M/s. Bharti Teletech Ltd., New Delhi V. ACIT, New Delhi

CO 72/DEL/2014

• Counselvise Citation: [2016] 119 COUNSELVISE.COM (IT) 3194 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-02-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMIT BHALLA
• Assessee Lawyers: S L ANURAGI
• Keywords: Capital asset; Depreciation
• Section: 32; 147; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3873/DEL/2012 AY: 20 04-05 ACIT VS BHARTI TELETECH LTD., CIRCLE 2(1), D-195, ROOM NO. 398D, OKHLA INDUSTRIAL AREA PHASE I, C.R. BUILDING, NEW DELHI. NEW DELHI. (PAN: AABCB3989M) C.O. NO. 72/DEL/2014 (IN ITA NO. 3873/DEL/2012) AY: 20 04-05 BHARTI TELETECH LTD., VS ACIT, CIRCL E 2(1), NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.L. ANURAGI, DR RESPONDENT BY : SHRI AMIT BHALLA, CA DATE OF HEARING: 17.02.2016 DATE OF PRONOUNCEMENT: 17.05.2016 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A. NO. 3873/DEL/2012 HAS BEEN PREFERRED BY THE DEPARTMENT AGAINST THE ORDER DATED 16.05.2012 PASSE D BY THE LD. CIT(A)-V, NEW DELHI FOR ASSESSMENT YEAR 2004-05 WHEREAS C.O. 72/DEL/2014 HAS BEEN PREFERRED BY THE ASSESSEE . 2. THE ASSESSEE COMPANY WAS CARRYING OUT THE BUSINE SS OF MANUFACTURING, DISTRIBUTING AND MARKETING OF TELEPH ONE I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 2 INSTRUMENTS FOR LAND LINE. THE ASSESSING OFFICER CO MPLETED THE ASSESSMENT AT AN INCOME OF RS. 24,47,98,420/- AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCES:- I) DEPRECIATION ON GOODWILL RS. 94,92,188/- II) LONG TERM CAPITAL LOSS RS. 27,28,559/- 3. ON APPEAL, THE LD. FIRST APPELLATE AUTHORITY DEL ETED BOTH THE DISALLOWANCES AND THE DEPARTMENT, IN APPEAL, HAS RA ISED THE FOLLOWING GROUNDS:- 1. LD. CIT(A) HAS ERRED IN ALLOWING ASSESSEES CL AIM OF LONG TERM CAPITAL LOSS OF RS. 27,28,559/-. 2. THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING TH AT WHEN THE NEW PLOT HAS BEEN ALLOTTED AT THE SAME RAT E, TERMS AND CONDITIONS AS THE FIRST ALLOTMENT OF THE PLOT, AS SUCH NO LOSS COULD HAVE ARISEN TO THE ASSESSEE. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING DEPRECIATION ON GOODWILL. 4. IN THE C.O., THE ASSESSEE HAS CHALLENGED THE ASSUMP TION OF JURISDICTION U/S 147 OF THE INCOME TAX ACT, 1961 (H EREINAFTER CALLED THE ACT). 5. AS FAR AS GROUND NOS. 1 & 2 OF THE DEPARTMENTS APPEAL ARE CONCERNED, IT IS SEEN THAT THE ASSESSEE COMPANY WAS ALLOTTED A PLOT (NO. 540) IN SECTOR 37-II, GURGAON BY HUDA ON 20.11.2000 FOR RS. 1,94,35,000/-. SUBSEQUENTLY, ON THE REQUES T OF THE I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 3 ASSESSEE COMPANY, THE ESTATE OFFICER OF HUDA EXCHAN GED THE SAID PLOT WITH PLOT NO. 5, SECTOR 34, GURGAON ON THE SAM E RATES, TERMS AND CONDITIONS AS IN THE ORIGINAL