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2023 (9) TMI 846 - HC - Income TaxRevision u/s 263 - goodwill created by virtue of demerger scheme - CIT observed that 6th Proviso to section 32(1) of the Act makes it clear that the depreciation in the hands of the resulting company is to be calculated at the prescribed rates on the WDV of the assets in the books of the demerged company, which in this case would be “Nil” as the WDV of the corresponding assets itself is “Nil"- AO wrongly accepted the claim of depreciation on goodwill created by virtue of demerger scheme without examining the provisions of explanation 2 to section 43(6) r.w.s. 32 due to which the assessment order passed u/s. 143(3) of the Act has become erroneous and prejudicial to the interest of the Revenue HELD THAT:- Tribunal found that the assessee had furnished various factual and legal submissions dated 19.12.2017 where the assessee relied upon the case of Commissioner of Income Tax, Kolkata vs. Smifs Securities Ltd [2012 (8) TMI 713 - SUPREME COURT] - As observed by the Tribunal that the Assessing Officer had considered the action of granting approval and also the Valuation Report. Since therefore the Assessing Officer had examined the aspect of the assessee’s claim during the course of acceptance, in the opinion of the Tribunal, the Assessing Officer while passing order u/s 143(3) had taken a plausible view sustainable in the eye of law. Relying on the decision, it was held that the assessee company is entitled to claim depreciation on goodwill expended at the time of amalgamation of companies. AO had also relied on the case of Smifs Securities Ltd. (supra) and allowed the claim for depreciation - no substantial question of law arises for consideration.
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