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“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
97
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
42
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
31
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
31
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
19
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
11
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
10
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
10
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

DCIT CC- 3(4), Mumbai vs. Patel Engineering Limited, Mumbai

ITA 3061/MUM/2024[2018]Status: DisposedITAT Mumbai31 Dec 2024
Section 194ASection 201

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER

Patel Engineering Limited, Mumbai vs. DCIT-CC-3(4), Mumbai

ITA 2802/MUM/2024[2018-19]Status: DisposedITAT Mumbai31 Dec 2024AY 2018-19
Section 194ASection 201

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER

Patel Engineering Limited, Mumbai vs. DCIT CC-3(4), Mumbai

In the result, appeals of the Revenue are dismissed, except for one ground no

ITA 2801/MUM/2024[2017-18]Status: DisposedITAT Mumbai31 Dec 2024AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 194ASection 201

account with lenders leading to non-availability of M/s. Patel Engineering Limited any credit facilities from lenders required to run the business as a going concern. As part of S4A, the lenders also sanctioned additional non fund- based limits (i.e., Bank guarantees) which is essential for bidding for new projects

Deputy Commissioner of Income-Tax, Central Circle-5(4), Mumbai vs. Larsen and Toubro Ltd, Mumbai

ITA 3369/MUM/2023[2009-10]Status: DisposedITAT Mumbai20 Dec 2024AY 2009-10

Bench: Smt Beena Pillaishri Omkareshwar Chidara

Section 147Section 148Section 2Section 48Section 50B

sale transactions itself. 9. The necessary facts for appreciation of the question are that the assessee sold a part of its unit as a going concern. In the process the transferee took over undertaking with the management and employees. The assessee had created subsequently modified at two different stages ... assessee entered into a business transfer agreement dated 14/05/2008 for transfer by way of slum sale its ready mix concrete business undertaking as a going concern. It is submitted that insofar as capital gains arising in respect of the said undertaking is concerned, full value of consideration was taken

Barmalt (India) P.Ltd, New Delhi vs. ACIT, Circle 4(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 2709/DEL/2023[2016-17]Status: DisposedITAT Delhi06 Dec 2024AY 2016-17

Bench: Shri S.Rifaur Rahman & Shri Sudhir Pareekbarmalt (India) P. Ltd., Vs. Acit, Circle 4 (2), F-28/5, Okhla Industrial Area, Phase-Ii, New Delhi. Delhi – 110 020. (Pan : Aaacb2825M) (Appellant) (Respondent) Assessee By : Shri Praveen Gupta, Ca Revenue By : Shri Kanv Bali, Sr. Dr Date Of Hearing : 25.09.2024 Date Of Order : 06.12.2024 O R D E R Per S. Rifaur Rahman,Am: 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To ‘Ld. Cit (A)’] Dated 27.07.2023 For Assessment Year 2016-17 Raising Following Grounds Of Appeal :- “1. That The Order Passed By The Cit(A) Is Contrary To The Facts & Bad In Law & Passed In A Unilateral Manner Without Adequate Opportunity Being Extended To The Assessee On Matters Discussed In The Order, Is Grossly

For Appellant: Shri Praveen Gupta, CAFor Respondent: Shri Kanv Bali, Sr. DR
Section 143(3)Section 3Section 37

clearances from HUDA for commencement of construction activities on its plot of land during the year under consideration. On the basis of being a going concern, assessee has continued the operation and claimed expenses of Rs.16,74,777/- as under :- (INR in Rupees) Claimed Disallowed ... also in the year ending 31.03.2016 and submitted that assessee is a company and is running the business on the basis of concept of going concern, assessee has to incur certain expenditure. Further he submitted that Assessing Officer has even disallowed the depreciation which is a period cost

The Dy. Commissioner of Income Tax, Circle-1(1)(1), Vadodara vs. Ambalal Sarabhi Enterprises Limited, Vadodara

ITA 2067/AHD/2016[2007-08]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2007-08

