BANTEC TPS INDIA P. LTD, NAVI MUMBAI V. ASST CIT CIR 15(1)(2), MUMBAI

ITA 2074/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0083 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Transfer pricing; Opportunity of being heard; International transaction; Additional depreciation; Scheme of amalgamation; Revised return; Set aside
• Section: 143(3); 234B; 13

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K, MUMBAI , ' ,# $ BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI N.K.PRADHAN, ACCOUNTANT MEMBER . 2074 / /201 7 (. . 2012-13 ) ITA NO.2074/MUM/2017 (A.Y.2012-13) M/S.BANC TEC TPS INDIA PVT. LTD. TRIBUNAL-341, TOWER 3, 4 TH FLOOR, INTERNATIONAL INFOTECH PARK, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 PAN: AAACT8971E ...... , / APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE.15(1)(2) MUMBAI ..... '-/ RESPONDENT ,./ APPELLANT BY : SHRI J.D.MISTRY SR. ADVOCATE WIT H MS. URVI MEHTA '-./ RESPONDENT BY : SHRI AKHTAR H. ANSARI /- / DATE OF HEARING : 16/03/2020 012 /- / DATE OF PRONOUNCEMENT : 12/06/2020 / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AS SESSMENT ORDER DATED 31/01/2017 PASSED UNDER SECTION 143(3) R.W.S. 144C( 13) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2012-13. 2 ITA NO.2074/MUM/2017(A.Y.2012-13) 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM R ECORDS ARE THAT THE ASSESSEE COMPANY IS PROVIDING CUSTOMIZED BUSINESS P ROCESS OUTSOURCING SERVICES WHICH INCLUDE VOICE BASED INBOUND PHONE SU PPORT, E-MAIL SUPPORT, ON LINE CHAT AND BACK OFFICE PROCESSING TO TRACMAIL GR OUP OF COMPANIES (ASSOCIATED ENTERPRISES). DURING THE PERIOD RELEVA NT TO ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE ENTERED INTO FOLLOWING INTERNA TIONAL TRANSACTIONS. S.NO. NATURE OF TRANSACTION AMOUNT (RS.) METHOD 1. ACCOUNTS RECEIVABLE MANAGEMENT SERVICES 34,98,59,203.00 TNMM 2. REIMBURSEMENT OF EXPENSES 2,14,05,189.00 CUP 3. ISSUE OF EQUITY SHARES 51,30,00,000.00 CUP TOTAL 88,42,64,392.00 THE MARGIN OF THE ASSESSEE IN TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES (AE) IS STATED TO BE 2.89% AND WITH NON-AES IS 2.99%. TO BENCHMARK INTERNATIONAL TRANSACTIONS WITH AES, THE ASSESSEE FURNISHED LIST OF COMPARABLES. THE TRANSFER PRICING OFFICER (TPO) APPLIED VARIOUS FILTERS AND F INALLY SELECTED FOLLOWING SIX COMPANIES AS COMPARABLES:- S.NO. NAME OF THE COMPANY OPERATING MARGIN 1. ACCENTIA TECHNOLOGIES LIMITED 11.76% 2. ECLERX SERVICES LIMITED 61.21% 3. GENESYS INTERNATIONAL CORPORATION LTD. 30.19% 4. JINDAL INTELLICOM PRIVATE LIMITED 6 .08% 5. INFOSYS BPO LTD. 33.92% 6. EXCEL INFOWAYS LIMITED (SEGMENTAL) 49 .38% AVERAGE 32.09% 3 ITA NO.2074/MUM/2017(A.Y.2012-13) THE ASSESSEE OBJECTED