The DCIT, Circle-1, Ahmedabad V. Bhagwati Banquets & Hotels Ltd., Ahmedabad

ITA 2123/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89255 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: S N DIVATIA
• Keywords: Depreciation; Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2123/AHD/2011 ( / ASSESSMENT YEAR : 2008-09) THE DCIT AHMEDABAD CIRCLE-1 AHMEDABAD / VS. M/S.BHAGWATI BANQUETS & HOTELS LTD. 73, WHITE HOUSE PANCHWATI ELLISBRIDGE,AHMEDABAD ./ ./ PAN/GIR NO. : AABCB 6825 A ( # / APPELLANT ) .. ( $% # / RESPONDENT ) #& / APPELLANT BY : SHRI M.K.SINGH, SR.DR $% #'& / RESPONDENT BY : SHRI S.N. DIVATIA, AR ()'* / DATE OF HEARING 24/03/2015 +,-.'* / DATE OF PRONOUNCEMENT 10/04/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VI, AHMEDABA D (CIT(A) IN SHORT) DATED 24/06/2011 PERTAINING TO ASSESSMENT Y EAR (AY) 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- ITA NO. 2123/AH D/2011 DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. ASST.YEAR 2008-09 - 2 - 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.1,09,88,126/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON GOODWILL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER TO THE EXTENT MENTIONED ABOVE, SINCE THE ASSESSEE HAS FAILED TO D ISCLOSE HIS TRUE INCOME. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. THE APPE LLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 21/12/2010. WHILE FRAMING THE ASSESSMENT, TH E AO MADE VARIOUS DISALLOWANCES INCLUDING DISALLOWANCE OF DEPRECIATIO N ON GOODWILL AMOUNTING TO RS.1,09,88,126/-. AGGRIEVED BY THE AS SESSEE, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL BY OBSERVING THAT FOR THE AY 2007- 08 HAS BEEN DECIDED BY ORDER DATED 18/03/2011 IN WH ICH ASSESSEES CLAIM OF DEPRECIATION IS ALLOWED. NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND S UBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIO N OF RS.1,09,88,126/-. ITA NO. 2123/AH D/2011 DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. ASST.YEAR 2008-09 - 3 - 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE ISSUE IS SQUAR ELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE B ENCH (ITAT C BENCH AHMEDABAD) IN ITA NO.1312/AHD./2011 FOR AY 2007-08 VIDE ORDER DATED 28/02/2012 AND ALSO THE DECISION OF COORDINAT E BENCH (ITAT C BENCH AHMEDABAD) IN ITA NO.1549/AHD/2012 FOR AY 200 9-10 VIDE ORDER DATED 02/11/2012. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE HONBLE COORDINATE BENCH IN ITA NO .1312/AHD./2011 FOR AY 2007-08(SUPRA) HAS RECORDED THE GROUND RAISE D IN APPEAL IN PARA-2 OF ITS ORDER WHICH READS AS UNDER:- 2. THE REVENUE HAS RAISED A SOLITARY GROUND TO TH E EFFECT THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.1, 46,50,834/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON GOODWILL. 4.1. THE HONBLE COORDINATE BENCH AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES HAS DECIDED THIS ISSUE IN PARA-5.9 B Y HOLDING AS UNDER: 5.9. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE ISSUE AS DELIBERATED UPON IN THE FOREGOING PARAGRAPHS AND AL SO IN CONFORMITY WITH THE RULING OF VARIOUS JUDICIARIES, CHIEFLY, THE RULING OF THE HONBLE HIGH COURT OF KERALA REFERRED SUPRA, WE ARE OF THE CONSIDERED VIEW THAT THE CIT(A) WAS JUSTIFIED IN HO LDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEPRECIATION ON INTANGIBL E ASSETS ACQUIRED BY IT. IT IS ORDERED ACCORDINGLY. WE MAK E IT VERY CLEAR THAT WE HAVE ARRIVED AT THIS ABOVE CONCLUSION FROM THE FACTS OF THIS ITA NO. 2123/AH D/2011 DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. ASST.YEAR 2008-09 - 4 - CASE AS THE VALUATION REPORT SUBMITTED BY THE APPEL LANT HAS NOT BEEN SUCCESSFULLY CHALLENGED BY THE REVENUE TO ESTA BLISH THE TRANSACTION TO BE SHAM. THEREFORE, WE CONSIDER THE PAYMENT MADE ON ACCOUNT OF GOODWILL IS GENUINE AND REASONABLE SI NCE IT IS ARRIVED BASED ON A REASONABLE VALUATION AND COMPUTA TION. 4.2 THE DECISION OF THE COORDINATE BENCH HAS BEEN F OLLOWED BY ANOTHER COORDINATE BENCH IN ASSESSEES OWN CASE FOR AY 2008-09, I.E. IN ITA NO.1549/AHD/2012, ORDER DATED 02/11/2012. IN T HE PRESENT YEAR ALSO, THE ONLY GROUND RAISED BY THE REVENUE IS AGAI NST THE DELETION OF ADDITION OF RS.1,09,88,126/- MADE ON ACCOUNT OF DIS ALLOWANCE OF DEPRECIATION ON GOODWILL. SINCE THE FACTS AND CIRC UMSTANCES ARE IDENTICAL TO THE FACTS OF THE CASE IN AY 2007-08 AND AY 2009- 10 (IN ITA NO.1312/AHD/2011 AND ITA NO.1549/AHD/2012 RESPECTIV ELY), THEREFORE WE SEE NO REASON TO TAKE A DIFFERENT VIEW THAN TAKE N BY THE COORDINATE BENCH IN EARLIER YEARS, THIS GROUND OF REVENUES AP PEAL IS REJECTED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH DAY OF APRIL, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 10/ 04 /2015 2*..,(.../ T.C. NAIR, SR. PS ITA NO. 2123/AH D/2011 DCIT VS. M/S. BHAGWATI BANQUETS & HOTELS LTD. ASST.YEAR 2008-09 - 5 - !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-VI, AHMEDABAD 5. 7(8$45 , *45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<) / GUARD FILE. ! / BY ORDER, %7$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 24.3.15 (DICTATION-PAD 5- P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..27.3.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.10.4.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.4.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER