisions of section 50B of the Act.” 65. The assessee has entered into business transfer agreement for sale of tooling parts business as a going concern for a consideration of Rs.10,64,80,000 and claimed capital loss of Rs.1,67,30,000. The AO called for details regarding calculation

Fancy Builders Private Limited, Mumbai vs. ITO, 5(1)(4), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 5171/MUM/2019[2012-13]Status: DisposedITAT Mumbai15 Jul 2022AY 2012-13

Section 143(3)

Cases 657 that business is not confined to being busy; in many businesses long intervals of inactivity occur. . . . "The concern is still a going concern though a very quite Assessment year: 2012-13 Page 5 of 6 one." After elaborate survey of judicial precedents on the issue, Their Lordships concluded

Loreal India Pvt. Ltd, Mumbai vs. Addl/Jt/Dy/ACIT/ITO/NFAC, Delhi

In the result, the appeal filed by the assessee for AY 2016-17 is treated as partly allowed

ITA 802/MUM/2022[2017-18]Status: DisposedITAT Mumbai29 Jun 2022AY 2017-18

Section 143(3)Section 144CSection 92C

this case, the assessee entered into a business transfer agreement with Rahul Healthcare for purchase of Soap manufacturing unit of Rahul Healthcare as a going concern on the lump-sum basis. The business transfer agreement was amended vide agreement dated 8th July 2014 and again on 31st October ... expression "goodwill" subsumes within it a variety of intangible benefits that are acquired when a person acquires a business of another as a going concern. 31. A perusal of draft assessment order shows that the assessee failed to discharge the source of “goodwill‟ (para 4.6). The ld. DRP while considering

L' Oreal India P. Ltd., Mumbai vs. National E-Assessment Centre/ Dy CIT-Circle-7(1)(1), Mumbai

In the result, the appeal filed by the assessee for AY 2016-17 is treated as partly allowed

ITA 1198/MUM/2021[2016-17]Status: DisposedITAT Mumbai29 Jun 2022AY 2016-17

Section 143(3)Section 144CSection 92C

Travel Post Pvt. Ltd., Mumbai vs. ITO, Ward -13 (3)(4), Mumbai

ITA 286/MUM/2022[2015-16]Status: DisposedITAT Mumbai21 Jun 2022AY 2015-16

Bench: Shri Kuldip Singh & Shri Om Prakash Kantassessment Year: 2015-16

For Appellant: NoneFor Respondent: Shri Kiran P. Unavekar, D.R

Section 143(3)

claim in respect prior period expenses though the Assessing Officer has accepted the fact the same are business expenditure and the business is a going concern. 4. Without Prejudice the CIT (Appeals) erred in not considering depreciation on the capital asset. 5. The Appellant craves leave to, add to, alter