TMI Blog2019 (9) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... t be considered to be prejudicial to the interests of revenue on account of the eligibility of the assessee to claim depreciation on the Good Will amount, we are of the view that the said claim does not arise out of the assessment order and hence the same cannot be considered. - Decided against assessee. - ITA No.935/Bang/2016 - - - Dated:- 27-9-2019 - Shri N.V Vasudevan, Vice Presidnet And Shri B.R Baskaran, Accountant Member Appellant by: Shri Shreehari Kutsa, C.A Respondent by: Ms. Neera Malhotra, CIT (DR) ORDER B.R Baskaran, The assessee has filed this appeal challenging the revision order dated 24.03.2016 passed by Ld Pr. CIT, Mysuru u/s 263 of the Act for assessment year 2011-12. The assessee is aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R submitted that the assessee has only expanded the existing business and no good will was, in fact, acquired. He submitted that the compensation payable to the outgoing distributor was referred under the nomenclature good will and the same is paid in the course of carrying on the existing business of the assessee. Accordingly he submitted that the above said claim is allowable. He further submitted that, if the view of the Ld CIT(A) is upheld for a moment, then the assessee would be entitled to depreciation on the gross amount of Good will of ₹ 14.01 lakhs, in which case, the total income computed by the AO would go down, since the amount of admissible depreciation would be more than the claim of ₹ 1,41,107/-. Accordingly h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed therein, by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, to pass an order upon hearing the assessee and after an enquiry as is necessary, enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment. The key words that are used by section 263 are that the order must be considered by the Commissioner to be erroneous in so far as it is prejudicial to the interests of the Revenue . This provision has been interpreted by the Supreme Court in several judgments to which it is now necessary to turn. In Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, the Supreme Court held that the provision cannot be invoked to correct each and every type of mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and explained in a subsequent judgment of the Supreme Court in CIT v. Max India Ltd. [2007] 295 ITR 282. 6. The Hon ble Supreme Court has held that the existence of twin conditions, viz., the assessment order should be erroneous and it should be prejudicial to the interests of revenue, should be shown in the revision order passed u/s 263 of the Act. The Hon ble Apex Court has further held that non-application of mind on the part of the Income-tax Officer would make the assessment order erroneous. In the instant case, we notice that the assessing officer did not conduct any enquiry at all with regard to the claim of Good Will made by the assessee. The Ld A.R also could not demonstrate that the AO did conduct enquiry and has taken a po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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