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2021 (4) TMI 759 - AT - Income TaxDisallowance of depreciation on goodwill - whether goodwill acquired by the assessee enhances the value of entire FedEx brand? - CIT vacated the disallowance on deprecation of goodwill so made by the A.O - A.O relying on the order passed by the Pr. CIT under Sec. 263 for A.Y. 2011-12 wherein the latter had observed that if some goodwill had been acquired by the assessee then, partially such goodwill was for the business of the international affiliates of the assessee company and only a reasonable part of the same would be relatable to the assessee company, had thus, adopting the same line of action attributed 25 % of the value of goodwill to the assessee and disallowed the balance 75% of its value - HELD THAT:- Admittedly, the order passed by the Pr. CIT under Sec. 263, for A.Y. 2011-12had been quashed by the Tribunal [2017 (11) TMI 1215 - ITAT MUMBAI] As observed by us hereinabove, the Tribunal while quashing the order passed by the Pr.CIT under Sec. 263 had categorically observed that as the agreement for acquiring the business of AFL and UFL was between the assessee and AFL/UFL and none of the affiliates of the FedEx Group were a party to the same thus, it cannot be said that the affiliates had acquired the goodwill along with the assessee. Thus the controversy in hand had its genesis in A.Y. 2011-12, we find, that the CIT(A) had rightly, observed that now when the order of the Pr.CIT under Sec. 263, dated 21.02.2016 had been quashed by the Tribunal, therefore, the disallowance of depreciation on goodwill made by the A.O by relying on the order passed by his predecessor under Sec. 143(3) r.w.s 263, dated 30.12.2016, cannot survive on a standalone basis and was liable to be vacated. Accordingly, finding no infirmity in the view taken by the CIT(A), we herein uphold his order. - Decided against revenue.
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