TO INCLUSION OF GENESYS INTER NATIONAL CORPORATION LTD. (IN SHORT GENESYS) AND EXCEL INFOWAYS LIMITED (SE GMENTAL) (IN SHORT EXCEL) IN THE FINAL SET OF COMPARABLES. THE OBJECTION OF THE ASSESSEE AGAINST INCLUSION OF GENESYS IS THAT IT IS NOT FUNCTIONALLY COMPARABL E AS THE COMPANY IS PREDOMINANTLY ENGAGED IN PROVIDING ADVANCE MAPPING, SURVEY, GEOSPATIAL SERVICES AND OFFERS SOLUTIONS REVOLVING STATE OF TH E ART REMOTE SENSING LIDAR, ARIEL SURVEY. THE ASSESSEE FURTHER OBJECTED TO INC LUSION OF GENESYS ON THE GROUND THAT THERE IS NO SEGMENT FOR ITES AND THE SA ID COMPANY IS HAVING HIGH TURNOVER. IN RESPECT OF EXCEL THE ASSESSEE OBJECTE D THAT THE SAID COMPANY DOES NOT MAINTAIN SEPARATE SEGMENT FOR ITES IN THE FINANCIAL YEAR. THE COMPANY IS PRIMARILY ENGAGED IN PROVIDING BPO SERVI CES. THERE IS CONSIDERABLE CHANGE IN THE BUSINESS OF THE ASSESSEE AND THERE IS EXTRA-ORDINARY EVENT IN THE FINANCIAL YEAR 2011-12 I.E. DISINVESTMENT. THE COM PANY HAD SOLD 25,000 SHARES OF EXCEL INFRA N REALITY PVT. LTD. THE OBJECTIONS RAISED BY THE ASSESSEE FOR EXCLUDING ABOVE TWO COMPANIES WERE REJECTED BY THE TPO. 3. THE ASSESSING OFFICER WHILE PASSING DRAFT ASSESS MENT ORDER DATED 31/03/2016, FURTHER DISALLOWED ASSESSEES CLAIM OF DEPRECIATION ON GOODWILL. AGGRIEVED AGAINST THE DRAFT ASSESSMENT ORDER, THE A SSESSEE FILED OBJECTIONS BEFORE THE DISPUTE RESOLUTION PENAL (DRP), INTER-AL IA, ASSAILING INCLUSION OF GENESYS AND EXCEL IN THE FINAL SET OF COMPARABLES A ND DISALLOWANCE OF ASSESSEES CLAIM OF DEPRECIATION ON GOODWILL, AS WE LL AS, DEPRECIATION ON GOODWILL ARISING PURSUANT TO MERGER OF TRACMAIL AR SERVICES PVT. LTD. WITH THE ASSESSEE COMPANY. THE DRP REJECTED THE OBJECTIONS OF THE ASSESSEE QUA, AFOREMENTIONED CLAIMS. THE ASSESSING OFFICER CONSE QUENT TO THE DIRECTIONS OF THE DRP PASSED IMPUGNED ASSESSMENT ORDER MAKING ADD ITIONS IN RESPECT: 4 ITA NO.2074/MUM/2017(A.Y.2012-13) (I) TRANSFER PRICING ADJUSTMENT - RS. 7,34,02,419/- (II) DEPRECIATION ON GOODWILL - RS. 1,69,24,694/- AGGRIEVED AGAINST AFORESAID ADDITIONS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE ASSESSEE HAS RAISED 12 GROUNDS IN THE GROUND S OF APPEAL AND THE SAME ARE SUMMED UP AS UNDER:- - THE GROUND NO.1 TO 8 OF THE APPEAL ARE IN RESPECT O F TP ADJUSTMENT. - THE GROUND NO.9 OF THE APPEAL IS AGAINST DISALLOWAN CE OF DEPRECIATION ON GOODWILL AMOUNTING TO RS.1,69,24,694/-. - THE GROUND NO.10 OF THE APPEAL IS IN RESPECT OF NON -ADMISSION OF THE CLAIM, QUA ADDITIONAL DEPRECIATION ON GOODWILL. - THE GROUND NO.11 OF THE APPEAL IS AGAINST NON-GRANT ING OF SET OFF OF BROUGHT FORWARD LOSSES. - THE GROUND NO.12 OF THE APPEAL IS AGAINST LEVY OF I NTEREST UNDER SECTION 234B OF THE ACT. 5. SHRI