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

The Dy. Commissioner of Income Tax, Circle-1(1)(1), Vadodara vs. Ambalal Sarabhi Enterprises Limited, Vadodara

ITA 2066/AHD/2016[2005-06]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2005-06

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Ambalal Sarabhai Enterprises Ltd., Baroda vs. The Dy. Commissioner of Income Tax, Circle-1(1)(1), Baroda

ITA 1783/AHD/2016[2007-08]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2007-08

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Ambalal Sarabhai Enterprises Ltd., Baroda vs. The Dy.Commissioner of Income Tax, Circle-1(1)(1), Baroda

ITA 1782/AHD/2016[2005-06]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2005-06

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

The Dy.Commissioner of Income Tax, Circle-1(1)(1), Vadodara vs. Ambalal Sarabhai Enterprises Limited, Vadodara

ITA 1594/AHD/2016[2004-05]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2004-05

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Ambalal Sarabhai Enterprises Ltd., Baroda vs. The Dy. Commissioner of Income Tax-1(1)(1), Baroda

ITA 1291/AHD/2016[2006-07]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2006-07

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Ambalal Sarabhai Enterprises Ltd., Baroda vs. The Dy. Commissioner of Income Tax-1(1)(1), Baroda

ITA 1290/AHD/2016[2004-05]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2004-05

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Ambalal Sarabhai Enterprises Limited, Baroda vs. The ACIT., Circle-1(1), Baroda

ITA 1773/AHD/2015[2003-04]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2003-04

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Ambalal Sarabhai Enterprises Limited, Baroda vs. The ACIT., Circle-1(1), Baroda

ITA 1772/AHD/2015[2002-03]Status: DisposedITAT Ahmedabad03 Dec 2024AY 2002-03

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं/ िनधा"रण वष"/ Sl. Appeal(S) By :

For Appellant: Shri Bandish Soparkar, A.R. &For Respondent: Shri R.N. Dsouza, CIT-DR &
Section 143(3)Section 14ASection 40Section 40A(3)Section 40A(7)Section 43B

Revenue) Asst. Years : 2002-03 to 2007-08 5 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1 ... purpose of business carried on by the appellants. 1.4 That CIT(A) has further failed to appreciate that the appellants is a going concern and that the expenditure of interest is incurred after the commencement of the business. 1.5 IN THE FACTS OF THE CASE, interest of Rs.1

Income Tax Officer-1(1)(3), Mumbai vs. Gas and Power Investment Company Limited, Mumbai

In the result, this appeal filed by the revenue is dismissed

ITA 2580/MUM/2024[2014-15]Status: DisposedITAT Mumbai28 Nov 2024AY 2014-15

Bench: Shri. Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri. Himanshu GandhiFor Respondent: Shri. Suresh Gaikwad – Sr. AR
Section 147Section 148Section 194Section 250Section 43BSection 617

Accounting Standard-9 is not applicable in the case of the assessee as this Accounting Standard assumes that “the three fundamental accounting assumptions i.e., going concern, consistency and accrual have been followed in the preparation and presentation of financial statements.” (Assessment Year

Income Tax Officer-1(1)(3), Mumbai vs. Gas and Power Investment Company Limited, Mumbai

In the result, this appeal filed by the revenue is dismissed

ITA 2577/MUM/2024[2015]Status: DisposedITAT Mumbai28 Nov 2024

Bench: Shri. Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri. Himanshu GandhiFor Respondent: Shri. Suresh Gaikwad – Sr. AR
Section 147Section 148Section 194Section 250Section 43BSection 617

Accounting Standard-9 is not applicable in the case of the assessee as this Accounting Standard assumes that “the three fundamental accounting assumptions i.e., going concern, consistency and accrual have been followed in the preparation and presentation of financial statements.” (Assessment Year

Income Tax Officer-1(1)(3), Mumbai vs. Gas and Power Investment Company Limited, Mumbai

In the result, this appeal filed by the revenue is dismissed

ITA 2575/MUM/2024[2016]Status: DisposedITAT Mumbai28 Nov 2024

Bench: Shri. Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri. Himanshu GandhiFor Respondent: Shri. Suresh Gaikwad – Sr. AR
Section 147Section 148Section 194Section 250Section 43BSection 617

Accounting Standard-9 is not applicable in the case of the assessee as this Accounting Standard assumes that “the three fundamental accounting assumptions i.e., going concern, consistency and accrual have been followed in the preparation and presentation of financial statements.” (Assessment Year

Income Tax Officer-1(1)(3), Mumbai vs. Gas and Power Investment Company Limited, Mumbai

In the result, this appeal filed by the revenue is dismissed

ITA 2572/MUM/2024[2017]Status: DisposedITAT Mumbai28 Nov 2024

Bench: Shri. Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri. Himanshu GandhiFor Respondent: Shri. Suresh Gaikwad – Sr. AR
Section 147Section 148Section 194Section 250Section 43BSection 617

Accounting Standard-9 is not applicable in the case of the assessee as this Accounting Standard assumes that “the three fundamental accounting assumptions i.e., going concern, consistency and accrual have been followed in the preparation and presentation of financial statements.” (Assessment Year

Lanco Solar (Gujarat) Private Limited, Hyderabad vs. ITO., Ward-16(1), Hyderabad

In the result, appeals filed by the assessee are allowed

ITA 906/HYD/2024[2018-19]Status: DisposedITAT Hyderabad27 Nov 2024AY 2018-19

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G. & आ.अपी.सं /Ita Nos. 905 & 906/Hyd/2024 (िनधा"रण वष"/Assessment Years: 2017-18 & 2018-19) Lanco Solar (Gujarat) Vs. Income Tax Officer Private Limited, Hyderabad Ward 16(1) Pan:Aabcl1095J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Rakesh Joshi, Ca राज" व "ारा/Revenue By:: Shri Gudimella V P Pavan Kumar, Dr सुनवाई की तारीख/Date Of Hearing: 13/11/2024 घोषणा की तारीख/Pronouncement: 27/11/2024 आदेश/Order

For Appellant: Shri Rakesh Joshi, CAFor Respondent: : Shri Gudimella V P Pavan
Section 80I

agreement, the nature of the transaction has been specified as slump sale and transfer of business undertaking on a going concern basis and thus, there is no split of any business undertaking in the process of transfer of the business Page ... undertaking under slump sale. The learned AR has contended that it is only a change of ownership of the business undertaking being transferred as going concern and therefore, the undertaking would continue to be eligible for deduction u/s 80IA as it was prior to the said transfer under slump sale

Lanco Solar (Gujarat) Private Limited, Hyderabad vs. ITO., Ward-16(1), Hyderabad

In the result, appeals filed by the assessee are allowed

ITA 905/HYD/2024[2017-18]Status: DisposedITAT Hyderabad27 Nov 2024AY 2017-18

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G. & आ.अपी.सं /Ita Nos. 905 & 906/Hyd/2024 (िनधा"रण वष"/Assessment Years: 2017-18 & 2018-19) Lanco Solar (Gujarat) Vs. Income Tax Officer Private Limited, Hyderabad Ward 16(1) Pan:Aabcl1095J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Rakesh Joshi, Ca राज" व "ारा/Revenue By:: Shri Gudimella V P Pavan Kumar, Dr सुनवाई की तारीख/Date Of Hearing: 13/11/2024 घोषणा की तारीख/Pronouncement: 27/11/2024 आदेश/Order

For Appellant: Shri Rakesh Joshi, CAFor Respondent: : Shri Gudimella V P Pavan
Section 80I

agreement, the nature of the transaction has been specified as slump sale and transfer of business undertaking on a going concern basis and thus, there is no split of any business undertaking in the process of transfer of the business Page ... undertaking under slump sale. The learned AR has contended that it is only a change of ownership of the business undertaking being transferred as going concern and therefore, the undertaking would continue to be eligible for deduction u/s 80IA as it was prior to the said transfer under slump sale