Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 89 - AT - Income TaxDisallowance of depreciation on goodwill created in the scheme of amalgamation - entire assets and liabilities of the amalgamating company were transferred to the assessee company at their book value - HELD THAT:- As decided in KIFS International LLP vs. DCIT [2023 (9) TMI 1439 - ITAT AHMEDABAD] no depreciation is allowable on goodwill from the AY 2021-22 onwards. However, goodwill is not excluded from capital assets. The purpose of exclusion of goodwill from the depreciable assets is that it is seen that Goodwill, in general, is not a depreciable asset and in fact depending upon how the business runs; goodwill may see appreciation or in the alternative no depreciation to its value. Therefore, there may not be a justification of depreciation on goodwill. Accordingly, there is no need to provide for depreciation on goodwill of business/profession like other intangible assets or plant & machinery. But such an amendment is not applicable for the year under consideration - thus reverse the order of the authorities below and direct the AO to allow the claim of the assessee for the depreciation on the impugned goodwill - Decided in favour of assessee. Assessment framed by the AO is in the name of non-existent assessee - assessee itself has filed the return of income, appeals in the name of non-existent company - HELD THAT:- Mistake committed by the assessee does not empower the Revenue to also commit the same mistake especially in a situation where the fact about the scheme of amalgamation and conversion of the assessee into LLP was known by the AO which is evident from the assessment order discussed above. The department was aware of the complete fact that the company was no longer in existence, yet the AO has framed the assessment in the name of non-existing company. Therefore, contention of the DR fails on this count that the assessee has also made a mistake in filing the returns of income and appeal papers in the name of non-existing company. We also note that this Tribunal in case of Urmin marketing (P) Ltd. [2020 (11) TMI 47 - ITAT AHMEDABAD] has already decided the identical issue in favor of assessee on the similar facts and circumstances. Assessment framed u/s 143(3) of the Act is not sustainable. Hence the ground of appeal of the assessee is allowed.
|