J.D.MISTRY, APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT WHILE SELECTING COMPARABLES THE TPO HAS FAILED TO CONSIDE R THE OBJECTIONS FILED BY THE ASSESSEE AGAINST INCLUSION OF GENESYS AND EXCEL IN THE FINAL LIST OF COMPARABLES. THE LD. COUNSEL FOR THE ASSESSEE POIN TED THAT GENESYS IS FUNCTIONALLY NOT COMPARABLE. THE SAID COMPANY WAS I NCLUDED IN THE LIST OF COMPARABLE IN ASSESSMENT YEAR 2008-09. THE MATTER TRAVELLED TO THE TRIBUNAL. THE TRIBUNAL IN APPEAL FILED BY THE ASSESSEE IN ITA NO.7519/MUM/2012 FOR ASSESSMENT YEAR 2008-09 DECIDED ON 05/01/2018 HELD THAT GENESYS IS NOT 5 ITA NO.2074/MUM/2017(A.Y.2012-13) FUNCTIONALLY COMPARABLE WITH THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE FURTHER POINTED THAT IN ASSESSMENT YEAR 2009-10 AND 2010-11 THERE WAS NO DISPUTED WITH REGARD TO THE COMPARABLES AS THE CASE OF THE ASSESSEE WAS NOT REFERRED TO THE TPO. IN ASSESSMENT YEAR 2011-12, THE TPO DID NOT INCLUDE GENESYS IN THE LIST OF COMPARABLES. THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THERE HAS BEEN NO CHANGE EITHER IN THE NATURE OF BUSINESS OF THE ASSESSEE OR THAT OF GENESYS. SINCE THE FACTS IN ASSESSMENT YEAR 2008-09, 2011-12 AND ASSESSMENT YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2 012-13 ARE SAME, GENESYS SHOULD BE EXCLUDED FROM THE LIST OF COMPARABLES ON ACCOUNT OF FUNCTIONAL DISPARITY. IN RESPECT OF EXCEL, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE COMPANY IS LIABLE TO BE EXCLUDED FROM THE LIST OF C OMPARABLES ON THE GROUND THAT THE SAID COMPANY IS HAVING HIGHLY FLUCTUATING MARGINS IN THE FINANCIAL YEAR 2011-12 (RELEVANT TO ASSESSMENT YEAR 2012-13). TO SUPPORT HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS:- (I) EMERSION CLIMATE TECHNOLOGIES VS. DCIT, ITA N O.359/PUN/2016 DECIDED ON 25/04/2018. (II) BAXTER INDIA PVT. LTD VS. ACIT, ITA NO.6158/D EL/2016 DECIDED ON 24/08/2017. THE LD. COUNSEL FOR THE ASSESSEE FURTHER POINTED TH AT THE DRP IN PROCEEDINGS FOR ASSESSMENT YEAR 2013-14 HAD EXCLUDED EXCEL FORM THE FINAL SET OF COMPARABLES. THE LD. COUNSEL FOR THE ASSESSEE CONFI NED HIS SUBMISSIONS IN RESPECT OF TRANSFER PRICING ISSUES, IN ASSAILING IN CLUSION OF GENESYS AND EXCEL IN THE LIST OF COMPARABLES. 6 ITA NO.2074/MUM/2017(A.Y.2012-13) 5.1 IN RESPECT OF GROUND NO.9 AND 10, THE LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE OF ALLOWABILITY OF DEPRECI ATION ON GOODWILL AND ADDITIONAL DEPRECATION ON GOODWILL WAS CONSIDERED B Y THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2692/MUM/2016 FOR ASS ESSMENT YEAR 2011-12 DECIDED ON 12/07/2019. THE TRIBUNAL HELD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEPRECIATION ON GOODWILL. AS REGARDS ADDI TIONAL DEPRECIATION