ALLOTMENT. THE C OST OF THE EXCHANGED PLOT WAS DETERMINED AT RS. 1,36,09,553/-. HENCE, A SUM OF RS. 58,25,447/- (I.E. RS. 19435000/- - RS. 1 3609553/-) WAS RECEIVABLE FROM HUDA AS EXCESS AMOUNT OF COST P AID ON ALLOTMENT OF THE ORIGINAL PLOT CONSIDERED AS CAPITA L RECEIPT. THE SAID EXCHANGE OF PLOT WAS TREATED AS TRANSFER I N TERMS OF SECTION 2(47) OF THE ACT BY THE ASSESSEE COMPANY AND A LONG TERM CAPITAL LOSS OF RS. 27,28,559/- WAS CLAIMED BY THE ASSESSEE COMPANY WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON TH E GROUND THAT EXCHANGE OF PLOT DID NOT TANTAMOUNT TO TRANSFER IN TERMS OF SECTION 45 OF THE ACT. 6. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE A SSESSING OFFICER WHEREAS THE LD. DR SUBMITTED THAT THE LD. C IT(A) HAS GIVEN A LEGALLY TENABLE FINDING AND THE SAME OUGHT TO BE UPHELD. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. 8. THE ISSUE INVOLVED AND SUBMISSIONS MADE BY THE A PPELLANT HAVE BEEN CONSIDERED. THE ASSESSING OFFICERS VERS ION IS THAT EXCHANGE OF AN ASSET IS NOT A TRANSFER WHEREAS THE APPELLANT IS OF I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 4 THE VIEW THAT ITS CASE IS COVERED UNDER THE DEFINIT ION OF TRANSFER GIVEN IN SEC.2(47) OF THE I.T. ACT. THE TERM 'TRANS FER' HAS BEEN DEFINED IN SECTION 2(47) OF THE ACT. VIDE CLAUSE (I ) OF THE SAID SECTION 'TRANSFER' IN RELATION TO A CAPITAL ASSET, INCLUDES - (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR (III) .. (IV) 9. A PERUSAL OF THE ABOVE CLAUSES OF SECTION 2(47) CLEARLY SHOWS THAT EXCHANGE OF AN ASSET RESULTS IN TRANSFER OF A CAPITAL ASSET AND ANY GAIN OR LOSS THEREOF IS ASSESSABLE UN DER THE HEAD 'CAPITAL GAINS' U/S 45 OF THE INCOME TAX ACT, 1961. THEREFORE, LOSS ON EXCHANGE OF THE PLOT IS A CAPITAL LOSS IN T ERMS OF SEC.45 OF THE I.T. ACT. THE ASSESSEE IS ALSO ELIGIBLE FOR HAV ING THE BENEFIT OF COST OF INDEXATION FOR WORKING OUT THE CAPITAL LOSS ON THE TRANSFER IN VIEW OF SEC.48. THE CAPITAL LOSS HAS RIGHTLY BEE N WORKED OUT TO RS. 27,28,559/- BY THE ASSESSEE. 10. ACCORDINGLY, WHILE UPHOLDING THE FINDING OF THE LD. CIT(A) ON THIS ISSUE, WE DISMISS GROUNDS NOS. 1 & 2 OF THE DE PARTMENTS APPEAL. I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 5 11. AS FAR AS GROUND NO. 3 OF THE DEPARTMENTS APPE AL REGARDING DEPRECIATION ON GOODWILL IS CONCERNED, IT IS SEEN THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY T HE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS HINDUSTAN COCA COLA BEVERAGES PVT. LTD. 331 ITR 192 (DEL) WHE REIN IN PARAS 21 TO 24, THE HON'BLE DELHI HIGH COURT HAS DISCUSSE D THE ISSUE OF DEPRECIATION ON GOOD WILL AT LENGTH AS UNDER:- 21. IT IS WORTH NOTING, THE SCOPE OF SECTION 32 HAS BEEN WIDENED BY THE FINANCE (NO.2) ACT , 1998 WHEREBY DEPRECIATION IS NOW ALLOWED ON INTANGIBLE ASSETS ACQUIRED ON OR AFTER 1ST APRIL, 1998. AS PER SECTION 32(1)(II) , DEPRECIATION IS ALLOWABLE IN RESPECT OF KNOW- HOW, PATENT, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGH TS OF SIMILAR NATURE BEING INTANGIBLE ASSETS. SCANNING TH E ANATOMY OF THE SECTION, IT CAN SAFELY BE STATED THA T THE PROVISION ALLOWS DEPRECIATION ON BOTH TANGIBLE AND INTANGIBLE ASSETS AND CLAUSE (II), AS HAS BEEN INDI CATED HEREINBEFORE, ENUMERATES THE INTANGIBLE ASSETS ON W HICH DEPRECIATION IS ALLOWABLE. THE ASSETS WHICH ARE INC LUDED IN THE DEFINITION OF INTANGIBLE ASSETS INCLUDES, ALONG WITH OTHER THINGS, ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE. THE TERM SIMILAR HAS BEEN DEALT WITH BY THE APEX COURT IN NAT STEEL EQUIPMENT PVT. LTD. V. COLLECTOR OF CENTRAL EXCISE , AIR 1988 SC 631 WHEREIN THE APEX COURT HAS OPINED THAT THE TERM SIMILAR MEANS CORRESPONDING TO OR RESEMBLING TO IN MANY ASPECTS. IN THIS REGARD, IT WOULD NOT BE OUT O F PLACE TO REFER TO THE DECISION IN COMMISSIONER OF INCOME TAX V. B.C. SRINIVASA SETTY , [1981] 128 ITR 294 (SC) WHEREIN THE CONCEPT OF GOODWILL HAS BEEN UNDERSTOOD IN THE FOLLOWING TERMS: I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 6 'GOODWILL DENOTES THE BENEFIT ARISING FROM CONNECTI ON AND REPUTATION. THE ORIGINAL DEFINITION BY LORD ELD ON IN CRUTTWELL V. LYE 1810 17 VES 335 THAT GOODWILL WAS NOTHING MORE THAN 'THE PROBABILITY THAT THE OLD CUS TOMERS WOULD RESORT TO THE OLD PLACES' WAS EXPANDED BY WOOD V.C . IN CHURTON V. DOUGLAS 1859 JOHN 174 TO ENCOMPASS EVERY POSITIVE ADVANTAGE 'THAT HAS BEEN ACQUIRED BY THE OLD FIRM IN CARRYING ON ITS BUSINESS, WHETHER CONNE CTED WITH THE PREMISES IN WHICH THE BUSINESS WAS PREVIOU SLY CARRIED ON OR WITH THE NAME OF THE OLD FIRM, OR WIT H ANY OTHER MATTER CARRYING WITH IT THE BENEFIT OF THE BU SINESS'. IN TREGO V. HUNT 1896 A.C. 7 (HL) LORD HERSCHELL DESCRIBED GOODWILL AS A CONNECTION WHICH TENDED TO BECOME PERMANENT BECAUSE OF HABIT OR OTHERWISE. THE BENEFIT TO THE BUSINESS VARIES WITH THE NATURE OF T HE BUSINESS AND ALSO FROM ONE BUSINESS TO ANOTHER. NO BUSINESS COMMENCED FOR THE FIRST TIME POSSESSES GOODWILL FROM THE START. IT IS GENERATED AS THE BUS INESS IS CARRIED ON AND MAY BE AUGMENTED WITH THE PASSAGE OF TIME. LAWSON IN HIS INTRODUCTION TO THE LAW OF PROP ERTY DESCRIBES IT AS PROPERTY OF A HIGHLY PECULIAR KIND. IN CIT V. CHUNILAL PRABHUDAS & CO . [1970] 76 ITR 566 THE CALCUTTA HIGH COURT REVIEWED THE DIFFERENT APPROACH ES TO THE CONCEPT (PP.577, 578): 'IT HAS BEEN HORTICULTURALLY AND BOTANICALLY VIEWED AS A SEED SPROUTING OR AN ACORN GROWING INTO THE MIGHTY OAK OF GOODWILL . IT HAS BEEN GEOGRAPHICALLY DESCRIBED BY LOCALITY. IT