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2023 (3) TMI 658 - ITAT AHMEDABADRevision u/s 263 - depreciation on goodwill - HELD THAT:- Claim of depreciation in the hands of the demerged company was enquired during the course of assessment proceedings - we also observe that during the course of assessment, the assessee had furnished various factual and legal submissions in respect of its claim of depreciation on goodwill vide submission dated 19-12-2017, wherein the assessee relied on the case of Smifs Securities [2012 (8) TMI 713 - SUPREME COURT] in support of its claim for depreciation of goodwill by assessee company. As observe that the extract of board resolution passed by the meeting of board of directors and order passed by the Hon’ble Gujarat High Court granting approval to the aforesaid said of demerger and also the valuation report prepared by the approved valuer dated 04-10-2014 were all submitted before the AO during the course of assessment proceedings, for his consideration. Accordingly, in the light of the above, we are of the considered view that the AO had examined the aspect of assessee’s claim of depreciation during the course of assessment proceedings, factually as well as legally, while allowing the assessee’s claim of depreciation on goodwill. Whether the assessee took a view which is legally plausible/sustainable in law? - High Court of Gujarat in the case of Pr. CIT vs. Zydus Wellness Ltd. [2017 (10) TMI 373 - GUJARAT HIGH COURT] has held that assessee company is entitled to claim depreciation on goodwill expended at the time of amalgamation of companies. In the said order, the Hon’ble Gujarat High Court placed reliance on the decision in the case of CIT vs. Smifs Securities [2012 (8) TMI 713 - SUPREME COURT], while deciding the issue in favour of the assessee. We are of the considered view that the AO has placed reliance on the case of Smifs Securities supra while allowing the claim of depreciation on goodwill for the impugned assessment year and hence the view taken by ld. Assessing Officer can be held to be legally plausible view. Regarding the scope of enquiry u/s 263 of the Act, it may be useful to refer to jurisdictional Gujarat High Court decision in the case of Principal Commissioner of Income Tax-3 v. Minal Nayan Shah [2020 (9) TMI 825 - GUJARAT HIGH COURT]- we are of the view that CIT has erred in facts and in law invoking the provisions of section 263 in the instant set of facts. Accordingly, we direct that the order passed by the Pr. CIT u/s. 263 of the Act may be set aside. Appeal of assessee allowed.
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