ON GOODWILL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT IN ASSESSMENT YEAR 2011-12 THE ASSESSEE HAD NOT CLAIMED ADDITIONAL DEP RECIATION ON GOODWILL IN THE RETURN OF INCOME. THE CLAIM WAS MADE SUBSEQUEN TLY DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER REJE CTED ASESSEES CLAIM, THE TRIBUNAL ACCEPTED ASSESSEES CLAIM OF ADDITIONAL DE PRECIATION. HOWEVER, THE SAME WAS RESTORED TO ASSESSING OFFICER FOR VERIFICA TION. 5.2 IN RESPECT OF GROUND NO.11 OF THE APPEAL, THE L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED IN NOT ALLOWING SET OFF OF BROUGHT FORWARD BUSINESS LOSSES. THE LD. CO UNSEL FOR THE ASSESSEE PRAYED FOR DIRECTION TO THE ASSESSING OFFICER TO RECONSIDE R THE CLAIM OF THE ASSESSEE. 6. SHRI AKHTAR H. ANSARI, REPRESENTING THE DEPARTME NT VEHEMENTLY DEFENDED THE IMPUGNED ASSESSMENT ORDER AND THE DIRE CTIONS OF DRP. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEES OBJECTION WITH REGARD TO EXCLUSION OF GENESYS AND EXCEL FROM THE L IST OF COMPARABLES WAS DULY CONSIDERED BY THE DRP. SINCE THERE WAS NO MERIT IN THE CONTENTIONS OF THE ASSESSEE, THE SAME WERE REJECTED. THE LD. DEPARTME NTAL REPRESENTATIVE POINTED THAT AS REGARDS FLUCTUATING MARGINS OF EXCE L, THIS PLEA WAS NEVER RAISED 7 ITA NO.2074/MUM/2017(A.Y.2012-13) EITHER BEFORE THE TPO OR BEFORE THE DRP. THE ASSES SEE HAS RAISED A FRESH PLEA FOR EXCLUSION OF EXCEL FROM THE LIST OF COMPARABLES . IN RESPECT OF DEPRECIATION/ADDITIONAL DEPRECIATION ON GOODWILL, THE LD.DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE ISSUE WAS SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL IN PRECEDING A SSESSMENT YEAR I.E. ASSESSMENT YEAR 2011-12. HOWEVER, THE LD. DEPARTME NTAL REPRESENTATIVE POINTED THAT THE ASSESSEE HAD NEVER CLAIMED ADDITIO NAL DEPRECATION IN THE RETURN OF INCOME. THE CLAIM OF DEPRECIATION ON GOO DWILL WAS RAISED FOR FIRST TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. T HE HONBLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LIMITED VS. CIT, 284 ITR 323(SC) HAS HELD THAT THE ASSESSING OFFICER HAS NO POWER TO ACCEPT T HE CLAIM NOT MADE IN THE RETURN OF INCOME. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE GROUNDS NO.1 TO 8 OF THE APPEAL ARE IN RESPECT OF TP ADJUSTMENT. THE LD. COUNSEL FOR THE ASSESSEE WHILE MAKING SUBMISSIONS ON THESE GROUNDS CONFINED HIS SUBMISSIO NS TO ASSAILING THE FINAL LIST OF COMPARABLES. THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED IN INCLUDING GENESYS A ND EXCEL IN THE FINAL LIST OF COMPARABLES. THE LD. COUNSEL POINTED THAT IF BOTH THESE COMPANIES ARE EXCLUDED FROM THE FINAL LIST OF COMPARABLES, THE MA RGINS OF THE COMPARABLES WOULD BE WITHIN +/- 5% RANGE OF THE