HAS BEEN HISTORICALLY DESCRIBED BY LOCALITY. IT HAS BEEN HISTORICALLY EXPLAINED AS GROWING AND CRYSTALLIZING TRADITIONS IN THE BUSINESS. IT HAS BE EN DESCRIBED IN TERMS OF A MAGNET AS THE ATTRACTING F ORCE . IN TERMS OF COMPARATIVE DYNAMICS, GOODWILL HAS BEEN DESCRIBED AS THE DIFFERENTIAL RETURN OF PROFIT . PHILOSOPHICALLY IT HAS BEEN HELD TO BE INTANGIBLE. THOUGH IMMATERIAL, IT IS MATERIALLY VALUED. PHYSICALLY AND PSYCHOLOGICALLY, IT IS A HABIT AND SOCIOLOGICALLY IT IS A CUSTOM . BIOLOGICALLY, IT HAS BEEN DESCRIBED BY LORD MACNAGHTEN IN TREGO V. HUNT [1896] AC 7(HL) AS THE SAP AND LIFE OF THE BUSINESS. ARCHITECTURALLY, IT HAS BEEN DESCRIBED AS THE CEMENT BINDING TOGETHER THE I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 7 BUSINESS AND ITS ASSETS AS A WHOLE AND A GOING AND DEVELOPING CONCERN.' A VARIETY OF ELEMENTS GOES INTO ITS MAKING, AND ITS COMPOSITION VARIES IN DIFFERENT TRADES AND IN DIFFE RENT BUSINESSES IN THE SAME TRADE, AND WHILE ONE ELEMENT MAY PREPONDERATE IN ONE BUSINESS, ANOTHER MAY DOMINATE IN ANOTHER BUSINESS. AND YET, BECAUSE OF I TS INTANGIBLE NATURE, IT REMAINS INSUBSTANTIAL IN FORM AND NEBULOUS IN CHARACTER. THOSE FEATURES PROMPTED LORD MACNAGHTEN TO REMARK IN IRC V. MULLER & CO.'S MARGARINE LIMITED [1901] A.C. 217(HL) THAT ALTHOUGH GOODWILL WAS EASY TO DESCRIBE, IT WAS NONETHELESS DIFFICULT TO DEFINE. IN A PROGRESSING BUSINESS GOOD WILL TENDS TO SHOW PROGRESSIVE INCREASE. AND IN A FAILIN G BUSINESS IT MAY BEGIN TO WANE. ITS VALUE MAY FLUCTU ATE FROM ONE MOMENT TO ANOTHER DEPENDING ON CHANGES IN THE REPUTATION OF THE BUSINESS. IT IS AFFECTED BY EVERYTHING RELATING TO THE BUSINESS, THE PERSONALIT Y AND BUSINESS RECTITUDE OF THE OWNERS, THE NATURE AND CHARACTER OF THE BUSINESS, ITS NAME AND REPUTATION, ITS LOCATION, ITS IMPACT ON THE CONTEMPORARY MARKET, TH E PREVAILING SOCIO-ECONOMIC ECOLOGY, INTRODUCTION TO OLD CUSTOMERS AND AGREED ABSENCE OF COMPETITION. THERE CAN BE NO ACCOUNT IN VALUE OF THE FACTORS PRODUCING IT. IT IS ALSO IMPOSSIBLE TO PREDICATE THE MOMENT OF ITS BIRT H. IT COMES SILENTLY INTO THE WORLD, UNHERALDED AND UNPROCLAIMED AND ITS IMPACT MAY NOT BE VISIBLY FELT FOR AN UNDEFINED PERIOD. IMPERCEPTIBLE AT BIRTH IT EXIS TS ENWRAPPED IN A CONCEPT, GROWING OR FLUCTUATING WITH THE NUMEROUS IMPONDERABLES POURING INTO, AND AFFECTING, THE BUSINESS.' 