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2020 (10) TMI 279 - AT - Income TaxFAA admitting fresh claim of the assessee - Depreciation on goodwill - CIT- A directed AO to allow depreciation on the same @12.5% - main contention of the revenue is that Ld. CIT(A) could not admit the claim and further, if the claim was to be admitted, the matter should have been remanded back to the file of Ld. AO for verification of valuation of goodwill and computations thereof - HELD THAT:- Assessee had made this claim during the course of assessment proceedings itself before Ld. AO by way of letter dated 11/09/2012 along with supporting documents but the same were not admitted by Ld. AO since the assessee did not revise its return of income. CIT(A), being an appellate authority, was empowered to do so. Furthermore, this claim of the assessee has been accepted by the Tribunal in AY 2011-12 [2018 (9) TMI 615 - ITAT MUMBAI] which has been followed by Ld. CIT(A). Therefore, this plea of the revenue was to be rejected and we find no infirmity in the action of Ld. CIT(A) in admitting assessee’s claim by relying upon the cited decision of the Tribunal in assessee’s own case for AY 2011-12. Assessee’s new claim arises out of business transfer agreement dated 17/11/2009 and this was the first year of claim which would have consequential impact on subsequent years. AO had no occasion to consider the assessee’s claim since the claim was not admitted and no verification as to quantification / computations / valuation of goodwill has been done at the level of AO. To dispel the concerns raised by revenue and keeping in view the fact that this was first year of claim, while in principal holding that the assessee was entitled to claim the depreciation on goodwill in terms of the decision of Hon’ble Supreme Court in the case of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] as well as in terms of decision of Tribunal for AY 2011-12 in assessee’s own case, the limited matter of verification of valuation of goodwill stand remitted back to the file of Ld. AO. The Ld. AO is directed to allow the depreciation after due verification of quantification of amount of goodwill after appreciating the relevant documents. For the said limited purpose, the matter stand restored back to the file of Ld. AO. Appeal stands partly allowed for statistical purposes
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