ASSSESSEES MAR GIN. 8 ITA NO.2074/MUM/2017(A.Y.2012-13) GENESYS INTERNATIONAL CORPORATION LTD. THE ASSESSEE SOUGHT EXCLUSION OF GENESYS ON THE GR OUND OF FUNCTIONAL DISPARITY. IT WAS POINTED THAT IN ASSESSMENT YEAR 2008-09 THE SAID COMPANY WAS EXCLUDED FROM THE LIST OF COMPARABLES BY THE TR IBUNAL IN ASSESSEES OWN CASE FOR THE REASON OF FUNCTIONAL DIFFERENCES. WE FIND THAT IN ITA NO.7519/MUM/2019 (SUPRA) THE ASSESSEE HAS ASSAILED INCLUSION OF FOUR COMPARABLES INCLUDING GENESYS. THE TRIBUNAL AFTER EXAMINING THE FACTS CONCLUDED THAT ALL THE FOUR COMPARABLES ARE NOT IN THE SAME FIELD AND HENCE, DIRECTED TO EXCLUDE THE SAME FROM THE LIST OF COMPA RABLES. FURTHER, WE OBSERVE THAT IN ASSESSMENT YEAR 2011-12 THE TPO WHI LE PASSING ORDER U/S.92CA(3) OF THE ACT DATED 28-1-2015, HAS HIMSELF NOT INCLUDED GENESYS IN THE FINAL LIST OF COMPARABLES. NO MATERIAL HAS BEE N BROUGHT ON RECORD BEFORE US TO SHOW THAT IN THE ASSESSMENT YEAR UNDER APPEAL , BOTH THE ENTITIES HAVE SIMILAR FUNCTIONS. THUS, IN THE LIGHT OF THE DECIS ION OF THE CO-ORDINATE BENCH IN ITA NO.7519/MUM/2019 (SUPRA) AND NO CHANGE IN THE F ACTS IN ASSESSMENT YEAR UNDER APPEAL, WE DIRECT THE TPO/ASSESSING OFFICER T O EXCLUDE GENESYS FROM THE FINAL LIST OF COMPARABLES. EXCEL INFOWAYS LIMITED (SEGMENTAL) THE ASSESSEE IS SEEKING EXCLUSION OF EXCEL FROM TH E FINAL LIST OF COMPARABLES ON THE GROUND THAT THE COMPANY IS HAVIN G FLUCTUATING MARGINS AND HENCE, IS NOT A GOOD COMPARABLE FOR ASSESSMENT YEAR 2012-13. WE FIND THAT PUNE BENCH OF THE TRIBUNAL IN THE CASE OF EMER SION CLIMATE TECHNOLOGIES VS. DCIT (SUPRA) DIRECTED TO EXCLUDE EXCEL FROM THE LIST OF COMPARABLES ON ACCOUNT OF FLUCTUATING MARGINS. THE RELEVANT EXTRA CT OF THE FINDING OF THE TRIBUNAL READ AS UNDER:- 9 ITA NO.2074/MUM/2017(A.Y.2012-13) 16. COMING TO THE FIRST CONCERN EXCEL INFOWAYS LTD ., WHEREIN THE ASSESSEE POINTS OUT THAT THE SAID CONCERN WAS NOT TO BE SELECTED AS COM PARABLE BECAUSE OF ITS FLUCTUATING MARGINS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FILED TABULATED DETAILS IN THIS REGARD, WHEREIN THE MARGINS OF SAID CONCERN BEING DRASTICALLY DROPPED FROM 267.31% IN EARLIER YEARS TO 41.48% DURING THE YEAR UNDER CONSIDERATION. THE YEAR-WISE MARGINS OF SAID CONCERN ARE AS UNDER:- FINANCIAL YEAR OP/TC MARGIN 2008-09 247.74% 2009-10 267.31% 2010-11 238.71% 2011-12 41.48% 17. FURTHER, THE SAID CONCERN HAD CLOSED DOWN ITS I TES AND BPO SEGMENT IN FINANCIAL YEAR 2011-12 ON ACCOUNT OF GLOBAL RECESSION. WE HOLD THAT THE SAID CONCERN WHICH IS IN THE PROCESS OF CLOSING DOWN ITS ITES SEGMENT AND ALSO BECAUSE OF THE FACTUM OF FLUCTUATING MARGINS, COULD NOT BE SELECTED AS FUNCT IONALLY COMPARABLE TO THE ASSESSEE. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF GUJARAT IN PR. CIT VS. ALLSCRIPTS INDIA PV T. LTD. IN INCOME TAX APPEAL NO.258 OF 2016 AND PUNE BENCH OF TRIBUNAL IN TIBCO SOFTWARE I NDIA PVT. LTD. VS. DCIT IN ITA NOS.276/PUN/2015 & CROSS APPEAL IN ITA NO.334/PUN/2 015, RELATING TO ASSESSMENT YEAR 2010-11, ORDER DATED 31.01.2017 AND QLOGIC IND IA PVT. LTD. VS. DCIT IN ITA NO.227/PUN/2014, RELATING TO ASSESSMENT YEAR 2009-1 0, ORDER DATED 21.10.2014. [EMPHASISED BY US] IN THE CASE OF BAXTER INDIA PVT. LTD VS. ACIT (SUPR A), THE TRIBUNAL DIRECTED TO EXCLUDE EXCEL FROM THE LIST OF COMPARABLES INTER-AL IA ON ACCOUNT OF, ABNORMAL VOLATILITY IN REVENUE AND MARGINS. IT IS SETTLED L EGAL POSITION THAT A COMPANY HAVING SUPER NORMAL PROFITS OR HIGHLY UNSTABLE MARG INS SHOULD NOT BE IDLY CONSIDERED AS GOOD COMPARABLE. THUS, IN VIEW OF TH E DECISIONS REFERRED ABOVE, WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE AN D DIRECT THE ASSESSING OFFICER TO EXCLUDE EXCEL FROM THE LIST OF COMPARABL ES. 8. IN VIEW OF OUR ABOVE FINDINGS, GROUND NO.1 TO 8 OF THE APPEAL ARE PARTLY ALLOWED . 10 ITA NO.2074/MUM/2017(A.Y.2012-13) 9. IN GROUND NO.9 OF THE APPEAL, THE ASSESSEE HAS A SSAILED DISALLOWANCE OF DEPRECIATION OF GOODWILL. WE FIND THAT THE ISSUE O F ALLOWABILITY OF DEPRECIATION ON GOODWILL WAS CONSIDERED BY THE TRIBUNAL IN ASSES SMENT YEAR 2011-12 IN ITA NO.2692/MUM/2016 (SUPRA). THE TRIBUNAL WHILE ALLOW ING ASSESSEES CLAIM HELD AS UNDER:- 18. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. INSOFAR AS THE FACTUAL POSITION RELATING TO THE AFO RESAID ISSUE IS CONCERNED, THERE IS NO DISPUTE. EVEN THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEE HAD TRANSFERRED ITS BUSINESS ON SLUMP SALE BASIS TO TRACMAIL AR SERVICE S PVT. LTD. IN ASSESSMENT YEAR 200809 WHICH INCLUDED GOODWILL OF RS. 11,51,01,122 . THE AFORESAID GOODWILL WAS ALSO REFLECTED NOT ONLY IN THE RESPECTIVE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE TRANSFEREE COMPANY BUT ALSO APPEARS IN THE FINANCIA L STATEMENTS. IT IS ALSO A FACT THAT THE SUBSEQUENT AMALGAMATION BETWEEN THE ASSESSEE AN D TRACMAIL AR SERVICES PVT. LTD. WAS BY VIRTUE OF A SCHEME OF AMALGAMATION APPR OVED BY THE HON'BLE JURISDICTIONAL HIGH COURT. THAT BEING THE CASE, IT CANNOT BE SAID THAT THE ASSESSEE HAS ENTERED INTO A CIRCULAR TRANSACTION OR ADOPTED A CO LOURABLE DEVICE FOR CLAIMING DEPRECIATION. MOREOVER, IN THE RETURN OF INCOME FIL ED FOR THE ASSESSMENT YEAR 2009 10, THE ASSESSEE HAD OFFERED CAPITAL GAIN ON THE TR ANSFER OF GOODWILL OF RS. 11,51,01,122. HOWEVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 200809, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CAPITAL GAIN ON GOODWILL HAS TO BE ASSESSED