Bodal Chemicals Ltd., Ahmedabad V. The DCIT, Circle-1, Ahmedabad

ITA 2249/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6378 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K PATEL A R SHRI S K DEV
• Keywords: Capital asset; Depreciation; Principle of natural justice; Rule of consistency; Scheme of amalgamation; Unabsorbed depreciation; Set aside; Capital Gains
• Section: 271(1)(c); 143(3); 153A; 14A; 250; 32; 147; 263; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER SR. NOS. ITA NO(S) ASSTT. YEAR(S) APPEAL(S) BY APPELLANT RESPONDENT 1. ITA NO.1439/AHD/2011 2007-08 BODAL CHEMICALS LTD., PLOT NO. 123/124, PHASE I, GIDC, VATVA, AHMEDABAD. THE ADDL. CIT, RANGE 1, AHMEDABAD. 2. ITA NO.42/AHD/2012 2008-09 --DO-- --DO-- ASSESSEE BY : SHRI M. K. PATEL, A.R. REVENUE BY : SHRI S. K. DEV , SR. D.R. SR. NOS. ITA AND IT(SS) NO(S) ASSTT. YEAR(S) APPEAL(S) BY APPELLANT RESPONDENT 1. ITA NO.597/AHD/2014 2007-08 THE ADDL. CIT, RANGE 1, AHMEDABAD. BODAL CHEMICALS LTD., 2. ITA NO.2249/AHD/2018 2009-10 BODAL CHEMICALS LTD., THE ADDL. CIT, AHMEDABAD. 3. IT(SS)A NO.357/AHD/18 2009-10 THE ADDL. CIT, AHMEDABAD. BODAL CHEMICALS LTD., ASSESSEE BY : MS. RITA DOKANIA, CIT-D.R. & SHRI S. K. DEV, SR. D.R. REVENUE BY : SHRI S. N. DIVATIA, A.R. DATE OF HEARING 23.07.2019 DATE OF PRONOUNCEMENT 16 . 10 . 2019 ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 2 - O R D E R PER BENCH ACCOUNTANT MEMBER : THESE FIVE APPEALS (FILED BY THE ASSESSEE AND THE REVENUE) ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 28.02.2011, 08.11 .2011, 02.12.2013 & 04.09.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, 6, & 11 AHMEDABAD FOR THE ASSESSMENT YEARS (A.YS.) 2007-08, 2008-09 & 2009-10. SINCE ALL THE APPEALS RELATE TO THE SAME ASSESSEE, HENCE THE SAME ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OF BY A CO MMON ORDER. 2. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO.143 9/AHD/2011 FOR ASST. YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (1) THAT ON FACTS AND IN LAW THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) HAS GRIEVOUSLY ERRED IN CONFIRMING THE DI SALLOWANCE OF DEPRECIATION ON GOODWILL OF RS.1,90,09,241/-. (2) THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HA S GRIEVOUSLY ERRED IN HOLDING THAT THE ASSESSEE HAS NOT ACQUIRED ANY INTA NGIBLE ASSETS AND THEREBY CONFIRMING THE DISALLOWANCE BY APPLYING INA PPLICABLE PROVISIONS OF THE I.T. ACT, 1961. (3) THAT THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN NOT DECIDING THE GROUND REGARDING ALTERNATE VALUATION OF GOODWILL DO NE BY A.O. (4) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. 3. THE 1 ST ISSUE RAISED BY THE ASSESSEE IN GROUND NO. 1 AND 2 IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF 1,90,09,241/- ON THE INTANGIBLE ASSETS/GOODWILL ACQ UIRED IN THE SCHEME OF AMALGAMATION. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 3 - 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY NAMELY DINTEX DYE CHEM LTD. (AMALGAMATED CO.) HAS ACQUIRED A COMPANY NAMELY BODAL CHEMICAL PVT. LTD. (AMALGAMATING CO.) IN A SCHEME OF AMALGAM ATION APPROVED BY THE HONBLE GUJARAT HIGH COURT VIDE ORDER DATED 27 APRI L 2006. SUBSEQUENTLY, THE NAME OF THE ASSESSEE COMPANY WAS CHANGED TO BODAL C HEMICAL LTD. AS PER THE AMALGAMATION SCHEME, ALL THE ASSETS AND LIABILITIES OF THE AMALGAMATING COMPANY WERE TRANSFERRED W.E.F. 01.04. 2004 TO THE ASSESSEE. BUT THE EFFECT IN THE BOOKS OF THE ASSESSEE WAS GIVEN I N THE FINANCIAL YEAR 2005-06 CORRESPONDING TO THE A.Y. 2006-07. THUS, THE YEAR U NDER CONSIDERATION IS THE 2 ND YEAR AFTER RECORDING THE TRANSACTION OF ALL THE AS SETS AND LIABILITIES ACQUIRED IN THE SCHEME OF AMALGAMATION. THE ASSESSEE ACQUIRE D ALL THE ASSETS AND LIABILITIES/ GENERAL RESERVE/ INVESTMENT ALLOWANCE RESERVE/ BALANCE OF PROFIT AND LOSS ACCOUNT AT THE BOOK VALUE AS SHOWN BY THE AMAL GAMATING COMPANY IN ITS BOOKS OF ACCOUNTS. HOWEVER, THE ASSESSEE PAID MORE CONSIDERATION AGAINST THE NET ASSETS ACQUIRED BY IT FROM AMALGAMATING COMPANY BY WAY OF ISSUING SHARES. AS SUCH, THE EXCESS CONSIDERATION PAID BY T HE ASSESSEE AMOUNTED TO 10,13,82,620/-, WHICH WAS TREATED BY IT IN ITS BOOK S OF ACCOUNTS AS GOODWILL. THE ASSESSEE ACCORDINGLY CLAIMED DEPRECIATION ON SU CH GOODWILL @ 25% AT ITS WRITTEN DOWN VALUE AMOUNTING TO 1,90,09,241/- (25% OF 7,60,36,965.00). THE ASSESSEE STATED THAT IT HAS ACQUIRED ALL THE AS SETS/ LIABILITIES OF THE AMALGAMATING/ TRANSFEROR COMPANY INCLUDING THE INTA NGIBLE ASSETS SUCH AS LICENSES, TRADEMARK AND OTHER COMMERCIAL RIGHTS OF THE SIMILAR NATURE. ACCORDINGLY, THE ASSESSEE CONTENDED THAT IT IS ELIG IBLE FOR THE DEPRECIATION U/S 32 OF THE ACT. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 4 - HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS O BSERVED THAT THERE WAS NO INTANGIBLE ASSET SHOWN BY THE AMALGAMA TING/ TRANSFEROR COMPANY IN ITS BALANCE SHEET BEFORE THE DATE OF THE AMALGAM ATION. MOREOVER, THE INTANGIBLE ASSETS ACQUIRED BY THE ASSESSEE FROM THE TRANSFEROR COMPANY WERE REPRESENTING THE SELF GENERATED ASSETS. THEREFORE, THE VALUE OF THE INTANGIBLE ASSET IS ZERO AS PER EXPLANATION 7 TO SECTION 43(1) OF THE ACT. SIMILARLY, THERE WAS NO BLOCK OF ASSETS FOR THE IMP UGNED INTANGIBLES, THEREFORE, THE WRITTEN DOWN VALUE OF SUCH BLOCKS SH ALL BE TREATED AT NIL AS PER EXPLANATION TO SECTION 43(6) OF THE ACT. IN VIEW OF THE ABOVE, THE AO DETERMINED THE VALUE O F THE INTANGIBLE ASSETS IN THE HANDS OF THE ASSESSEE AT NIL VALUE AS PER THE PROVISIONS OF THE INCOME TAX ACT DESPITE THE FACT THAT THE VALUES OF THESE INTANGIBLES WERE APPROVED IN THE AMALGAMATION SCHEME. ACCORDINGLY, T HE AO DISALLOWED THE CLAIM OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERAT ION AMOUNTING TO 1,90,09,241/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LE ARNED CIT (A). 6. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTE D THAT IT IS THE 2 ND YEAR FOR CLAIMING THE DEPRECIATION ON THE GOODWILL. AS S UCH THE DEPRECIATION UNDER SECTION 32 OF THE ACT WAS ALLOWED IN THE ASSESSMENT FRAMED FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS ACTUALLY INCURRED THE COST BY ISSUING SHARES TO THE TRANSFER OR COMPANY. THEREFORE, THE SAME SHOULD BE ALLOWED AS DEDUCTION EITHER BY WAY O F DEPRECIATION OR AS REVENUE EXPENSES. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 5 - THERE WERE CERTAIN INTANGIBLE ASSETS WITH THE TRANS FER COMPANY SUCH AS TECHNICAL KNOW-HOW FOR PRODUCTS, EFFLUENT TREATMENT DISPOSAL ENTITLEMENT RIGHT, ENVIRONMENTAL CLEARANCES FROM GOVERNMENT FOR A CHEM ICAL PLANT, OTHER COMMERCIAL RIGHTS, REGISTRATIONS, EMPLOYEES WITH TH EIR EXPERIENCES, CUSTOMER BASE, EXPORT MARKET, RAW MATERIAL RESOURCES, A LARG E BANKING BASE AND MANAGEMENT EXPERTISE THOUGH NOT RECORDED IN THE BOO KS OF ACCOUNTS OF THE TRANSFEROR COMPANY BUT THEIR VALUE CANNOT BE IGNORE D FOR THE PURPOSE OF GOODWILL IN THE HANDS OF THE TRANSFEREE COMPANY. AS SUCH, THE ABOVE SAID INTANGIBLE ASSETS WERE NOT RECORDED IN THE BOOKS OF THE TRANSFEROR COMPANY AS THE ACCOUNTING STANDAR D 26 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA PROHIBITS DOING S O. THE ASSESSEE ALSO CLAIMED THAT THE PROVISIONS OF SE CTION 43(6) EXPLANATION 2(B) OF THE ACT DEALS WITH THE ASSETS A LREADY RECORDED IN THE BOOKS OF ACCOUNTS OF THE TRANSFEROR COMPANY. AS SUCH IT D OESNT DEAL ABOUT THE INTANGIBLE ASSETS ACQUIRED IN THE SCHEME OF AMALGAM ATION. SIMILAR IS THE CASE WITH THE PROVISIONS OF SECTION 43(1) AND ITS EXPLAN ATION 7 OF THE ACT. HOWEVER THE LEARNED CIT(A) DISREGARDED THE CONTENTI ON OF THE ASSESSEE BY OBSERVING THAT THE PROVISIONS OF SECTION 43(1) A ND 43(6) OF THE ACT REQUIRES TO TAKE THE ACTUAL COST OF THE AMALGAMATING COMPANY IN THE BOOKS OF THE AMALGAMATED COMPANY. AS THERE WAS NO BLOCK OF ASSES SEE FOR THE INTANGIBLES IN THE BOOKS OF THE AMALGAMATING COMPANY, THEREFORE THE SAME CANNOT BE RECORDED IN THE BOOKS OF THE AMALGAMATED COMPANY. T HE LEARNED CIT (A) ACCORDINGLY CONFIRMED THE ORDER OF THE AO. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 6 - BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNN ING FROM PAGES 1 TO 104 AND SUBMITTED THAT THE VALUE OF THE GOOD WILL W AS DULY APPROVED BY THE ORDER OF HONBLE HIGH COURT IN THE SCHEME OF AMALGA MATION DATED 12-04-2006 WHICH IS PLACED ON PAGE 57 TO 68 OF THE PAPER BOOK. ALL THE FACTS WERE BROUGHT TO THE NOTICE OF THE AUTHORITIES BELOW AND NO DEFEC T OF WHATSOEVER WAS POINTED OUT. THE LEARNED AR ALSO SUBMITTED THAT THE AMALGAMATING COMPANY WERE IN POSSESSION OF CERTAIN INTANGIBLES THOUGH THE SAME W ERE NOT RECORDED BUT THE VALUE OF THE SAME CANNOT BE IGNORED WHILE DETERMINI NG THE PURCHASE CONSIDERATION. THE LEARNED AR IN SUPPORT OF HIS CON TENTION DREW OUR ATTENTION ON PAGES 93 TO 98 OF THE PAPER BOOK WHERE THE DETAI LS OF SUCH INTANGIBLES WERE PLACED. 8. ON THE OTHER HAND, THE LEARNED DR BEFORE US SUBM ITTED THAT UNDER THE SCHEME OF THE AMALGAMATION, ALL THE ASSETS AND LIAB ILITIES OR TRANSFERRED TO THE AMALGAMATED COMPANY AT THE BOOKS VALUE. THEREFORE, THERE IS NO QUESTION OF RECORDING THE GOODWILL IN THE HANDS OF THE AMALGAMA TED COMPANY ARISES AS THERE WAS NO INTANGIBLE /GOODWILL IN THE HANDS OF T HE AMALGAMATING COMPANY. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF TH E AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS OF THE CAS E HAVE BEEN DULY ELABORATED ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 7 - IN THE PRECEDING PARAGRAPHS WHICH ARE NOT IN DISPUT E. THEREFORE, WE ARE NOT INCLINED TO REPEAT THE SAME FOR THE SAKE OF BREVITY AND CONVENIENCE. ADMITTEDLY, THE ASSESSEE CLAIMED THE DEPRECIATION 1 ST TIME ON THE INTANGIBLE ASSETS ACQUIRED IN THE SCHEME OF AMALGAM ATION AT RS. 2,53,45,655.00 IN THE ASSESSMENT 2006-07. THE ASSESSEE CARRIED FOR WARD THE WRITTEN DOWN VALUE TO THE YEAR UNDER CONSIDERATION UNDER THE INT ANGIBLE BLOCK OF ASSETS AND ACCORDINGLY CLAIMED DEPRECIATION THEREON AS PER THE PROVISIONS OF LAW. AS SUCH, THE CLAIM OF THE ASSESSEE FOR THE DEPRECIATION WAS ACCEPTED BY THE REVENUE IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR 2006-07. NO ACTION WAS TAKEN BY THE REVENUE UNDER SECTION 263 AND 147 OF THE ACT DISPUT ING THE DEDUCTION ALLOWED TO THE ASSESSEE FOR THE DEPRECIATION ON THE INTANGI BLE ASSETS ACQUIRED BY IT IN THE SCHEME OF AMALGAMATION. HOWEVER, THERE WAS NO INFOR MATION BROUGHT BEFORE US WHETHER THERE WAS ANY ASSESSMENT UNDER SECTION 1 43(3) OF THE ACT PERTAINING TO THE ASSESSMENT YEAR 2006-07 THOUGH TH E ASSESSEE BEFORE THE LEARNED CIT (A) HAS SUBMITTED AS UNDER: THE DEPRECIATION ON GOODWILL IS ALLOWED AND WAS CO RRECTLY GRANTED AS PER LAW IN THE ASSESSMENT ORDER FOR A.Y 2006-07. THE ABOVE SUBMISSION OF THE ASSESSEE BEFORE THE LEA RNER CIT (A) HAS NOT BEEN DISPUTED BY THE LEARNED CIT (A) IN HIS ORDER. 10. NOW, THE ISSUE ARISES WHETHER THE REVENUE CAN D ENY THE DEDUCTION CLAIMED BY THE ASSESSEE ON THE WRITTEN DOWN VALUE I N THE YEAR UNDER CONSIDERATION. IN OUR VIEW, THE ANSWER STANDS IN FA VOUR OF THE ASSESSEE. IT IS BECAUSE, THE REVENUE ONCE ALLOWED THE DEDUCTION FOR THE DEPRECIATION CLAIMED BY THE ASSESSEE, THEN IT IS DEBARRED TO REJECT THE CLAIM OF THE ASSESSEE IN THE SUBSEQUENT YEAR ON THE WDV CARRIED FORWARD FROM THE EARLIER ASSESSMENT YEAR. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 8 - AS SUCH, IN OUR CONSIDERED VIEW THE REVENUE WAS REQ UIRED TO DISTURB THE CLAIM OF THE ASSESSEE IN THE 1 ST YEAR ITSELF. THEREFORE, WE ARE OF THE VIEW THAT CL AIM OF THE ASSESSEE SHOULD BE ALLOWED ON THE BASIS OF PRIN CIPLES OF CONSISTENCY. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE JUDGME NT OF HONBLE SUPREME COURT IN THE CASE OF CIT VERSUS EXCEL INDUSTRIES LT D REPORTED IN 358 ITR 295 WHEREIN IT WAS HELD AS UNDER: 28. SECONDLY, AS NOTED BY THE TRIBUNAL, A CONSISTENT V IEW HAS BEEN TAKEN IN FAVOUR OF THE ASSESSEE ON THE QUESTIONS RAISED, STA RTING WITH THE ASSESSMENT YEAR 1992-93, THAT THE BENEFITS UNDER THE ADVANCE L ICENCES OR UNDER THE DUTY ENTITLEMENT PASS BOOK DO NOT REPRESENT THE REAL INC OME OF THE ASSESSEE. CONSEQUENTLY, THERE IS NO REASON FOR US TO TAKE A D IFFERENT VIEW UNLESS THERE ARE VERY CONVINCING REASONS, NONE OF WHICH HAVE BEE N POINTED OUT BY THE LEARNED COUNSEL FOR THE REVENUE. 29. IN RADHASOAMI SATSANG SAOMI BAGH V. CIT [1992] 193 ITR 321/60 TAXMAN 248 (SC) THIS COURT DID NOT THINK IT APPROPRIATE TO ALLOW T HE RECONSIDERATION OF AN ISSUE FOR A SUBSEQUENT ASSESS MENT YEAR IF THE SAME 'FUNDAMENTAL ASPECT' PERMEATES IN DIFFERENT ASSESSM ENT YEARS. IN ARRIVING AT THIS CONCLUSION, THIS COURT REFERRED TO AN INTEREST ING PASSAGE FROM HOYSTEAD V. COMMISSIONER OF TAXATION, 1926 AC 155 (PC) WHEREIN IT WAS SAID: 'PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIO N BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE CASE, OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE A PROPER APPREHEN SION BY THE COURT OF THE LEGAL RESULT EITHER OF THE CONSTRUCTION OF T HE DOCUMENTS OR THE WEIGHT OF CERTAIN CIRCUMSTANCES. IF THIS WERE PERMI TTED, LITIGATION WOULD HAVE NO END, EXCEPT WHEN LEGAL INGENUITY IS E XHAUSTED. IT IS A PRINCIPLE OF LAW THAT THIS CANNOT BE PERMITTED AND THERE IS ABUNDANT AUTHORITY REITERATING THAT PRINCIPLE. THIRDLY, THE SAME PRINCIPLE, NAMELY, THAT OF SETTING TO REST RIGHTS OF LITIGANTS , APPLIES TO THE CASE WHERE A POINT, FUNDAMENTAL TO THE DECISION, TAKEN O R ASSUMED BY THE PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT, HAS NOT BEEN TRAVERSED. IN THAT CASE ALSO A DEFENDANT IS BOUND BY THE JUDGMENT , ALTHOUGH IT MAY BE TRUE ENOUGH THAT SUBSEQUENT LIGHT OR INGENUITY M IGHT SUGGEST SOME TRAVERSE WHICH HAD NOT BEEN TAKEN. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 9 - IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACT S IN TOTALITY, WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTIO N FOR THE DEPRECIATION UNDER SECTION 32 OF THE ACT. HOWEVER, FOR THE COMPLETENESS OF THE CASE, NOW WE T URN TO THE MERIT OF THE CASE. IN THE SCHEME OF AMALGAMATION, ONE COMPAN Y IS ACQUIRED BY ANOTHER COMPANY WITH ALL THE ASSETS AND LIABILITIES INCLUDI NG RESERVE, PROVISIONS ETC. UPON ACQUISITION, IF THE PURCHASE CONSIDERATION TO BE PAID TO THE SHAREHOLDERS OF THE AMALGAMATING COMPANY EXCEEDS THE NET ASSET V ALUE (NAV), THE EXCESS AMOUNT IS RECORDED AS GOODWILL. IF NOT, IT IS RECOR DED AS CAPITAL RESERVES IN THE BOOKS OF THE AMALGAMATED COMPANY. IN THE CASE ON HAND, THE ASSESSEE COMPANY ACQUIRED ANOTHER COMPANY WITH ALL THE ASSETS, LIABILITIES/RESERVES AGAINST T HE PURCHASE CONSIDERATION TO THE SHAREHOLDERS OF THE TRANSFEROR/ AMALGAMATING COMPAN Y EXCEEDING THE NET ASSET VALUE (NAV), THE EXCESS AMOUNT WAS RECORDED AS GOOD WILL. ADMITTEDLY, THE ASSESSEE INCURRED THE COST MORE THAN THE NAV ACQUIR ED BY IT WHICH HAS ALSO BEEN APPROVED BY THE HONBLE GUJARAT HIGH COURT IN AS DISCUSSED ABOVE. THE RELEVANT FINDING OF THE HONBLE HIGH COURT READS AS UNDER: 9.4 ANY EXCESS OF THE AMOUNT OF THE CONSIDERATION OVER THE VALUE OF THE NET ASSETS OF THE TRANSFEROR COMPANY ACQUIRED BY THE TR ANSFEREE COMPANY SHALL BE RECOGNIZED IN THE TRANSFEREE COMPANYS FINANCIAL STATEMENTS AS GOODWILL ARISING ON AMALGAMATION. IF THE AMOUNT OF THE CONSI DERATION IS LOWER THAN THE VALUE OF THE NET ASSETS ACQUIRED THE DIFFERENCE SHA LL BE CREATED AS THE AMALGAMATION RESERVE AND THE SAME SHALL BE TREATED AS THE FREE RESERVE OF THE TRANSFEREE COMPANY AVAILABLE FOR THE DISTRIBUTI ON OF DIVIDEND. SIMILARLY, THERE IS ALSO NO DISPUTE IN THE AMOUNT O F THE PURCHASE CONSIDERATION AND THE NAV DETERMINED BETWEEN THE CO MPANIES, AS AVAILABLE IN ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 10 - THE ORDER OF THE AO, WHICH WAS ALSO APPROVED BY THE HONBLE GUJARAT HIGH COURT AS WELL. 11. NOW, TO RESOLVE THE CONTROVERSY WHETHER THE ASS ESSEE IS ENTITLED FOR THE DEPRECIATION UNDER THE PROVISIONS OF SECTION 32 OF THE ACT ON THE GOODWILL ACQUIRED BY IT IN THE SCHEME OF AMALGAMATION, WE NE ED TO REFER CERTAIN PROVISIONS OF LAW AS DETAILED UNDER: DEPRECIATION. 19 32. (1) 20 [IN RESPECT OF DEPRECIATION OF (I) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXX (II) KNOW-HOW, PATENTS, COPYRIGHTS, TRADE MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMIL AR NATURE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTER THE 1ST DAY OF APRIL, 1998, OWNED 21 , WHOLLY OR PARTLY, BY THE ASSESSEE 21 AND USED FOR THE PURPOSES OF THE BUSINESS 21 OR PROFESSION, THE FOLLOWING DEDUCTIONS SHALL BE A LLOWED] 22 [(I) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (II) 24 [IN THE CASE OF ANY BLOCK OF ASSETS, SUCH PERCENTAG E ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED 25 :] XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XX 38 [ PROVIDED ALSO THAT THE AGGREGATE DEDUCTION, IN RESPECT OF DEPRECIATION OF BUILDINGS, MACHINERY, PLANT OR FURN ITURE, BEING TANGIBLE ASSETS OR KNOW-HOW, PATENTS, COPYRIGHTS, T RADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMME RCIAL RIGHTS OF SIMILAR NATURE, BEING INTANGIBLE ASSETS ALLOWABLE T O THE PREDECESSOR AND THE SUCCESSOR IN THE CASE OF SUCCESSION REFERRE D TO IN CLAUSE (XIII) AND CLAUSE (XIV) OF SECTION 47 OR SECTION 170 OR TO THE AMALGAMATING COMPANY AND THE AMALGAMATED COMPANY IN THE CASE OF AMALGAMATION, OR TO THE DEMERGED COMPANY AND THE RESULTING COMPANY IN THE CASE OF DEMERGER, AS THE CASE MAY BE , SHALL NOT EXCEED IN ANY PREVIOUS YEAR THE DEDUCTION CALCULATE D AT THE PRESCRIBED RATES AS IF THE SUCCESSION OR THE AMALGA MATION OR THE DEMERGER, AS THE CASE MAY BE, HAD NOT TAKEN PLACE, AND SUCH DEDUCTION SHALL BE APPORTIONED BETWEEN THE PREDECES SOR AND THE SUCCESSOR, OR THE AMALGAMATING COMPANY AND THE AMAL GAMATED COMPANY, OR THE DEMERGED COMPANY AND THE RESULTING COMPANY, AS ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 11 - THE CASE MAY BE, IN THE RATIO OF THE NUMBER OF DAYS FOR WHICH THE ASSETS WERE USED BY THEM.] XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXX XXXXX EXPLANATION 2.FOR THE PURPOS ES OF THIS 40 [SUB-SECTION] WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS SHALL HAVE THE SAME MEANING AS IN CLAUSE * (C) OF SUB-SECTION (6) OF SECTION 43 .] 41 [EXPLANATION 3.FOR THE PURPOSES OF THIS SUB-SECTIO N, THE EXPRESSIONS ASSETS AND BLOCK OF ASSETS SHALL ME AN (A) TANGIBLE ASSETS, BEING BUILDINGS, MAC HINERY, PLANT OR FURNITURE; (B) INTANGIBLE ASSETS, BEING KNOW-HOW, PA TENTS, COPYRIGHTS, TRADE MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS O R COMMERCIAL RIGHTS OF SIMILAR NATURE. THE ABOVE PROVISION OF SECTION 32 OF THE ACT REQUIR ES ALLOWING THE DEPRECIATION TO THE AMALGAMATED COMPANY IN THE SAME MANNER WHICH WOULD HAVE BEEN ALLOWED TO THE AMALGAMATING COMPANY IN TH E EVENT HAD THERE NOT BEEN ANY AMALGAMATION. SIMILARLY, THE ACTUAL COST OF THE ASSETS ACQUIRED I N THE SCHEME OF AMALGAMATION IN THE HANDS OF THE AMALGAMATED COMPAN Y WILL CONTINUE TO BE THE SAME AS IT WOULD HAVE BEEN IN THE HANDS OF THE AMALGAMATING COMPANY IN THE EVENT, HAD THERE NOT BEEN ANY AMALGAMATION. THE RELEVANT EXTRACT OF THE EXPLANATION 7 TO SECTION 43(1) READS AS UNDER: DEFINITIONS OF CERTAIN TERMS RELEVANT TO INCOME FR OM PROFITS AND GAINS OF BUSINESS OR PROFESSION. 43. IN SECTIONS 28 TO 41 AND IN THIS SECTION, UNLESS T HE CONTEXT OTHERWISE REQUIRES 3 4 (1) ACTUAL COST MEANS THE ACTUAL COST 3 OF THE ASSETS TO THE ASSESSEE, REDUCED BY THAT PORTION OF THE COST THEREOF, IF ANY , AS HAS BEEN MET3 DIRECTLY OR INDIRECTLY BY ANY OTHER PERSON OR AUTHORITY: ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 12 - XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXX X 14 [EXPLANATION 7.WHERE, IN A SCHEME OF AMALGAMATION, ANY CAPITAL ASSET IS TRANSFERRED BY THE AMALGAMATING COMPANY TO THE AMAL GAMATED COMPANY AND THE AMALGAMATED COMPANY IS AN INDIAN COMPANY, THE A CTUAL COST OF THE TRANSFERRED CAPITAL ASSET TO THE AMALGAMATED COMPAN Y SHALL BE TAKEN TO BE THE SAME AS IT WOULD HAVE BEEN IF THE AMALGAMATING COMP ANY HAD CONTINUED TO HOLD THE CAPITAL ASSET FOR THE PURPOSES OF ITS OWN BUSINESS.] WE FURTHER NOTE THAT THE WDV OF THE ASSETS ACQUIRED IN THE SCHEME OF AMALGAMATION IN THE HANDS OF THE AMALGAMATED COMPAN Y WILL CONTINUE TO BE THE SAME AS IT WOULD HAVE BEEN IN THE HANDS OF THE AMALGAMATING COMPANY IN THE EVENT, HAD THERE NOT BEEN ANY AMALGAMATION. THE RELEVANT EXTRACT OF THE EXPLANATION 2 TO SECTION 43(6)(C) OF THE ACT READS AS UNDER: (6) WRITTEN DOWN VALUE MEANS XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXX XX 42 [EXPLANATION 2.WHERE IN ANY PREVIOUS YEAR, ANY BLO CK OF ASSETS IS TRANSFERRED, (A) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XX XX (B) BY THE AMALGAMATING COMPANY TO THE AMALGAMATE D COMPANY IN A SCHEME OF AMALGAMATION, AND THE AMALGAMATED COMPA NY IS AN INDIAN COMPANY, THEN, NOTWITHSTANDING ANYTHING CONT AINED IN CLAUSE (1), THE ACTUAL COST OF THE BLOCK OF ASSETS IN THE CASE OF THE TRAN SFEREE-COMPANY OR THE AMALGAMATED COMPANY, AS THE CASE MAY BE, SHALL BE THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS AS IN THE CASE OF THE TRANSFEROR- COMPANY OR THE AMALGAMATING COMPANY FOR THE IMMEDIA TELY PRECEDING PREVIOUS YEAR AS REDUCED BY THE AMOUNT OF DEPRECIATION ACTUALLY ALLOWED IN RELATION TO THE SAID PRECEDING PREVIOUS YEAR.] AS PER SECTION 32(1) OF THE IT ACT 'DEPRECIATION' I S TO BE COMPUTED ON 'ACTUAL COST'/'WRITTEN DOWN VALUE OF THE BLOCK OF A SSETS' ASCERTAINED IN ACCORDANCE WITH SECTION 43 OF THE ACT. FURTHER, A R EADING OF THE ABOVE PROVISION SHOWS THAT IN RESPECT OF 'CAPITAL ASSETS' TRANSFERRED BY THE ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 13 - AMALGAMATING COMPANY TO THE AMALGAMATED COMPANY, TH E COST/WRITTEN DOWN VALUE OF THE TRANSFERRED CAPITAL ASSET TO THE AMALG AMATED COMPANY SHALL BE TAKEN TO BE THE SAME AS IT WOULD HAVE BEEN HAD THE AMALGAMATING COMPANY CONTINUED TO HOLD THE CAPITAL ASSET FOR THE PURPOSE S OF ITS OWN BUSINESS. A COMBINED READING OF THE ABOVE PROVISIONS REVEALS THAT THE INTENTION OF THE LEGISLATURE BEHIND THE INTRODUCTION OF THE AMAL GAMATION SCHEME WAS TO ACHIEVE TAX NEUTRALITY. BESIDES THE ABOVE, THE INTE NTION OF THE LEGISLATURE IS REFLECTING FROM THE FOLLOWING PROVISIONS: I. THERE IS NO CAPITAL GAIN IN THE HANDS OF THE AMALGA MATING COMPANY ON THE TRANSFER OF CAPITAL ASSETS IN THE SCHEME OF AMALGAMATION UNDER THE PROVISIONS OF SECTION 47(VI) OF THE ACT. II. THE COST OF STOCK-IN TRADE IN THE HANDS OF AMALGAM ATED COMPANY SHALL REMAIN THE SAME AS IN THE HANDS OF AMALGAMATI NG COMPANY EITHER AS CAPITAL ASSET OR STOCK IN TRADE AS PROVID ED UNDER SECTION 43C OF THE ACT. III. PROVISIONS RELATING TO CARRY FORWARD AND SET OFF OF ACCUMULATED LOSS AND UNABSORBED DEPRECIATION ALLOWANCE IN AMALGAMATI ON OR DEMERGER, ETC UNDER THE PROVISIONS OF SECTION 72A OF THE ACT. IV. EXEMPTION OF CAPITAL GAINS IN THE HANDS OF SHAREHOL DERS OF AMALGAMATING COMPANY ON TRANSFER OF SHARES OF AMALG AMATING COMPANY IN THE SCHEME OF AMALGAMATION UNDER THE PRO VISIONS OF SECTION 47 (VII) OF THE ACT. V. COST OF CAPITAL ASSETS TO BE THE SAME AS IN THE HAN DS OF PREVIOUS OWNER WHERE CAPITAL ASSETS BECAME THE ASSETS OF THE SUCCESSOR AS A RESULT OF TRANSFER UNDER SECTION 47( VI ) R.W.S. 49(1)(III)(E) OF THE ACT. VI. COST OF SHARES OF AMALGAMATED COMPANY IN THE HANDS OF SHAREHOLDERS, RECEIVED AS CONSIDERATION FOR TRANSFE R OF SHARES OF AMALGAMATING COMPANY, TO BE SAME AS THE COST OF SHARES OF AMALGAMATING COMPANY UNDER SECTION 49(2) OF THE ACT . ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 14 - FROM THE ABOVE, IT WOULD APPEAR THAT THE INTENT OF THE LEGISLATURE IS TO MAKE AMALGAMATION A TAX NEUTRAL SCHEME FOR COMPANIES AS WELL AS FOR THE SHAREHOLDERS AND NOT TO PROVIDE A TAX PLANNING MECH ANISM TO EITHER OF THEM. 12. NOW COMING TO THE PRESENT FACTS OF THE CASE WE NOTE THAT INDEED THERE WAS NO ENTRY IN THE BOOKS OF THE TRANSFEROR COMPANY FOR THE INTANGIBLE ASSETS/ GOODWILL BEING SELF GENERATED ASSETS. THUS IN THE B ACKDROP OF THE ABOVE STATED FACTS WE ARE OF THE VIEW THAT IMPUGNED TRANSACTION FOR CLAIMING THE DEDUCTION ON ACCOUNT OF THE DEPRECIATION IS AN ARRANGEMENT FO R CLAIMING THE HIGHER DEPRECIATION WHICH IS UNWANTED UNDER THE PROVISIONS OF LAW. BEFORE PARTING, WE ARE CONSCIOUS TO THE FACT THAT T HE ASSESSEE WAS ALLOWED FOR DEPRECIATION IN RESPECT OF SUCH GOODWIL L IN THE 1 ST YEAR OF AMALGAMATION I.E. AY 2006-07. THERE WAS NO ACTION E ITHER UNDER SECTION 263 OR 147 OF THE ACT BY THE REVENUE. THEREFORE WE CAN SAFELY PRESUME THAT THE CLAIM OF THE DEPRECIATION OF THE ASSESSEE IN THE 1 ST YEAR HAS ATTAINED FINALITY. ADMITTEDLY THE 1 ST YEAR IS THE BASE ASSESSMENT YEAR FROM WHERE THE IS SUE OF DEPRECIATION IS EMANATING. 13. THE QUESTION ARISES ONCE THE DEPRECIATION HAS B EEN ALLOWED IN THE 1 ST YEAR THEN THE SAME CAN BE DISTURBED IN THE SUBSEQUE NT YEAR WITHOUT HAVING ANY CHANGE IN THE FACTS AND CIRCUMSTANCES. IN OUR CONSI DERED VIEW, IN SUCH A CASE THE PRINCIPLES OF CONSISTENCY SHALL BE APPLIED AS H ELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. QUEST INVESTMENT ADVISORS LTD. REPORTED IN 96 TAXMANN.COM 157 WHEREIN IT WAS HELD AS UNDER: ONCE THIS PRINCIPLE WAS ACCEPTED AND CONSISTENTLY APPLIED AND FOLLOWED, THE REVENUE WAS BOUND BY IT. UNLESS OF COURSE IT WANTED TO CHANGE THE PRACTICE WITHOUT ANY CHANGE IN LAW OR CHANGE IN FACTS THEREI N, THE BASIS FOR THE CHANGE ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 15 - IN PRACTICE SHOULD HAVE BEEN MENTIONED EITHER IN TH E ASSESSMENT ORDER OR ATLEAST POINTED OUT TO THE TRIBUNAL WHEN IT PASSED THE IMPUGNED ORDER. NONE OF THIS HAS HAPPENED. IN FACT, ALL HAVE PROCEEDED O N THE BASIS THAT THERE IS NO CHANGE IN THE PRINCIPLE WHICH HAS BEEN CONSISTENTLY APPLIED FOR THE EARLIER ASSESSMENT YEARS AND ALSO FOR THE SUBSEQUENT ASSESS MENT YEARS. THEREFORE, THE VIEW OF THE TRIBUNAL IN ALLOWING THE RESPONDENT'S A PPEAL ON THE PRINCIPLE OF CONSISTENCY CANNOT IN THE PRESENT FACTS BE FAULTED WITH, AS IT IS IN ACCORD WITH THE APEX COURT DECISION IN BHARAT SANCHAR NIGAM LTD . V. UNION OF INDIA [2006] 282 ITR 273. [PARA 9] IN VIEW OF THE ABOVE, THE ASSESSEE SUCCEEDS ON THE PRINCIPLE OF CONSISTENCY. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND DIRECT THE AO TO ALLOW THE DEPRECIATION TO THE ASSE SSEE. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 14. AS, WE HAVE DECIDED THE MAIN GROUND OF APPEAL I N FAVOUR OF THE ASSESSEE, WE ARE NOT INCLINED TO ADJUDICATE THE ISS UE RAISED IN GROUND 3 AS ALTERNATE CLAIM FOR THE VALUATION OF THE GOODWILL. HENCE, WE DISMISS THE SAME. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. COMING TO THE REVENUES APPEAL IN ITA NO. 597/AHD/2 014 FOR THE ASSESSMENT YEAR 2007-08 : 16. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (1) THE LD CIT(A) HAS ERRED IN LAW AND IN DELETING THE PENALTY OF RS.87,91,233/- LEVIED U/S 271(1)(C) OF THE ACT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) HAS OUGHT TO HAVE UPHELD THE PENALTY ORDER U /S 271(1)(C) OF THE ACT. (3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 16 - 17. AT THE OUTSET, WE NOTE THAT, THE IMPUGNED APPEA L IS EMANATING FROM THE QUANTUM APPEAL BEARING ITA NO. 1439/AHD/2011 WHICH WE HAVE DECIDED IN FAVOUR OF THE ASSESSEE VIDE PARAGRAPH NUMBER 9 TO 1 3 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARA GRAPH. ONCE THE QUANTUM ADDITION HAS BEEN DELETED, THEN THE PENALTY AGAINST SUCH ADDITION DOES NOT SURVIVE. ACCORDINGLY WE DISMISS THE GROUND OF APPEA L OF THE REVENUE. 18. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. COMING TO THE ASSESSEES APPEAL IN ITA NO. 42/AHD/2 012 FOR THE ASSESSMENT YEAR 2008-09 : 19. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: (1) THAT ON FACTS AND IN LAW THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) HAS GRIEVOUSLY ERRED IN CONFIRMING THE DI SALLOWANCE OF DEPRECIATION ON GOODWILL OF RS.1,50,81,301/-. (2) THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HA S GRIEVOUSLY ERRED IN HOLDING THAT THE ASSESSEE HAS NOT ACQUIRED ANY INTA NGIBLE ASSETS AND THEREBY CONFIRMING THE DISALLOWANCE BY APPLYING INA PPLICABLE PROVISIONS OF THE I.T. ACT, 1961. (3) THAT THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN NOT DECIDING THE GROUND REGARDING ALTERNATE VALUATION OF GOODWILL DO NE BY A.O. (4) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. 20. AT THE OUTSET, WE NOTE THAT THE IDENTICAL ISSUE RAISED IN GROUND NO. 1 AND 2 IN THE OWN CASE OF THE ASSESSEE IN ITA NO. 1439/A HD/2011 HAS BEEN DECIDED BY US IN ITS FAVOR VIDE PARAGRAPH NUMBER 9 TO 13 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RE SPECTFULLY, FOLLOWING THE SAME WE ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 17 - 21. SIMILARLY, THE ISSUE RAISED IN GROUND NO. 3 HAS ALSO BEEN DISMISSED BY US IN THE OWN CASE OF THE ASSESSEE IN ITA NO. 1439/ AHD/2011 VIDE PARAGRAPH NUMBER 14 OF THIS ORDER. FOR THE DETAILED DISCUSSIO N, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME WE DISMI SS THE GROUND OF APPEAL OF THE ASSESSEE. 22. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. COMING TO THE ASSESSEES AND REVENUES APPEALS IN I TA NO. 2249/AHD/2018 AND IT(SS)A NO. 397/AHD/2018 FOR THE ASSESSMENT YEA R 2009-10 : 23. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1.1 THE ORDER PASSED U/S 250 ON 04.09.2018 FOR A.Y . 2009-10 BY CIT(A)- 11, AHMEDABAD CONFIRMING THE DISALLOWANCE OF DEPREC IATION ON GOODWILL OF RS.1,13,10,975/- AND NOT ADJUDICATING T HE GROUND OF APPEAL RELATING TO ADDITION OF RS.40,76,854/- TOWAR DS UNUTILIZED CENVAT CREDIT IS WHOLLY ILLEGAL, ULAWFUL AND AGAINS T THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN ADJUDICATING THE GROUND OF APPEAL AGAINST THE ORDER U/S 143(3) R.W.S. 153A DATED . INSTEAD OF THE ORDER OF REGULAR ASS ESSMENT PASSED U/S 143(3) ON 27.12.2011. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEPRECATION ON GOODW ILL OF RS.1,13,10,975/- AND NOT ADJUDICATING THE GROUND OF APPEAL RELATING TO ADDITION OF RS.40,76,854/- TOWARDS UNUTILIZED CENVA T CREDIT. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECATION ON GOODWILL OF RS.1,13,10,975/- AND NOT ADJUDICATING THE GROUND OF APPEAL RELATING TO ADDITION OF RS.40,76,854/- TOWARDS UNUTILIZED CENVA T CREDIT. IT IS, THEREFORE, PRAYED THAT THE DISALLOWANCE OF R S.1,13,10,975/- TOWARDS DEPRECIATION AND ADDITION OF RS.40,76,854/- TOWARDS UNUTILIZED CENVAT CREDIT MAY PLEASE BE DELETED. ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 18 - COMING TO THE REVENUES APPEAL IN IT(SS)A NO. 357/A HD/2018 FOR THE ASSESSMENT YEAR 2009-10 : 24. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IS NOT APPR ECIATING THE PROVISIONS OF SECTION 153A OF THE I T ACT, 1961 WHI CH REQUIRES THE TOTAL INCOME TO BE BROUGHT UNDER TAX WITHOUT ANY RESTRICT IONS. 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE C ASE AND IN LAW. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT SUCH ASSESSMENT OR REASSESSMENT U/S 153A OF THE I T ACT, 1961 IS TO BE RESTRICTED ONLY TO THE INCRIMINATING MATERIALS FOUN D DURING THE SEARCH. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E DISALLOWANCE OF RS.9,85,57,184/- MADE BY THE AO ON ACCOUNT OF FOREX DERIVATIVES LOSSES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E DISALLOWANCE OF RS.1,13,10,975/- MADE BY THE AO ON ACCOUNT OF DEPRE CIATION OF GOODWILL. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E DISALLOWANCE OF RS.2,07,518/- MADE BY THE AO U/S 14A OF THE I T ACT . 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 7. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTEN T. 25. AT THE OUTSET, WE NOTE THAT THE APPEAL FILED BY THE ASSESSEE AND THE REVENUE ARE EMANATING FROM THE ORDER OF THE AO FRAM ED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT BUT THE LEARNED CIT(A) HAS P ASSED THE ORDER RECORDING THE FACT THAT THE APPEAL WAS FILED BY THE ASSESSEE BEFORE HIM AGAINST THE ASSESSMENT ORDER FRAMED UNDER SECTION 143(3) OF THE ACT. THE RELEVANT OBSERVATION OF THE LEARNED CIT (A) IN HIS ORDER DAT ED 4 TH OF SEPTEMBER 2018 STANDS AS UNDER: ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 19 - INSTITUTED ON 30-01-2012 FROM THE ASSESSMENT ORDER U/S 143(3) OF THE ACIT CENTRAL CIRCLE-1(1) AHMEDABAD [ SHRI R.K. DHANESTA] WE ALSO FIND FROM THE ORDER OF THE LEARNED CIT (A) WHEREIN IT WAS RECORDED THAT IN COLUMN NO. 5 REPRODUCED AS UNDER: 5 SECTION AND SUBSECTION UNDER : 143(3) OF THE ACT , 1961 WHICH THE APPEALED ORDER IS PASSED WE ALSO NOTE THAT THE LEARNED CIT (A) HAS RECORDED IN HIS ORDER THAT THE APPEAL HAS BEEN PREFERRED AGAINST THE ASSESSMENT OR DER FRAMED UNDER SECTION 143(3) OF THE ACT. THE RELEVANT FINDING OF THE CIT (A) STANDS AS UNDER: THIS APPEAL IS FILED ON 30-01-2012 AGAINST THE ASS ESSMENT ORDER U/S. 143(3) OF THE I.T. ACT, 1961 DATED 27-12-2011 PASSED BY AC IT, CENTRAL CIRCLE-1(1), AHMEDABAD FOR A.Y. 2009-10. IN VIEW OF THE ABOVE, WE HOLD THAT THE OBSERVATION MADE BY THE LEARNED CIT (A) IN HIS ORDER DATED 4 TH OF SEPTEMBER 2018 IS NOT IN PURSUANCE TO THE PROVISIONS OF LAW. AS SUCH, WE OPINED THAT THE LEAR NED CIT (A) WAS TO RECORD THE CORRECT SECTION OF THE ACT AGAINST WHICH THE AP PEAL WAS PREFERRED BY THE ASSESSEE. 26. BEFORE US, THE LEARNED AR FOR THE ASSESSEE REQU ESTED TO RESTORE THE MATTER TO THE FILE OF THE LEARNED CIT-A WITH THE DI RECTION TO RECORD THE CORRECT SECTION OF THE ACT IN WHICH THE ASSESSMENT WAS FRAM ED BY THE AO TO ADJUDICATE THE ISSUE AFRESH AS PER THE PROVISIONS OF LAW. 27. THE LEARNED DR RAISED NO OBJECTION IF THE MATTE R IS SET ASIDE TO THE FILE OF THE LEARNED CIT (A). ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 20 - IN VIEW OF THE ABOVE FACTS DISCUSSED ABOVE AND THE PRAYER OF THE LEARNED AR AND THE NO OBJECTION FROM THE DR, WE, IN THE INT EREST OF JUSTICE AND FAIR PLAY ARE INCLINED TO RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CIT-A TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE ABO VE STATED DISCUSSION AND IN ACCORDANCE TO THE PROVISIONS OF LAW. HENCE, THE APP EAL FILED BY THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR THE STATISTICAL PUR POSES. 28. IN THE COMBINED RESULT, ASSESSEES APPEALS BEA RING ITA NOS.1439/AHD/2011 AND 42/AHD/2012 ARE PARTLY ALLOWE D AND REVENUES APPEAL BEARING ITA NO.597/AHD/2014 IS DISMISSED AND ASSESS EES AND REVENUES APPEALS BEARING ITA NO.2249/AHD/2018 AND IT(SS)A NO .357/AHD/2018 ARE ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 16 / 10 /201 9 SD/- SD/- ( MADHUMITA ROY ) (W ASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 16/10/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD ITA NOS.1439/AHD/2011, 42/AHD/2012, 597/AHD/2014, 2 249/AHD/2018 & IT(SS)A NO.357/AHD/18 BODAL CHEMICALS PVT. LTD. ASST.YEARS 2007-08, 2008-09 & 2009-10 - 21 - 1. DATE OF DICTATION 07.10.2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09.10.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 14.10.2019 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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