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M/s. Sartorious Mechatronics India (P) Ltd. Versus The Assistant Commissioner of Income Tax

Depreciation on goodwill - Held that:- The assessee acquired the business of weighing division of Phillips India Ltd. and that a sum of ₹ 64,93,706 was paid as goodwill of the business is not in dispute. The assessee is in the business of sales and servicing of electronic weighing solutions. It is therefore clear that the assessee owned goodwill and had used the goodwill for the purpose of its business. In such circumstances, we are of the view that the assessee would be entitled to deprec .....

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ibunal. The reasons for the delay in filing the appeals have been set out in the application for condonation of delay filed by the assessee. It has been stated in the said application that the common order of CIT(Appeals) was passed on 28.3.2008 and received by the assessee on 3.4.2008. It appears that the then GM(Finance) of the assessee, who is also a Chartered Accountant, advised the assessee that there was no purpose in filing further appeal. The assessee had approached the present counsel ( .....

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good case to go in appeal. Immediately on receipt of such advice, the assessee had filed the present appeals before the Tribunal. 3. The averments stated in the application for condonation of delay have been verified as true by Amit Chatterjee, M.D. of the assessee. The assessee has also filed before us an inter-office memo dated 21.4.08 wherein the relevant notings for not preferring appeals to the Tribunal have been mentioned. The same was filed before us by the ld. counsel for the assessee. 4 .....

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. Govardhan Sao & Ors, AIR 2002 SC 1201. Reliance was also placed on the decision of the ITAT Bangalore Bench in the case of Raghavendra Constructions v. ITO, ITA No.425/Bang/2012, order dated 14.12.2012, wherein the Tribunal condoned the delay of about 678 days in filing the appeal. In doing so, the Tribunal followed the decision of the Hon ble High Court of Karnataka rendered in the case of CIT v. ISRO Satellite Centre, ITA No.532/2008 dated 28.10.2011, wherein the Hon ble High Court condo .....

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ee purchased the business on weighing division of Phillips India Ltd. on 1.7.1998 for a consideration of ₹ 3.7 crores. A sum of ₹ 64,93,760 was attributable to the value of goodwill in the consideration so paid. The assessee claimed that goodwill was an item of asset on which depreciation u/s. 32(1) of the Act had to be allowed. The revenue authorities rejected the claim of the assessee on the ground that goodwill was neither an item of asset within the definition of term block of as .....

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that the assessee was entitled to benefit of depreciation beyond doubt. According to him, as per the decision of Hon ble High Court of Karnataka rendered in ISRO Satellite Centre (supra), the delay in filing the appeals ought to be condoned, as the claim of assessee for depreciation could not be denied on the ground on which the revenue authorities had denied the claim of assessee. It was therefore submitted by the ld. counsel for the assessee that the delay in filing the appeal should be condon .....

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t of conditions that the assessee is owner of the asset on which depreciation is claimed and that the assessee has been used for the purpose of business of the assessee. According to him, in the present case, the AO as well as the CIT(Appeals) proceeded on the basis that goodwill was not an item of asset, on which depreciation can be allowed u/s. 32 of the Act and therefore, had no occasion to go into the question whether the assessee owned the goodwill and had used the goodwill for the purpose .....

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advice of GM(Finance) not to file the appeal against the impugned order of CIT(Appeals) has been recorded. The law with regard to allowing depreciation on goodwill crystallised with the decision of Hon ble Supreme Court in the case of Smifs Securities Ltd. (supra) rendered on 22.8.2012. The appeal before the Tribunal had been filed by the assessee on 18.6.2013. It is therefore probable that the claim of assessee that appeal was not filed due to an earlier advice and later on filed because of th .....

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at in Raghavendra Constructions (supra), this Tribunal on identical issue held that subsequent professional advice and delay on account of earlier improper professional advice was sufficient cause to condone the delay in filing he appeal. Following were the relevant observations of the Tribunal:- 13. We have considered the rival submissions. At the outset, we observe that the Hon ble Supreme Court, in the case of Mst. Katiji (supra), has explained the principles that need to be kept in mind whil .....

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L/R of R.K. Hegde v. ACIT, ITA No.2785/Bang/2004 for the A.Y. 1993-94, the Hon ble Tribunal condoned the delay of about 1331 days in filing the appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre, ITA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from i .....

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was rendered on 28.2.2012. The appeal has been filed by the Assessee before the Tribunal on 26.3.2012. Hence, we find that there has been no willful neglect on the part of the Assessee. In such matters the advice of the professional would be the point of time at which the Assessee would begin to explore the option of exhausting all legal remedies. We are also of the view that by condonation of delay there is no loss to the revenue as legitimate taxes payable in accordance with law alone would b .....

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