IN ASSESSMENT YEAR 200809. ACCO RDINGLY, HE PROCEEDED TO ASSESS THE AMOUNT OF RS. 11,51,01,122, AS SHORT TERM CAPIT AL GAIN IN ASSESSMENT YEAR 2008 09. THUS, WHEN THE ASSESSEE HAS PAID CAPITAL GAIN T AX AT THE TIME OF TRANSFER OF GOODWILL AND THE DEPARTMENT HAS ACCEPTED IT, IT CAN NOT BE SAID THAT THE ASSESSEE HAS ADOPTED A COLOURABLE DEVICE. MOREOVER, THE SCHEME O F AMALGAMATION BETWEEN THE ASSESSEE AND TRACMAIL AR SERVICES PVT. LTD., HAVING BEEN APPROVED BY THE HON'BLE JURISDICTIONAL HIGH COURT, NO DOUBT CAN BE RAISED W ITH REGARD TO THE TRANSPARENCY OR GENUINENESS OF SUCH TRANSACTION. THUS, WHEN THE ASS ESSEE BY VIRTUE OF SUCH AMALGAMATION HAS RECEIVED BACK THE GOODWILL IN ITS BOOK, DEPRECIATION HAS TO BE ALLOWED ON GOODWILL. AS REGARDS THE DOUBT RAISED BY LEARNED DRP THAT THE ASSESSEE CANNOT CLAIM DEPRECIATION ON THE ENTIRE AMOUNT OF G OODWILL, IT MUST BE OBSERVED THAT THE ASSESSEE HAS CLAIMED GOODWILL ON THE OPENING WD V ONLY AND NOT ON THE ENTIRE AMOUNT. IT IS NOW FAIRLY WELL SETTLED THAT GOODWILL BEING A N INTANGIBLE ASSET, DEPRECIATION HAS TO BE ALLOWED. IN VIEW OF THE AFOR ESAID, WE DIRECT THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEPRECIATION O F RS.2,25,66,258, ON GOODWILL. GROUNDS ARE ALLOWED. THE FACTS IN ASSESSMENT YEAR UNDER APPEAL ARE IDENT ICAL. FOR PARITY OF REASONS MENTIONED ABOVE, THE GROUND NO.9 OF THE APPEAL IS ALLOWED . 11 ITA NO.2074/MUM/2017(A.Y.2012-13) 10. THE GROUND NO.10 OF THE APPEAL IS WITH RESPECT TO ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION ON GOODWILL SUBSEQUENT TO A MALGAMATION. UNDISPUTEDLY, THE ASSESSEE HAD NOT MADE THE CLAIM O F ADDITIONAL DEPRECIATION IN THE RETURN OF INCOME. THE CLAIM WAS MADE FOR TH E FIRST TIME IN THE ASSESSMENT PROCEEDINGS. WE FIND THAT SIMILAR WAS T HE POSITION WITH REGARD TO THE CLAIM OF ADDITIONAL DEPRECIATION IN ASSESSMENT YEAR 2011-12. THE TRIBUNAL AFTER CONSIDERING THE FACTS AND VARIOUS CASE LAWS H ELD AS UNDER:- 24. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. WE HAVE ALSO TAKEN NOTE OF THE DECISIONS CITED BEFORE US. AS DISCUSSED EARLIER, AFORESAID DEDUCTION WAS CLAIMED BY THE ASSESSEE IN COURSE OF ASSESSMENT PROCEEDINGS THROUGH A REVISED STATEMENT OF INCOME. WHILE THE ASSESSING OFFICER HAS NOT EXPRESSED ANY VIEW ON SUCH CLAIM, LEARNED DRP HAS REJECTED IT SOL ELY ON THE GROUND THAT ASSESSEE HAD NOT CLAIMED IT EITHER IN THE RETURN OF INCOME O R BY FILING A REVISED RETURN OF INCOME. IN OUR VIEW, THE AFORESAID REASONING OF LEA RNED DRP IS CONTRARY TO THE SETTLED LEGAL POSITION. IN CASE OF PRUTHVI BROKERS AND SHAR EHOLDERS PVT. LTD. (SUPRA), THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT EVE N IF THE ASSESSEE HAS FAILED TO CLAIM A DEDUCTION EITHER IN THE RETURN OF INCOME OR BY FI LING REVISED RETURN OF INCOME, THE ASSESSEE CAN MAKE SUCH CLAIM SUBSEQUENTLY. EVEN IN CASE OF GOETZ INDIA LTD. (SUPRA), THE HON'BLE SUPREME COURT HAS HELD THAT THERE IS NO RESTRICTION ON THE APPELLATE AUTHORITIES IN ENTERTAINING A FRESH CLAIM OF DEDUCT ION MADE BY THE ASSESSEE. THEREFORE, KEEPING IN VIEW THE RATIO LAID DOWN IN T HE AFORESAID DECISIONS, THE DECISION OF LEARNED DRP IN REJECTING ASSESSEES CLAIM IS UNS USTAINABLE, HENCE, DESERVES TO BE SET ASIDE. HOWEVER, SINCE THE DEPARTMENTAL AUTHORIT IES HAVE NOT EXAMINED ASSESSEES CLAIM, BOTH FACTUALLY AND LEGALLY, WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR EXAMINING ASSESSEES CLAIM ON ITS OWN M ERIT. WHILE DOING SO, THE ASSESSING OFFICER IS ALSO DIRECTED TO TAKE NOTE OF THE FACT W HETHER SUCH CLAIM WAS ALLOWED IN ANY OTHER ASSESSMENT YEAR. HE SHOULD ALSO KEEP IN VIEW THE DECISIONS TO BE CITED BY THE ASSESSEE ON THE ISSUE. NEEDLESS TO MENTION, BEFORE DECIDING THE ISSUE THE ASSESSING OFFICER MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. THUS, IN THE LIGHT OF DECISION OF THE CO-ORDINATE B ENCH IN ASSESSEES OWN CASE ON SAME SET OF FACTS, WE RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTIONS. THE GROUND NO.10 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 12 ITA NO.2074/MUM/2017(A.Y.2012-13) 11. IN GROUND NO.11 OF THE APPEAL THE ASSESSEE HAS ASSAILED NON-GRANTING OF SET OFF OF BROUGHT FORWARD BUSINESS LOSSES. THE LD . COUNSEL FOR THE ASSESSEE HAS PRAYED FOR RESTORATION OF THIS ISSUE WITH A DIR ECTION TO ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM. THE ISSUE IS RESTORED BACK TO ASSESSING OFFICER FOR RECONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS T O SAY, THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF HEARI NG TO THE ASSESSEE IN ACCORDANCE WITH LAW. THE GROUND NO.11 IS ALLOWED FOR STATISTICAL PURPOSE . 12. IN GROUND NO.12, THE ASSESSEE HAS ASSAILED LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. THE CHARGING OF INTEREST UNDER SEC TION 234B IS MANDATORY AND CONSEQUENTIAL. WE FIND NO MERIT IN THIS GROUND OF APPEAL. ACCORDINGLY, THE SAME IS DISMISSED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED IN THE TERMS AFORESAID. ORDER PRONOUNCED ON FRIDAY THE 12 TH DAY OF JUNE, 2020. SD/- SD/- (N.K.PRADHAN) (VIKAS AWASTHY) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI, 4!/ DATED 12 /06/2020 VM , SR. PS(O/S) 13 ITA NO.2074/MUM/2017(A.Y.2012-13) COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT , 2. '- / THE RESPONDENT. 3. 5- ( )/ THE CIT(A)- 4. 5- CIT 5. 67'-! , . . . , / DR, ITAT, MUMBAI 6. 789:; / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI