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2023 (7) TMI 491 - AT - Income TaxRevision u/s 263 - As per CIT assessee had made incorrect claim of depreciation on Goodwill arising on amalgamation and incorrect claim of premium on redemption of debentures - HELD THAT:- We find that the expression “Goodwill” arising on amalgamation has been duly mentioned in the scheme of arrangement itself which has been approved by the Hon’ble Bombay High Court. It is grossly incorrect on the part of the ld. PCIT to state that Goodwill was not mentioned in the scheme of arrangement. All these details were indeed filed before the ld. AO by the assessee and the ld. AO having taken due cognizance of the same and the accounting entries passed by the assessee company pursuant to the order of the Hon’ble Bombay High Court approving the merger, had accepted the claim of depreciation on Goodwill of the assessee. Hence, it cannot be said that relevant enquiries were not carried out by the ld. AO with regard to this issue on depreciation of Goodwill. Goodwill in the instant case had arose on account of excess of takeover of liabilities over assets from the amalgamating company and it is part of consideration paid. Hence, the assessee would be entitled for claiming depreciation on Goodwill in view of the decision in the case of CIT vs. Smifs Securities Ltd., reported in[2012 (8) TMI 713 - SUPREME COURT] Hence, even on merits, assessee is entitled for depreciation on Goodwill. AO after taking due cognizance of all these documents and case laws had indeed taken a possible view in the matter, which in our considered opinion, is also the correct view in the eyes of law. Hence, the ld. PCIT could not invoke his revision jurisdiction to substitute his erroneous view on the matter in the place of view already taken by the ld. AO. Allowability of deduction of premium on redemption of debentures - It is pertinent to note that the claim of the assessee on accrual basis with regard to the premium on redemption of debentures equally over the period of debentures is strictly in accordance with the ratio laid down in the case of Madras Industrial Investment Corporation Ltd [1997 (4) TMI 5 - SUPREME COURT] Hence, it cannot be said that there was an inadvertent claim made by the assessee in A.Y.2013-14 on accrual basis. When the action of the assessee is in accordance with the decision of the Hon’ble Supreme Court, the ld. AO accepting the said claim of the assessee by duly following the decision of the Hon’ble Supreme Court , cannot be termed as erroneous order and it cannot be stated that the ld. AO had passed an order without application of mind warranting revision u/s. 263 of the Act by the ld. PCIT. In fact, the ld. AO had taken a correct view by allowing claim of the assessee on accrual basis in the A.Y.2013-14 as the said claim is in consonance with the decision of the Hon’ble Supreme Court [Supra] PCIT was unjustified in invoking the revision jurisdiction u/s. 263 of the Act in respect of this issue of allowability of premium payable on redemption of debentures. Assessee appeal allowed.
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