22. REGARD BEING HAD TO THE CONCEPT OF GOODWILL AND THE STATUTORY SCHEME, THE CLAIM OF THE ASSESSEE AND THE DELINEATION THEREON BY THE TRIBUNAL ARE TO BE SCANN ED AND APPRECIATED. THE CLAIM OF THE ASSESSEE-RESPONDE NT, AS IS DISCERNIBLE, IS THAT THE ASSESSING OFFICER HA D TREATED THE TRANSACTIONS KEEPING IN VIEW THE CONCEP T OF BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE AND PUT IT IN THE COMPARTMENT OF INTANGIBLE ASSETS. TO EFFE CTIVELY UNDERSTAND WHAT WOULD CONSTITUTE AN INTANGIBLE ASSE T, CERTAIN ASPECTS, LIKE THE NATURE OF GOODWILL INVOLV ED, HOW I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 8 THE GOODWILL HAS BEEN GENERATED, HOW IT HAS BEEN VALUED, AGREEMENT UNDER WHICH IT HAS BEEN ACQUIRED, WHAT INTANGIBLE ASSET IT REPRESENTS, NAMELY, TRADEM ARK, RIGHT, PATENT, ETC. AND FURTHER WHETHER IT WOULD CO ME WITHIN THE CLAUSE, NAMELY, ANY OTHER BUSINESS OR COMMERCIAL RIGHTS WHICH ARE OF SIMILAR NATURE ARE TO BE BORNE IN MIND. 23. ON A SCRUTINY OF THE ORDER PASSED BY THE TRIBUN AL, IT IS CLEAR AS CRYSTAL THAT THE DEPRECIATION WAS CLAIM ED ON GOODWILL BY THE ASSESSEE ON ACCOUNT OF PAYMENT MADE FOR THE MARKETING AND TRADING REPUTATION, TRADE STY LE AND NAME, MARKETING AND DISTRIBUTION, TERRITORIAL KNOW- HOW, INCLUDING INFORMATION OR CONSUMPTION PATTERNS AND HABITS OF CONSUMERS IN THE TERRITORY AND THE DIFFER ENCE BETWEEN THE CONSIDERATION PAID FOR BUSINESS AND VAL UE OF TANGIBLE ASSETS. THE TRIBUNAL HAS TREATED THE SA ME TO BE VALUABLE COMMERCIAL ASSET SIMILAR TO OTHER INTAN GIBLES MENTIONED IN THE DEFINITION OF THE BLOCK OF ASSETS AND, HENCE, ELIGIBLE TO DEPRECIATION. IT HAS ALSO BEEN N OTED BY THE TRIBUNAL THAT THE SAID FACTS WERE STATED BY THE ASSESSEE IN THE AUDIT REPORT AND THE ASSESSING OFFI CER HAD EXAMINED THE AUDIT REPORT AND ALSO MADE QUERIES AND ACCEPTED THE EXPLANATION PROFERRED BY THE ASSES SEE. THE ACCEPTANCE OF THE CLAIM OF THE ASSESSEE BY THE ASSESSING OFFICER WOULD COME IN THE COMPARTMENT OF TAKING A PLAUSIBLE VIEW INASMUCH AS BASICALLY INTAN GIBLE ASSETS ARE IDENTIFIABLE NON-MONETARY ASSETS THAT CA NNOT BE SEEN OR TOUCHED OR PHYSICAL MEASURES WHICH ARE CREATED THROUGH TIME AND / OR EFFORT AND THAT ARE IDENTIFIABLE AS A SEPARATE ASSET. THEY CAN BE IN TH E FORM OF COPYRIGHTS, PATENTS, TRADEMARKS, GOODWILL, TRADE SECRETS, CUSTOMER LISTS, MARKETING RIGHTS, FRANCHIS ES, ETC. WHICH EITHER ARISE ON ACQUISITION OR ARE INTERNALLY GENERATED. 24. IT IS WORTH NOTING THAT THE MEANING OF BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE HAS TO BE UNDER STOOD IN THE BACKDROP OF SECTION 32(1)(II) OF THE ACT. COMMERCIAL RIGHTS ARE SUCH RIGHTS WHICH ARE OBTAINED FOR EFFEC TIVELY CARRYING ON THE BUSINESS AND COMMERCE, AND COMMERCE , AS IS UNDERSTOOD, IS A WIDER TERM WHICH ENCOMPASSES IN I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 9 ITS FOLD MANY A FACET. STUDIED IN THIS BACKGROUND, ANY RIGHT WHICH IS OBTAINED FOR CARRYING ON THE BUSINES S WITH EFFECTIVENESS IS LIKELY TO FALL OR COME WITHIN THE SWEEP OF MEANING OF INTANGIBLE ASSET. THE DICTIONARY CLAUSE CLEARLY STIPULATES THAT BUSINESS OR COMMERCIAL RIGH TS SHOULD BE OF SIMILAR NATURE