Danfos Power Solutions India Private Limited, Pune V. Deputy Commissioner of Income-tax, Circle - 1(2), Pune

ITA 2673/PUN/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8682 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 16-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Revised return
• Section: 32; 143(3); 207

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI DR. DIPAK P. RIPOTE, AM आयकर अपीऱ सं. / ITA No.2673/PUN/2017 ननधधारण वषा / Assessment Year : 2012-13 Danfoss Power Solutions India Pvt.Ltd., Gat No. 94-100, Hi-Cliff Industrial Estate, Wagholi – Rahu Road, Kesnand, Off Nagar Road, Pune – 412 207 PAN : AAFCS2954P .......अपऩलधथी / Appellant बनधम / V/s. DCIT, Circle- 1(2), Pune ......प्रत्यथी / Respondent Assessee by : Shri Nikhil Pathak Revenue by : Shri S. P. Walimbe सपनवधई की तधरऩख / Date of Hearing : 12.05.2022 घोषणध की तधरऩख / Date of Pronouncement : 10.06.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This assessee‟s appeal for A.Y. 2012-13 is directed against the CIT(A), Pune‟s order dated 24/08/2017 passed in case No. ITBA/APL/S/250/2017- 18/1005884886(1) involving proceeding u/s. 143(3) of the Income Tax Act, 1961 ; in short "the Act”. Heard both the parties. Case file perused. 2. Learned counsel states at the outset that the assessee does not press for its first and foremost substantive ground as well as petition dated 2 ITA No.2673/PUN/2017 Danfoss Power Solutions India Pvt.Ltd., 27.08.2021 raising the issues of the disallowance of provision for expenses amounting to Rs.2,62,591/- and Rs.15,28,959/- representing education, secondary and higher education cess; respectively. Rejected accordingly. 3. Next comes the sole surviving issue of depreciation disallowance relating to goodwill amounting to Rs.2,11,52,210/- arising on acquisition of business undertaking from M/s. Dantal Hydrolics Ltd. in financial year 2001- 02 relevant to A.Y. 2002-03. 4. There is hardly any dispute between the parties such as a depreciation claim pertaining to goodwill is indeed allowable once hon‟ble apex court having settled the law in case (2012) 348 ITR 302 (SC) Smifs Securities Ltd. Their lordships have admittedly considered Sec.32(1)(II) read with Explanation 3(b) of the Act that a goodwill indeed forms intangible asset eligible for depreciation. 5. The department at this stage invited our attention to the Assessing Officer‟s assessment discussion that the assessee‟s claim could not even been entertained since not filed even in a revised return as per Goetze India Ltd. V/s. CIT (2006) 284 ITR 323 (SC). Suffice to say, that the CIT(A) has gone a step ahead of the assessment discussion in holding that although their lordships have made it clear that the appellate authorities‟ jurisdiction to entertain a new claim without a revised return has nowhere been impinged upon in any manner whatsoever. His findings in paras 10 onwards hold that the assessee had already amortized cost of the assets in issue over a period 3 ITA No.2673/PUN/2017 Danfoss Power Solutions India Pvt.Ltd., of three years on straight line method and therefore, rejected the impugned claim of depreciation on goodwill therefore. 6. We have given our thoughtful consideration to vehement rival contentions against and in support of impugned disallowance and find no force in Revenue‟s stand reiterating the CIT(A)‟s detailed discussion. We first of all observe that such a depreciation on goodwill is indeed allowable now in view of forgoing legal position whereas the Revenue‟s endevour is to treat it as an instance of no such written down value „WDV‟ available anymore (supra). Face with this situation, we are of the opinion that the assessee‟s impugned claim; although held allowable as well as maintainable as a mandatory deduction in light of Sec. 32 Explanation 5, requires the Assessing Officer‟s afresh computation taking into consideration all the necessary facts as per law. The instant sole issue is restored back to him with a rider that it shall be assessee‟s bounden duty only to file record all the relevant details in consequential proceedings. Ordered accordingly. 7. This assessee‟s appeal is partly allowed for statistical purposes in above terms. Order pronounced in the Open Court on this 10 th day of June, 2022. Sd/- Sd/- SS (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 10 th June, 2022. Ashwini 4 ITA No.2673/PUN/2017 Danfoss Power Solutions India Pvt.Ltd., आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपऩलधथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)- Pune. 4. The Pr.CIT-1, Pune. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. 6. गधर्ा फ़धइल / Guard File. आदेशधनपसधर / BY ORDER, // True Copy // Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune. 5 ITA No.2673/PUN/2017 Danfoss Power Solutions India Pvt.Ltd., S.No. Details Date Initials 1 Draft dictated on 12.05.2022 2 Draft placed before author 08.06.2022 3 Draft proposed & placed before the Second Member ` 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order