9911796707
TMI Blog2022 (11) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and on facts in confirming disallowance u/s. 32(1) of Rs. 68,75,000/- towards depreciation on intangible assets without considering the explanation and evidences produced and thereby violating the principles of natural justice. 2.1 The Ld. CIT(A) has grievously erred in law and on facts in not appreciating valuation of goodwill based on subscriber's valuation. 2.2 The Ld. CIT(A) has grievously erred in law and on facts in not appreciating the recognition of Goodwill and thereby disallowing the claim of depreciation u/s. 32(1) of Rs. 68,75,000/-. 2.3 That in the facts and circumstances of the case the Ld. CIT(A) ought to have appreciated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the extended to claim of depreciation on goodwill as whatever intangible assets or other assets having zero value was acquired after formation of partnership deed only and it cannot be retrospectively, therefore, if appellate authority decides that assessee is eligible for claim of depreciation, still since it was acquired after 30.09.2015, therefore, assessee is eligible to claim depreciation @ 12.5% only being used less than 182 days." 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that till the merger, proprietary concern was separate and independent entity and the assets lying in the books were exclusively of propr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 348 ITR 302. As regards the issue of valuation, the Ld. AR submitted that the Assessing Officer should have appreciated that as part of market practice, there is no standard rate nor standard method prescribed for acquisition of such businesses. The valuation of assets is altogether different issue and no such standard valuation method is prescribed. The acquisition price is determined through negotiation and any amount which is paid over and above the book value of assets and liabilities is recognized as Goodwill in the books of acquiring company. It works principally on one to one basis wherein factors such as synergy, weave length, future proximities, area, industry, no of years etc. are facts are considered in determining the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The Ld. DR submitted that in view of intangible asset being at zero in Crazy Network, this is a sham transaction from one entity to another within the group and is devoid of merits. In fact, the so called goodwill acquired by the assessee has no base, therefore, in view of provision of Section 43(6) of the Act, value of so called assets is zero in case of partnership firm. Here there are no assets acquired by the assessee, therefore, the Assessing Officer has rightly made this addition. 7. Heard both the parties and perused all the relevant material available on record. From the perusal of the Partnership Deed dated 10.10.2015 which is effective from 01.04.2015 clause 9 and 37 of the said Partnership Deed states as follows: "9. Bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subscription fee in entirety as goodwill which is an intangible asset being service provided to its 5000 subscribers. Thus, the assessee has demonstrated that as part of market practice, there is no standard rate or standard method prescribed for acquisition of such businesses. The valuation of assets is altogether different issue and no such standard valuation method is prescribed. The acquisition price is determined through negotiation and any amount which is paid over and above the book value of assets and liabilities is recognized as Goodwill in the books of acquiring company. It works principally on one to one basis wherein factors such as synergy, weave length, future proximities, area, industry, number of years etc. are facts are con ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