AS KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES, ETC. AND ALL THESE ASSETS WHICH ARE NOT MANUFACTURED OR PRODUCED OVERNIGHT BUT ARE BROUGHT INTO EXISTENCE BY EXPERIE NCE AND REPUTATION. THEY GAIN SIGNIFICANCE IN THE COMME RCIAL WORLD AS THEY REPRESENT A PARTICULAR BENEFIT OR ADVANTAGE OR REPUTATION BUILT OVER A CERTAIN SPAN O F TIME AND THE CUSTOMERS ASSOCIATE WITH SUCH ASSETS. GOODW ILL, WHEN APPOSITELY UNDERSTOOD, DOES CONVEY A POSITIVE REPUTATION BUILT BY A PERSON / COMPANY / BUSINESS CONCERN OVER A PERIOD OF TIME. REGARD BEING HAD TO THE WIDER EXPANSION OF THE DEFINITION AFTER THE AMENDME NT OF SECTION 32 BY THE FINANCE ACT (2) 1998 AND THE AUDITOR S REPORT AND THE EXPLANATION OFFERED BEFORE THE ASSES SING OFFICER, WE ARE OF THE CONSIDERED OPINION THAT THE TRIBUNAL IS JUSTIFIED IN HOLDING THAT IF TWO VIEWS WERE POSS IBLE AND WHEN THE ASSESSING OFFICER HAD ACCEPTED ONE VIE W WHICH IS A PLAUSIBLE ONE, IT WAS NOT APPROPRIATE ON THE PART OF THE COMMISSIONER TO EXERCISE HIS POWER UNDE R SECTION 263 SOLELY ON THE GROUND THAT IN THE BOOKS OF ACCOUNTS IT WAS MENTIONED AS GOODWILL AND NOTHING ELSE. AS HAS BEEN HELD BY THE APEX COURT IN MALABAR INDUSTRIAL CO. LTD. (SUPRA), MAX INDIA LTD. (SUPRA) AND COMMISSIONER OF INCOME-TAX V. VIMGI INVESTMENT P. L TD . [2007] 290 ITR 505 (DELHI) ONCE A PLAUSIBLE VIEW IS TAKEN, IT IS NOT OPEN TO THE COMMISSIONER TO EXERCI SE THE POWER UNDER SECTION 263 OF THE ACT. 12. ALTHOUGH THE ABOVE JUDGMENT WAS RENDERED IN THE CONTEXT OF PROCEEDINGS U/S 263 OF THE ACT, THE RATIO AS LAID D OWN BY THE HON'BLE HIGH COURT VIS--VIS THE ISSUE AT HAND I.E. DEPRECIATION ON GOODWILL IS VERY MUCH RELEVANT AND IS TO BE RESPECT FULLY APPLIED. A COORDINATE BENCH OF ITAT, DELHI IN ASSESSEES OWN C ASE FOR I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 10 ASSESSMENT YEAR 2006-07 HAS ALSO RULED IN FAVOUR OF THE ASSESSEE ON THIS ISSUE. 13. ACCORDINGLY, WE HOLD THAT THE LD. CIT(A) HAS RI GHTLY DELETED THE ADDITION/DISALLOWANCE ON ACCOUNT OF DEPRECIATIO N ON GOODWILL AND NO INTERFERENCE IS CALLED FOR. HENCE, GROUND N O. 3 OF THE DEPARTMENTS APPEAL IS ALSO DISMISSED. C.O. 72/DEL/2014 14. AS ALL THE ISSUES IN THE DEPARTMENTS APPEAL HA VE ALREADY BEEN ADJUDGED AGAINST THE DEPARTMENT AND IN FAVOUR OF THE ASSESSEE, THE C.O. BECOMES ACADEMIC IN NATURE AND T HE SAME IS DISMISSED. 15. IN THE RESULT, BOTH THE APPEAL OF THE DEPARTMEN T AS WELL AS C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MAY, 2016. SD/- SD/- (S.V. MEHROTRA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: THE 17TH OF MAY, 2016 GS I.T.A. 3873/D/2012 & C.O. 72/D/2014 ASSESSMENT YEAR 2004-05 11 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 4. DR, ITAT BY ORDER ASSTT. REGISTRAR