TMI Blog2016 (7) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 2010 With TAX APPEAL NO. 470 of 2012 With TAX APPEAL NO. 182 of 2014 - - - Dated:- 21-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANIM JJ. FOR THE APPELLANT : MR RK PATEL, ADVOCATE, with MR. B.D. KARIA, ADVOCATE with MR. DARSHAN R. PATEL FOR THE OPPONENT : MR.VARUN K.PATEL, STANDING COUNSEL, MR. S.N. DIVATIA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) All these appeals are preferred against the order of the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal ). Tax Appeal Nos. 47 of 2009 to 51 of 2009, 1975 of 2009 and 346 of 2010 are preferred by the assessee against the order of the Tribunal whereas Tax Appeal Nos. 470 of 2012 and 182 of 2014 have been filed by the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation allowance on goodwill. The Assessing Officer while framing the assessment, relying on the decision of the Tribunal in the case of Bharatbhai J. Vyas vs. ITO (97 ITD 248), disallowed the claim of depreciation of the assessee. Against the disallowance of the claim of the assessee, the assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals) who allowed the appeal by holding that the assessee is entitled to depreciation on intangible assets. Against the order of the Commissioner of Income-tax (Appeals), the revenue preferred appeal before the Tribunal. The assessee also filed Cross-Objection in the Tribunal. The Tribunal, after hearing the parties, following its own decision in the case of Bharatbhai J. Vya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Act, 1961, on the goodwill acquired by the assessee? (2) Whether, in the facts and under the circumstances of the case, goodwill is an intangible asset within the meaning of section 32(1)(ii) of the Income-tax Act, 1961 so to be eligible for depreciation? 7. The learned counsel for the assessee has contended that, in the said appeal, this court had considered the decision of the Apex Court in the case of Commissioner of Income-tax, Kolkata v. Smifs Securities Ltd., reported in (2012) 348 ITR 302. The relevant observations in paragraph Nos. 6 and 8 of the said judgement are as under: 6. One more aspect needs to be highlighted. In the present case, the Assessing Officer, as a matter of fact, came to the conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee was incurred in the normal course of business and, therefore, the assessee was entitled to deduction under Section 36(1)(vii) of the Act. It is well settled now by a catena of decisions that the manner in which the assessee maintains its account is not conclusive for deciding the nature of expenditure. 7.1 Relying on the decision of the Supreme Court in the case of Commissioner of Income-tax, Kolkata v. Smifs Securities Ltd. (supra), the issue was answered in favour of the assessee and against the revenue by this court. 8. The learned counsel for the appellant-assessee, therefore, contended that the decision of the authorities below is required to be reversed by allowing the appeals in light of the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transferor company to a separate account to be named and styled as Amalgamation Reserve Account . The said account shall be considered as a free reserve and shall form part of the net worth of the transferee company. He has further contended that this amalgamated account is not permissible. He has taken us through the accounting for amalgamations at page No. 147, particularly, sub-paragraphs (e) and (f) which are extracted below: (e) Amalgamation in the nature of merger is an amalgamation which satisfies all the following conditions: (i) All the assets and liabilities of the transferor company become, after amalgamation, the assets and liabilities of the transferee company. (ii) Shareholders holding not less than 90% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso of the shareholders interests and of the business of these companies. Such amalgamations are amalgamations which are in the nature of `merger and the accounting treatment of such amalgamations should ensure that the resultant figures of assets, liabilities, capital and reserves more or less represent the sum of the relevant figures of the amalgamating companies. In the second category are those amalgamations which are in effect a mode by which one company acquires another company and, as a consequence, the shareholders of the company which is acquired normally do not continue to have a proportionate share in the equity of the combined company or the business of the company which is acquired is not intended to be continued. Such amalga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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