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2016 (5) TMI 329 - AT - Income TaxAddition u/s 69C - whether the writing off the goodwill has resulted in the siphoning of funds of the company and covered u/s 69C - Held that:- Our answer to the above question is negative. We are in agreement with the submissions of ld.AR that writing off the goodwill during the year has not resulted in any kind of tax evasion as it is undisputed tact the assessee has purchased the ongoing business for a consideration of ₹ 86.69 crores, and bought asset the worth ₹ 21.12 crores on slump sale and transferring the difference amount to goodwill account There is no colourable transaction and nothing has been brought on record that money has been siphoned to achieve any benefit or to give any benefit to the seller party. Further the payment of the said acquisition was made by cheque through the bank account of the assessee maintained with the CITY Bank, Mumbai . Even otherwise, the goodwill written off has been added back and the adjusted in the profit which was claimed as exempt u/s 10A of the Act, which the assessee was undisputedly entitled to. We are, therefore, of the considered opinion that the finding of the ld.CIT(A) and that of the AO are not correct on facts and are without any basis. Further addition made under the provisions of section 69C of the Act is also not correct as section 69C can only be invoked only when the source of any investment was not explained which is clear from the language used in the section 69C reproduced above. Thus, the order of ld.CIT(A) suffers from serious factual and legal infirmity and cannot be sustained. Accordingly, the AO is directed to delete the addition - Decided in favour of assessee
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