VIACOM 18, MEDIA PVT LTD ,MUMBAI V. PCIT-8, MUMBAI

ITA 2591/MUM/2025

AI Insights

The case revolves around the appeal by Viacom 18 Media Pvt. Ltd. against the revisional order passed by the PCIT under section 263 of the Income Tax Act, concerning the assessment year 2019-2020. The PCIT had set aside the original assessment order, which was passed by the faceless assessment unit, on grounds that it was erroneous and prejudicial to the interests of the Revenue, particularly concerning the depreciation on goodwill and the carry forward of losses. The Tribunal examined the legal and factual basis of the PCIT's order and found that the original assessment had been conducted after thorough verification and was in accordance with the law, including the applicable judicial precedents and statutory amendments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787979 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: misc
• Appeal Filed On: 15-04-2025
• Other Referred Cases: CIT vs. Smifs Securities Ltd., Areva T & D India Ltd vs DCIT, Viacom 18 vs ACIT, B. Raveendran Pillai vs CIT, CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd, Skyline Caterers (P.) Ltd. vs. ITO, Bosch Ltd. vs. CIT, Kotak Forex Brokerage Ltd. vs. ACIT, A.P. Paper Mills Ltd. vs. ACIT, Mylan Laboratories Limited vs. Dy. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: MADHUR AGARWAL MOKSHA
• Keywords: Set aside; Business income; Transfer pricing; International transaction; Depreciation; Additional depreciation; Cost of acquisition; Rule of consistency; Valuation report; Assessment record; Wholly owned subsidiary; Scheme of amalgamation; Carry forward of business losses
• Section: 143(3); 142(1); 263; 32

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 2591/MUM/2025 Assessment Year: 2019-2020 Viacom 18 Media Pvt. Ltd., One Unity Centre, Tower 4, Sanapati Babat Marg, Prabhadevi, Mumbai-400013. Vs. Pr. CIT-8, Aayakar Bhavan, Maharshi Karve Road, Churchgate, Mumbai-400020. PAN NO. AAACM 9164 E Appellant Respondent Assessee by : Mr. Madhur Agarwal/Ms. Moksha Mehta Revenue by : Mr. Vivek Perampurna, CIT-DR Date of Hearing : 15/09/2025 Date of pronouncement : 27/11/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against revisional order dated 18/03/2025 passed by the learned Principal Commissioner of Income-tax, Mumbai-8 [in short ‘the learned PCIT’] under section 263 of Income-tax Act, 1961 (in short ‘the Act’) wherein he set aside the assessment order passed by the faceless assessment unit (in short ‘the Assessing Officer’) holding it to be erroneous insofar as Printed from counselvise.com prejudicial to the interest of the R assessee in its appeal are reproduced as under: On the facts and in the circumstances of the case and in law, the learned Principal Commissioner of Order under section 263 is without jurisdiction, unwarranted and bad in law 1. erred in invoking revision proceedings under section 263 of the Income Tax Act, 1961 ('the Act') without appreciating that assessment order passed by the ('NeAC') ('Assessment Order') was neither erroneous nor prejudicial to the interest of the revenue; 2. failed to appreciate that the Assessment Order was passed after verification of relevant details and documentary evidence and application of mind vis depreciation on goodwill and carry forward of losses; 3. failed to appreciate that the NeAC had taken a plausible view supported by judicial precedents and prospective amendment in Section 32 of the Ac Without prejudice to above, the learned PCIT has: Disallowance of Depreciation on Goodwill 4. erred in directing the learned Jurisdictional Assessing Officer ('AO') to verify and disallow the claim of depreciati as consistently disallowed by the Department in other years; 5. failed to appreciate that in view of prospective amendment in Section 32 of the Act, depreciation on goodwill is allowable for and upto AY 2020 6. without prejudice to the a total amount of depreciation of Rs. 195,32,57,760, only an Amount of Rs. 1,87,75,81,932 pertains to depreciation on goodwill on merger of Prism TV Pvt. Ltd. and Rs. 85,655 pertains to goodwill on acquisition of Studio Rs. 7,55,90,173 pertains to depreciation on Voot platform (which is an intangible asset) and not goodwill. Short-grant of carry forward of losses Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 udicial to the interest of the Revenue. The grounds raised by the assessee in its appeal are reproduced as under: On the facts and in the circumstances of the case and in law, the learned Principal Commissioner of Income tax ('PCIT) has: Order under section 263 is without jurisdiction, unwarranted and 1. erred in invoking revision proceedings under section 263 of the Income Tax Act, 1961 ('the Act') without appreciating that assessment order passed by the National e-Assessment Centre ('NeAC') ('Assessment Order') was neither erroneous nor prejudicial to the interest of the revenue; 2. failed to appreciate that the Assessment Order was passed after verification of relevant details and documentary evidence and application of mind vis-à-vis issues pertaining to depreciation on goodwill and carry forward of losses; 3. failed to appreciate that the NeAC had taken a plausible view supported by judicial precedents and prospective amendment in Section 32 of the Act and had allowed depreciation on goodwill; Without prejudice to above, the learned PCIT has: Disallowance of Depreciation on Goodwill 4. erred in directing the learned Jurisdictional Assessing Officer ('AO') to verify and disallow the claim of depreciation on goodwill as consistently disallowed by the Department in other years; 5. failed to appreciate that in view of prospective amendment in Section 32 of the Act, depreciation on goodwill is allowable for and upto AY 2020-21; 6. without prejudice to the above, failed to appreciate that out of total amount of depreciation of Rs. 195,32,57,760, only an Amount of Rs. 1,87,75,81,932 pertains to depreciation on goodwill on merger of Prism TV Pvt. Ltd. and Rs. 85,655 pertains to goodwill on acquisition of Studio 18 and the balance amount of Rs. 7,55,90,173 pertains to depreciation on Voot platform (which is an intangible asset) and not goodwill. grant of carry forward of losses Viacom 18 Media Pvt. Ltd 2 ITA No. 2591/MUM/2025 evenue. The grounds raised by the On the facts and in the circumstances of the case and in law, the Income tax ('PCIT) has: Order under section 263 is without jurisdiction, unwarranted and 1. erred in invoking revision proceedings under section 263 of the Income Tax Act, 1961 ('the Act') without appreciating that Assessment Centre ('NeAC') ('Assessment Order') was neither erroneous nor 2. failed to appreciate that the Assessment Order was passed after verification of relevant details and documentary evidence vis issues pertaining to 3. failed to appreciate that the NeAC had taken a plausible view supported by judicial precedents and prospective amendment in t and had allowed depreciation on goodwill; 4. erred in directing the learned Jurisdictional Assessing Officer on on goodwill as consistently disallowed by the Department in other years; 5. failed to appreciate that in view of prospective amendment in Section 32 of the Act, depreciation on goodwill is allowable for bove, failed to appreciate that out of total amount of depreciation of Rs. 195,32,57,760, only an Amount of Rs. 1,87,75,81,932 pertains to depreciation on goodwill on merger of Prism TV Pvt. Ltd. and Rs. 85,655 pertains 18 and the balance amount of Rs. 7,55,90,173 pertains to depreciation on Voot platform (which Printed from counselvise.com 7. erred in determining the amount of carried forward losses at Rs. 6,86,23,58,7 allowed by the 2. Briefly stated facts of the case are that the Media Private limited under the provisions of the Companies A under consideration, the assessee was engag activities inter-alia, broadcasting of television channels; marketing and advertising airtime on television channels; distribution of television channels; over platform; licensing and merchandising products; events and production/distribution of films/programs etc 2.1 The assessee assessment year under consideration on 29/11/2019, which was further revised on 30/03/2020 declarin 289,31,48,390/-. The return filed by the assessee was selected for the scrutiny assessment Act were issued and complied with transfer pricing reference was also made for determination of the arm’s-length price of the international transactions carried out by the assessee. The faceless assessment unit order under section 143(3) 26/09/2022 determining total loss at making variations proposed by the learned Transfer Pricing O Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 7. erred in determining the amount of carried forward losses at Rs. 6,86,23,58,774 instead of Rs. 10,22,35,12,612, as correctly the NeAC. stated facts of the case are that the assessee Viacom18 Media Private limited is a company incorporated on 19/12/1995 he provisions of the Companies Act, 1956. During under consideration, the assessee was engaged in business , broadcasting of television channels; marketing and advertising airtime on television channels; distribution of television channels; over-the-top(OTT) and digital cont ing and merchandising products; events and production/distribution of films/programs etc assessee filed its regular return of income for the assessment year under consideration on 29/11/2019, which was further revised on 30/03/2020 declaring total loss of rupees ( . The return filed by the assessee was selected for the scrutiny assessment and statutory notices under the Income Act were issued and complied with. During the scrutiny proce transfer pricing reference was also made for determination of the length price of the international transactions carried out by faceless assessment unit passed assessment order under section 143(3) read with section 144B of th 26/09/2022 determining total loss at (-) ₹281,32,98, ations proposed by the learned Transfer Pricing O Viacom 18 Media Pvt. Ltd 3 ITA No. 2591/MUM/2025 7. erred in determining the amount of carried forward losses at 74 instead of Rs. 10,22,35,12,612, as correctly assessee Viacom18 is a company incorporated on 19/12/1995 ct, 1956. During the year ed in business , broadcasting of television channels; marketing and advertising airtime on television channels; distribution of top(OTT) and digital content delivery ing and merchandising products; organising live events and production/distribution of films/programs etc. return of income for the assessment year under consideration on 29/11/2019, which was g total loss of rupees (-) . The return filed by the assessee was selected for and statutory notices under the Income- . During the scrutiny proceeding transfer pricing reference was also made for determination of the length price of the international transactions carried out by passed assessment read with section 144B of the Act on 2,98,884/- after ations proposed by the learned Transfer Pricing Officer. Printed from counselvise.com 2.2 Subsequently, the learned PCIT called for the records and after examination, he was of the view assessment order passed by the Assessing Officer was erroneous insofar as prejudicial to the interest of the R two issues: (i) incorrect allowance of depreciation on amalgamation which was denied in earlier a 2016-17 and 2017 (ii) incorrect determination of carry 2.3 In view of above observations, the learned PCIT issued a show cause notice dated 22/11/ the assessment order should not be revised on above two issues The Authorised Representative the faceless assessment unit after due consideration of the submission of the assessee and accepted the claim of depreciation on goodwill amalgamation of ‘Prism TV P Ltd contended that revisionary proceedings against assessment order cannot be initiated unless conjunctive conditions of section 263 are satisfied. It was further contended that Assessing Officer had duly examined all the records at the time of assessment proceeding due application of mind and therefore even the deeming condition under Explanation- 2 to section 263 also filed submissions on the merit of the both the issues and Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 Subsequently, the learned PCIT called for the records and after examination, he was of the view assessment order passed by the Assessing Officer was erroneous udicial to the interest of the Revenue incorrect allowance of depreciation on ‘goodwill amalgamation which was denied in earlier assessment years 17 and 2017-18 by the Assessing Officer incorrect determination of carry-forward of business losses view of above observations, the learned PCIT issued a show cause notice dated 22/11/2024 calling upon the assessee a sessment order should not be revised on above two issues epresentative(AR) of the assessee submitted that assessment unit after due consideration of the submission of the assessee and carrying out required enquiries, the claim of depreciation on goodwill, which Prism TV P Ltd’ with the assessee contended that revisionary proceedings against assessment order cannot be initiated unless conjunctive conditions of section 263 are It was further contended that Assessing Officer had duly examined all the records at the time of assessment proceeding mind and therefore even the deeming condition 2 to section 263 are not fulfilled. The assess also filed submissions on the merit of the both the issues and Viacom 18 Media Pvt. Ltd 4 ITA No. 2591/MUM/2025 Subsequently, the learned PCIT called for the assessment records and after examination, he was of the view that the assessment order passed by the Assessing Officer was erroneous evenue, on following goodwill’ acquired on ssessment years 18 by the Assessing Officer forward of business losses view of above observations, the learned PCIT issued a show 2024 calling upon the assessee as why sessment order should not be revised on above two issues. of the assessee submitted that assessment unit after due consideration of the carrying out required enquiries, , which arose on with the assessee. It was contended that revisionary proceedings against assessment order cannot be initiated unless conjunctive conditions of section 263 are It was further contended that Assessing Officer had duly examined all the records at the time of assessment proceeding with mind and therefore even the deeming conditions not fulfilled. The assessee also filed submissions on the merit of the both the issues and Printed from counselvise.com submitted that depreciation on goodwill and carry have been allowed lawfully PCIT was however not convinced accordingly held the assessment order a prejudicial to the interest of the R setaside the order with the direction to passong a fresh assessment order after making ne Aggrieved, the assessee is an appeal before the Income Appellate Tribunal (in short the ‘Tribunal’) by way of raising grounds as reproduced above. 3. Before us the assessee filed a paper book containing pages 1 319. In the grounds r section 263 by the ld PCIT, on merit. As the facts related to both the issues are interconnected, therefore, firstly we decide legal ground and then ground on merit. 3.1 The facts qua the issue in dispute of depreciation on goodwill are that during the year under consideration the assessee claimed depreciation on goodwill and intangible assets having details as under: Sr. No Particulars i. Depreciation on goodwill on acquisition of Studio 18 (a division of Network 18 Media & Investments Pvt. Ltd.) in A Y 2008 Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 submitted that depreciation on goodwill and carry have been allowed lawfully by the Assessing Officer. The learned ver not convinced with the reply of the ngly held the assessment order as erroneous insofar as udicial to the interest of the Revenue on both the issues and setaside the order with the direction to the Assessing Officer a fresh assessment order after making necessary inquiries. Aggrieved, the assessee is an appeal before the Income Appellate Tribunal (in short the ‘Tribunal’) by way of raising grounds as reproduced above. Before us the assessee filed a paper book containing pages 1 319. In the grounds raised the assessee has challenged by the ld PCIT, both on legal ground as facts related to both the issues are interconnected, firstly we decide legal ground and then ground on merit. the issue in dispute of depreciation on goodwill are that during the year under consideration the assessee claimed depreciation on goodwill and intangible assets having details as Amount (Rs.) Remarks by the Assessee Depreciation on goodwill on acquisition of Studio 18 (a division of Network 18 Media & Investments Pvt. Ltd.) in A Y 2008- 09 85,655 Hon’ble Mumbai ITAT allowed claim of depreciation in the first year itself, i.e. AY 2008- 09 Viacom 18 Media Pvt. Ltd 5 ITA No. 2591/MUM/2025 submitted that depreciation on goodwill and carry forward losses by the Assessing Officer. The learned reply of the assessee. He s erroneous insofar as evenue on both the issues and the Assessing Officer for cessary inquiries. Aggrieved, the assessee is an appeal before the Income-tax Appellate Tribunal (in short the ‘Tribunal’) by way of raising Before us the assessee filed a paper book containing pages 1- aised the assessee has challenged onvoking of on legal ground as well as ground facts related to both the issues are interconnected, firstly we decide legal ground and then ground on merit. the issue in dispute of depreciation on goodwill are that during the year under consideration the assessee claimed depreciation on goodwill and intangible assets having details as by the Assessee Hon’ble Mumbai ITAT allowed claim of depreciation in the first year Printed from counselvise.com ii. Depreciation on goodwill resulting on account of amalgamation of Prism TV Pvt. Ltd. ('Prism TV') into Viacom 18 in AY 2016-17 iii. Depreciation on Intangible Rights Platform) Total 3.2 The learned counsel for the assessee referred to paperbook page 1, which is a copy of notice under section 143(2) of the submitted that return of income was selected for the scrutiny for verification of the various issues including one of the issues as depreciation claim of the assessee. The learned counsel, further referre which is a copy of noti submitted that the Assessing Officer v page-18) asked the detail counsel submitted that assessee raised by the Assessing Officer. He referred to copy of the reply filed by the assessee which is available on paperbook page with notes to financial statement available on paperbook page 289. Further the learned counsel referred to by the Assessing Officer pages 33 to 37 and submitted that the Assessing Officer specifically asked the assessee Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 Depreciation on goodwill resulting on account of amalgamation of Prism TV Pvt. Ltd. ('Prism TV') into Viacom 18 in AY 1,87,75,81,932 Goodwill recognized in view of the scheme of amalgamation approved by Hon’ble Bombay High Court. No Goodwill was existed in the books of amalgamating company and hence, the Goodwill had purely arisen on amalgamation, eligible for depreciation upto 1.4.2021. Depreciation on ntangible Rights (Voot 7,55,90,173 There is no Goodwill in this asset. This is an intangible asset capitalized in AY 2017-18 on which depreciation was never disputed by the Department. 195,32,57,760 learned counsel for the assessee referred to paperbook copy of notice under section 143(2) of the submitted that return of income was selected for the scrutiny for verification of the various issues including one of the issues as of the assessee. The learned counsel, further referred to paperbook page which is a copy of notice under section 142(1) of the A ted that the Assessing Officer vide query No. 18) asked the details of claim of depreciation. The learned counsel submitted that assessee duly responded to the queries raised by the Assessing Officer. He referred to copy of the reply filed by the assessee which is available on paperbook page with notes to financial statement available on paperbook page 289. Further the learned counsel referred to a show cause notice issued by the Assessing Officer, a copy of which is available on paperbook 33 to 37 and submitted that the Assessing Officer specifically the assessee to support claim of depreciation Viacom 18 Media Pvt. Ltd 6 ITA No. 2591/MUM/2025 Goodwill recognized in view of the scheme of amalgamation approved by Hon’ble Bombay High Court. existed in the books of amalgamating company and hence, the Goodwill had purely arisen on amalgamation, eligible for depreciation upto 1.4.2021. There is no Goodwill in this asset. is an intangible asset 18 on which depreciation was never disputed by learned counsel for the assessee referred to paperbook copy of notice under section 143(2) of the Act and submitted that return of income was selected for the scrutiny for verification of the various issues including one of the issues as d to paperbook pages 16 to 22, ce under section 142(1) of the Act and ide query No. 8 (Paper Book of claim of depreciation. The learned duly responded to the queries raised by the Assessing Officer. He referred to copy of the reply filed by the assessee which is available on paperbook pages 23-32 along with notes to financial statement available on paperbook page 289. show cause notice issued available on paperbook 33 to 37 and submitted that the Assessing Officer specifically to support claim of depreciation on goodwill Printed from counselvise.com with documentary evidences. The Assessing Officer in said show cause notice also referred to large business heads of income. In the submission filed in response to cause notice, a copy of which is available o 45, the assessee provided complete details of computation of the depreciation on goodwill as well as justification for also submitted that similar claim was allowed by the faceless assessment unit in assessee’s own 19. The assessee also Bench of Income-tax Appellate Tribunal ( in short the ‘T dated 29/01/2016, goodwill on account of merger of t assessment year 2008 also filed copy of the order of the Hon’ble Bombay High Court approving the scheme of amalgamation with limited’ along with valuation report supp arising on amalgamation with the prisoner TV private limited. 3.3 The learned counsel for the (three) of the assessment order and submitted that Assessing Officer after due examination/verificat assessee and after considering the judicial decisions accepted the claim of depreciation on goodwill by way of express finding. Regarding the quantum of business loss to be carried forward, the learned counsel submitted that the Ass Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 with documentary evidences. The Assessing Officer in said show cause notice also referred to large business loss set off against other heads of income. In the submission filed in response to cause notice, a copy of which is available on paperbook page 38 to 45, the assessee provided complete details of computation of the depreciation on goodwill as well as justification for its also submitted that similar claim was allowed by the faceless assessment unit in assessee’s own case for assessment year 2018 19. The assessee also filed a copy of the order of the Coordinate tax Appellate Tribunal ( in short the ‘T wherein the claim of depreciation on the goodwill on account of merger of the ‘studio 18 assessment year 2008-09 was allowed to the assessee. The assessee also filed copy of the order of the Hon’ble Bombay High Court approving the scheme of amalgamation with ‘Prism TV private along with valuation report supporting value of the goodwill arising on amalgamation with the prisoner TV private limited. The learned counsel for the assessee referred to para of the assessment order and submitted that Assessing Officer after due examination/verification of the claim of the assessee and after considering the judicial decisions accepted the claim of depreciation on goodwill by way of express finding. Regarding the quantum of business loss to be carried forward, the learned counsel submitted that the Assessing Officer has duly Viacom 18 Media Pvt. Ltd 7 ITA No. 2591/MUM/2025 with documentary evidences. The Assessing Officer in said show set off against other heads of income. In the submission filed in response to the show n paperbook page 38 to 45, the assessee provided complete details of computation of the its claim. It was also submitted that similar claim was allowed by the faceless case for assessment year 2018- filed a copy of the order of the Coordinate tax Appellate Tribunal ( in short the ‘Tribunal’) wherein the claim of depreciation on the studio 18’ division in 09 was allowed to the assessee. The assessee also filed copy of the order of the Hon’ble Bombay High Court Prism TV private orting value of the goodwill arising on amalgamation with the prisoner TV private limited. referred to paragraph 3 of the assessment order and submitted that Assessing ion of the claim of the assessee and after considering the judicial decisions accepted the claim of depreciation on goodwill by way of express finding. Regarding the quantum of business loss to be carried forward, the essing Officer has duly Printed from counselvise.com verified the brought forward losses adjusted against profits of earlier years and after verification only he computed the losses of ₹1022,35,12,612/- to be carried forward to next assessment year. 4. The learned Departmental Repres hand submitted that the Assessing Officer has not inquiries which he ought to have been carried out on the issues of depreciation of the goodwill as well as on the issue of carry of business losses and be erroneous insofar as prej under Explanation-2 to section 263 of the A 5. We have heard rival submission of the pa invoking Explanation assessment order to be erroneous insofar as prej interest of the Revenue. For ready reference, the said explanation as reproduced as under: [Explanation 2.-For the purposes of this section, it is hereby decla an order passed by the Assessing Officer as the case may be,] shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion 53[Chief Commissioner or Chief Commissioner or Principal] Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been made 48 (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 verified the brought forward losses adjusted against profits of earlier years and after verification only he computed the losses of to be carried forward to next assessment year. Departmental Representative (DR) hand submitted that the Assessing Officer has not inquiries which he ought to have been carried out on the issues of depreciation of the goodwill as well as on the issue of carry of business losses and therefore the assessment order is deemed to be erroneous insofar as prejudicial to the interest of the R 2 to section 263 of the Act. We have heard rival submission of the parties on the issue of xplanation -2 below section 263 of the Act, assessment order to be erroneous insofar as prej evenue. For ready reference, the said explanation as reproduced as under: For the purposes of this section, it is hereby decla an order passed by the Assessing Officer 52[or the Transfer Pricing Officer, as the case may be,] shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion [Chief Commissioner or Chief Commissioner or Principal] Commissioner the order is passed without making inquiries or verification which should 48; the order is passed allowing any relief without inquiring into the claim; the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Viacom 18 Media Pvt. Ltd 8 ITA No. 2591/MUM/2025 verified the brought forward losses adjusted against profits of earlier years and after verification only he computed the losses of to be carried forward to next assessment year. (DR) on the other hand submitted that the Assessing Officer has not carried out the inquiries which he ought to have been carried out on the issues of depreciation of the goodwill as well as on the issue of carry forward therefore the assessment order is deemed to udicial to the interest of the Revenue rties on the issue of ction 263 of the Act, deeming the assessment order to be erroneous insofar as prejudicial to the evenue. For ready reference, the said explanation as For the purposes of this section, it is hereby declared that [or the Transfer Pricing Officer, as the case may be,] shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal [Chief Commissioner or Chief Commissioner or Principal] Commissioner the order is passed without making inquiries or verification which should the order is passed allowing any relief without inquiring into the claim; the order has not been made in accordance with any order, direction or the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Printed from counselvise.com Supreme Court in the case of the assessee or any other 5.1 On plain reading of the above provision (a) and (b) specify that inquiries, which he ought to have carried out in the facts and circumstances of the case be erroneous insofar as prejudicial to the interest of the revenue. Therefore for invoking of the deeming E examine whether the Assessing Officer had which he ought to have carried out i of the case. As far as the first issue of depreciation on goodwill is concerned, the Assessing Officer in his first notice under section 142(1) of the dated 19/08/2021(PB “8. With respect to provide the following details: 1. Detail of the asset/block ii) Opening WDV iii) Addition and deletion during the year iv) Depreciation charged on assets/block T v) Detail of additional depreciation claimed, if justification for the same v) Date of purchase and date of put to use for the assets acquired during the year along with documentary Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 Supreme Court in the case of the assessee or any other reading of the above provision, we find that (a) and (b) specify that if Assessing Officer fails in carrying out the , which he ought to have carried out in the facts and circumstances of the case, then the assessment order is deemed to be erroneous insofar as prejudicial to the interest of the revenue. re for invoking of the deeming Explanation hether the Assessing Officer had carried out the inquiries which he ought to have carried out in the facts and circumstances As far as the first issue of depreciation on goodwill is concerned, the Assessing Officer in his first notice under section 142(1) of the dated 19/08/2021(PB-18) raised following query: With respect to depreciation claimed during the year, kindly provide the following details: 1. Detail of the asset/block ii) Opening WDV iii) Addition and deletion during the year iv) Depreciation charged on assets/block T v) Detail of additional depreciation claimed, if any along with the justification for the same v) Date of purchase and date of put to use for the assets acquired during the year along with documentary evidence” Viacom 18 Media Pvt. Ltd 9 ITA No. 2591/MUM/2025 Supreme Court in the case of the assessee or any other person.] , we find that clauses in carrying out the , which he ought to have carried out in the facts and nt order is deemed to be erroneous insofar as prejudicial to the interest of the revenue. xplanation, we have to carried out the inquiries n the facts and circumstances As far as the first issue of depreciation on goodwill is concerned, the Assessing Officer in his first notice under section 142(1) of the Act depreciation claimed during the year, kindly any along with the v) Date of purchase and date of put to use for the assets acquired Printed from counselvise.com 5.2 In response to above query, the assessee 03/09/2021 filed submission relevant part of which is reproduced as under: “8. Depreciation claimed during the year The details with respect to fixed assets, opening WDV, additions and deletions made during the year and depreciation charged on the assets are enclosed as Annexure 3. The Company has not claimed any additional depreciation during 5.3 Along with the above reply chart as per the provisions of the in A as how in assessment year 2016 introduced goodwill in its books of accounts and claimed depreciation thereon. The relevant part of the note appended to the depreciation chart is reproduced as under: “3. In AY 2016 August 2016 Prisrn TV Private Limited has merged with Viacom18 Media Private Limited with effect from 1 April 2015 on a going concern basis. As per the said Order, the Company has paid a consideration of Rs 19,340,040,368 Private Limited. Out of the said consideration of Rs 19,340,040,368, Rs 1780,22,58,316 was paid towards various intangibles (customer relationship, skilled workforce, business contracts, know customers, distributors/suppliers, rights, processes, marketing and distribution strategies, commercial rights, intellectual property rights, licenses, permits, trademarks, copyrights, patents, quotas, approvals, lease. tenancy rights, perm and various other rights, title, interest, certificates, registrations under various legislations, contracts, agreements, consents) acquired by the Company (reflected as goodwill in the books of the Company). The @ 25% on the written down value of the aforesaid goodwill based on the following decisions:  CIT, Kolkata v. Smifs Securities (24 taxmann.com 222(SC)] Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 response to above query, the assessee through reply 03/09/2021 filed submission(PB-27) before the Assessing Officer, which is reproduced as under: 8. Depreciation claimed during the year The details with respect to fixed assets, opening WDV, additions and deletions made during the year and depreciation charged on assets are enclosed as Annexure 3. The Company has not claimed any additional depreciation during AY 2019-20. with the above reply, the assessee enclosed depreciation s per the provisions of the in Act along with a note specifying in assessment year 2016-17 for the first time the assessee introduced goodwill in its books of accounts and claimed depreciation thereon. The relevant part of the note appended to the depreciation chart is reproduced as under: 3. In AY 2016-17, as per the Bombay High Court Order dated 12 August 2016 Prisrn TV Private Limited has merged with Viacom18 Media Private Limited with effect from 1 April 2015 on a going concern basis. As per the said Order, the Company has paid a consideration of Rs 19,340,040,368 for the acquisition of Prism TV Private Limited. Out of the said consideration of Rs 19,340,040,368, Rs 1780,22,58,316 was paid towards various intangibles (customer relationship, skilled workforce, business contracts, know- how, business information, trademarks, list of customers, distributors/suppliers, rights, processes, marketing and distribution strategies, commercial rights, intellectual property rights, licenses, permits, trademarks, copyrights, patents, quotas, approvals, lease. tenancy rights, permissions, incentives, grants and various other rights, title, interest, certificates, registrations under various legislations, contracts, agreements, consents) acquired by the Company (reflected as goodwill in the books of the Company). The assessee submits that it is eligible for depreciation @ 25% on the written down value of the aforesaid goodwill based on the following decisions: CIT, Kolkata v. Smifs Securities (24 taxmann.com 222(SC)] Viacom 18 Media Pvt. Ltd 10 ITA No. 2591/MUM/2025 through reply dated before the Assessing Officer, The details with respect to fixed assets, opening WDV, additions and deletions made during the year and depreciation charged on assets are enclosed as Annexure 3. The Company has not 20.” the assessee enclosed depreciation ct along with a note specifying 17 for the first time the assessee introduced goodwill in its books of accounts and claimed depreciation thereon. The relevant part of the note appended to the Bombay High Court Order dated 12 August 2016 Prisrn TV Private Limited has merged with Viacom18 Media Private Limited with effect from 1 April 2015 on a going concern basis. As per the said Order, the Company has paid a for the acquisition of Prism TV Private Limited. Out of the said consideration of Rs 19,340,040,368, Rs 1780,22,58,316 was paid towards various intangibles (customer relationship, skilled workforce, business emarks, list of customers, distributors/suppliers, rights, processes, marketing and distribution strategies, commercial rights, intellectual property rights, licenses, permits, trademarks, copyrights, patents, quotas, issions, incentives, grants and various other rights, title, interest, certificates, registrations under various legislations, contracts, agreements, consents) acquired by the Company (reflected as goodwill in the books of the s that it is eligible for depreciation @ 25% on the written down value of the aforesaid goodwill based CIT, Kolkata v. Smifs Securities (24 taxmann.com 222(SC)] Printed from counselvise.com  Areva T & D India Ltd vs DCIT ((2012) 345 ITR 421 (Delhi High Cour  Viacom 18 vs ACIT (ITA No. 7336/Mum/2012) [Mumbai Tribunal]  B. Raveendran Pillai vs CIT ((2010) 194 Taxman 477 (Kerala HC)]  CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd (2011) 198 TAXMAN 104 (Delhi HC)  CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd [ SOT 171 (Delhi Tribunal))  Skyline Caterers (P.) Ltd. vs. ITO ((2008) 20 SOT 266 (Mumbai Tribunal)]  Bosch Ltd. vs. CIT (2009 Tribunal))  Kotak Forex Brokerage Ltd. vs. ACIT ((2009) (33 SOT 237) (Mumbai Tribunal)]  A.P. Paper Mills Ltd. vs. ACIT ((2010) 128 TTJ 596 (Hyderabad Tribunal)]2  Mylan Laboratories Limited vs. Dy. CIT 16(2) [ITA No. 2335/Hyd./2018] (Hyderabad Tribunal) 5.4 Thereafter, again the Assessing Officer issued further query on the issue of depreciation o dated 17/09/2022 (PB under: “1. Deprecation claimed during the year: There is a huge addition of Rs. 13,00,40,337/ machinery for a period of 180 days or 6,41,38,569/ days addition of Rs. 3,60,56,776/ daysor more and addition of Rs. 1,08,92,052/ period of less than 180 days. Add furniture and Fixture for a period of 180 days or more and addition of Rs.7,58,570/ less than 180 days. Please provide documentary evidence/ proof of addition, Please provide details of intangible rights goodwill with in absence of documentary evidences depreciation claimed may be disallowed. Please give your explanation. Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 Areva T & D India Ltd vs DCIT ((2012) 345 ITR 421 (Delhi High Court) Viacom 18 vs ACIT (ITA No. 7336/Mum/2012) [Mumbai Tribunal] B. Raveendran Pillai vs CIT ((2010) 194 Taxman 477 (Kerala HC)] CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd (2011) 198 TAXMAN 104 (Delhi HC) CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd [ SOT 171 (Delhi Tribunal)) Skyline Caterers (P.) Ltd. vs. ITO ((2008) 20 SOT 266 (Mumbai Tribunal)] Bosch Ltd. vs. CIT (2009-TIOL-736-ITAT-Bang (Bangalore Tribunal)) Kotak Forex Brokerage Ltd. vs. ACIT ((2009) (33 SOT 237) (Mumbai Tribunal)] Paper Mills Ltd. vs. ACIT ((2010) 128 TTJ 596 (Hyderabad Tribunal)]2 Mylan Laboratories Limited vs. Dy. CIT 16(2) [ITA No. 2335/Hyd./2018] (Hyderabad Tribunal) , again the Assessing Officer issued further query on the issue of depreciation of the goodwill in his show cause notice dated 17/09/2022 (PB-34), relevant part of which is reproduced as 1. Deprecation claimed during the year:- There is a huge addition of Rs. 13,00,40,337/-, In plant and machinery for a period of 180 days or more and addition of Rs. 6,41,38,569/- in plant and machinery for a period of less than 180 days addition of Rs. 3,60,56,776/- in Building for a period of 180 daysor more and addition of Rs. 1,08,92,052/- in Building for a period of less than 180 days. Addition of Rs. 33,71,323/ furniture and Fixture for a period of 180 days or more and addition of Rs.7,58,570/- in furniture and fixture for a period of less than 180 days. Please provide documentary evidence/ proof of addition, Please provide details of intangible rights goodwill with in absence of documentary evidences depreciation claimed may be disallowed. Please give your explanation. Viacom 18 Media Pvt. Ltd 11 ITA No. 2591/MUM/2025 Areva T & D India Ltd vs DCIT ((2012) 345 ITR 421 (Delhi Viacom 18 vs ACIT (ITA No. 7336/Mum/2012) [Mumbai B. Raveendran Pillai vs CIT ((2010) 194 Taxman 477 CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd (2011) 198 CIT vs. Hindustan Coca Cola Beverages Pvt. Ltd [(2009) 34 Skyline Caterers (P.) Ltd. vs. ITO ((2008) 20 SOT 266 Bang (Bangalore Kotak Forex Brokerage Ltd. vs. ACIT ((2009) (33 SOT 237) Paper Mills Ltd. vs. ACIT ((2010) 128 TTJ 596 Mylan Laboratories Limited vs. Dy. CIT 16(2) [ITA No. , again the Assessing Officer issued further query on f the goodwill in his show cause notice 34), relevant part of which is reproduced as , In plant and more and addition of Rs. in plant and machinery for a period of less than 180 in Building for a period of 180 in Building for a ition of Rs. 33,71,323/- in furniture and Fixture for a period of 180 days or more and in furniture and fixture for a period of less than 180 days. Please provide documentary evidence/ proof intangible rights goodwill with in absence of documentary evidences depreciation claimed may be disallowed. Please give Printed from counselvise.com 1. Large business loss set off against other head of income. As per ITR Schedule further years and as per ITR of A.Y. 2012 carried forward and setoff losses are as under: 1. As per ITR, Schedule CFL, you have shown carried forward loss of Rs. 3,29,23,489/ 2012-13 in computation of total income. Part current year to be carried forward is Rs. 35,86,04,260/ setoff losses of Rs. 1,64,64,634/ 2. As per schedule Rs. 28,23,90,284/ 2013-14 in computation of total income, part 60,14,50,061/ 3. As per ITR Schedule of Rs. 32,68,43,710/ 2014-15 in computation of total income. Part forward is Rs. 32,68,43,710/ 1,44,60,456/ 4. As per ITR Schedule carried forward losses of Rs. 53,86,79,186/ loss) whereas you have shown in ITR for the A.Y. 2015 computation of total income Part Rs. 53,86,79,186/ 5. As per ITR Schedule forward losses of Rs. 3,27,30,79,767/ in ITR for the A.Y. 2016 is Rs. 3,27,30,79,767/ 6. As per ITR Schedule forward loss of Rs.2,84,72,69,524/ ITR for the A.Y. 2017 is Rs. 2,84,72,69,524/ 7. As per ITR Schedule forward losses of Rs. 63,45,24,113/ ITR for the A.Y. 2018 Rs. 63,45,24,113/ years setoff of losses have been t amount and show carried forward and set off losses of Rs. 7,39,70,30,887/ A.Υ. 2019-20 shown Rs. 2,82,64,81,723/ Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 1. Large business loss set off against other head of income. As per ITR Schedule -CFL details of losses to be carried further years and as per ITR of A.Y. 2012-13 to A.Y. 2019 carried forward and setoff losses are as under:- 1. As per ITR, Schedule CFL, you have shown carried forward loss of Rs. 3,29,23,489/- whereas you have shown in ITR for the A.Y. 3 in computation of total income. Part-B- it, is losses of current year to be carried forward is Rs. 35,86,04,260/ setoff losses of Rs. 1,64,64,634/- 2. As per schedule -CFL you have shown carried forward loss of Rs. 28,23,90,284/- whereas you have shown in ITR for the A.Y. 14 in computation of total income, part-B it is Rs. 60,14,50,061/- after setoff of Rs. 2,87,26,469/-. 3. As per ITR Schedule-CFL you have shown carried forward loss of Rs. 32,68,43,710/- whereas you have shown in ITR for the 15 in computation of total income. Part-B, it is losses carried forward is Rs. 32,68,43,710/- after setoff of losses of Rs. 1,44,60,456/-. 4. As per ITR Schedule -CFL ITR A.Y. 2019-20 you have shown carried forward losses of Rs. 53,86,79,186/- (long term capital loss) whereas you have shown in ITR for the A.Y. 2015 computation of total income Part-B, it is losses carried forward is Rs. 53,86,79,186/- and no set off of losses during the year. 5. As per ITR Schedule-CFL (ITR-2019-20) you have shown carried forward losses of Rs. 3,27,30,79,767/- whereas you have shown in ITR for the A.Y. 2016-17 in computation of total income, part is Rs. 3,27,30,79,767/- after setoff of losses Rs. 2,86,34,759/ 6. As per ITR Schedule -CFL ITR-2019-20 you have shown carried forward loss of Rs.2,84,72,69,524/- where as you have shown in ITR for the A.Y. 2017-18 in computation of total income, Part is Rs. 2,84,72,69,524/- after setoff losses of Rs. 1,63,93,113/ 7. As per ITR Schedule-CFL ITR -2019-20, you have shown carried forward losses of Rs. 63,45,24,113/- whereas you have shown in ITR for the A.Y. 2018-19 in computation of total income part Rs. 63,45,24,113/- after setoff of losses Rs. 119148725/ years setoff of losses have been taken by you but non reduce this amount and show carried forward and set off losses of Rs. 7,39,70,30,887/- upto assessment year 2018-19 and losses for 20 shown Rs. 2,82,64,81,723/- in CFL. However, no Viacom 18 Media Pvt. Ltd 12 ITA No. 2591/MUM/2025 1. Large business loss set off against other head of income. CFL details of losses to be carried forward to 13 to A.Y. 2019-20 1. As per ITR, Schedule CFL, you have shown carried forward loss whereas you have shown in ITR for the A.Y. it, is losses of current year to be carried forward is Rs. 35,86,04,260/- after CFL you have shown carried forward loss of shown in ITR for the A.Y. B it is Rs. CFL you have shown carried forward loss whereas you have shown in ITR for the A.Y. B, it is losses carried after setoff of losses of Rs. 20 you have shown ong term capital loss) whereas you have shown in ITR for the A.Y. 2015-16 in B, it is losses carried forward is and no set off of losses during the year. shown carried whereas you have shown 17 in computation of total income, part-B it after setoff of losses Rs. 2,86,34,759/-. have shown carried where as you have shown in 18 in computation of total income, Part-B, it after setoff losses of Rs. 1,63,93,113/-. you have shown carried whereas you have shown in 19 in computation of total income part-B it is after setoff of losses Rs. 119148725/- in many aken by you but non reduce this amount and show carried forward and set off losses of Rs. 19 and losses for in CFL. However, no Printed from counselvise.com loss shown in computation of ITR 2019 provide calculation 5.5 In response to above query, the assessee file submission on the claim of the depreciation on goodwill available on paperbook page 42 reproduced as under: 6. Depreciation under Income 6.1 Depreciation on assets other than goodwill The documentary evidence/ proof of additions to fixed assets have been furnished on sample basis as Annexure 7 to the submission dated 27 September 2021. Copy of the Annexure 2 for ready reference. 6.2 Depreciation on goodwill For AY 2019 1,87,76,67,587 on consideration paid for acquisition of various intangible assets reflected as \"goodwill\" in the assessee. The break assessee is as Particulars Depreciation on goodwill resulting on account of acquisition of Studio 18 (a division of Network 18 Media & Investments 09 Depreciation on goodwill resulting on account of amalgamation of Prism TV Pvt. Ltd. (‘Prism TV’) into Viacom 18 in AY 2016 Total Note A In AY 2008-09, the Company had acquired the Studio 18 division of Network 18 Media & Investments Private Limited (formerly Network 18 Fincap Limited) under the Business Transfer Agreement dated 11 September 2007 on a going concern basis. As per the said ag Rs 4,13,53,652 for the Net Current Assets aggregating to Rs 3,44,00,309 and Rs 69,53,343 (reflected as goodwill in the books of the Company) was paid towards various rights acquired under the said agreement Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 loss shown in computation of ITR 2019-20. Please explain and provide calculation accordingly.” response to above query, the assessee file submission on the claim of the depreciation on goodwill available on paperbook page 42-44, relevant part of which is er: 6. Depreciation under Income-tax Act 6.1 Depreciation on assets other than goodwill The documentary evidence/ proof of additions to fixed assets have been furnished on sample basis as Annexure 7 to the submission dated 27 September 2021. Copy of the same is reattached as Annexure 2 for ready reference. 6.2 Depreciation on goodwill For AY 2019-20, the assessee has claimed depreciation of Rs. 1,87,76,67,587 on consideration paid for acquisition of various intangible assets reflected as \"goodwill\" in the books of the assessee. The break-up of depreciation on goodwill claimed by the as under: Amount (Rs.) Depreciation on goodwill resulting on account of acquisition of Studio 18 (a division of Network 18 Media & Investments Pvt. Ltd.) in AY 2008- 85,655 Depreciation on goodwill resulting on account of amalgamation of Prism TV Pvt. Ltd. (‘Prism TV’) into Viacom 18 in AY 2016-17 1,87,75,81,932 1,87,76,67,587 09, the Company had acquired the Studio 18 division of Network 18 Media & Investments Private Limited (formerly Network 18 Fincap Limited) under the Business Transfer Agreement dated 11 September 2007 on a going concern basis. As per the said agreement, the Company has paid a consideration of Rs 4,13,53,652 for the Net Current Assets aggregating to Rs 3,44,00,309 and Rs 69,53,343 (reflected as goodwill in the books of the Company) was paid towards various rights acquired under the said agreement including the business contracts (distribution, Viacom 18 Media Pvt. Ltd 13 ITA No. 2591/MUM/2025 ase explain and response to above query, the assessee filed a detailed submission on the claim of the depreciation on goodwill, which is 44, relevant part of which is The documentary evidence/ proof of additions to fixed assets have been furnished on sample basis as Annexure 7 to the submission same is reattached as 20, the assessee has claimed depreciation of Rs. 1,87,76,67,587 on consideration paid for acquisition of various books of the depreciation on goodwill claimed by the Remarks Refer note A 1,87,75,81,932 Refer note B 1,87,76,67,587 09, the Company had acquired the Studio 18 division of Network 18 Media & Investments Private Limited (formerly Network 18 Fincap Limited) under the Business Transfer Agreement dated 11 September 2007 on a going concern basis. As reement, the Company has paid a consideration of Rs 4,13,53,652 for the Net Current Assets aggregating to Rs 3,44,00,309 and Rs 69,53,343 (reflected as goodwill in the books of the Company) was paid towards various rights acquired under including the business contracts (distribution, Printed from counselvise.com sub-distribution, production, etc.) brand name of Studio 18 and the related intellectual property rights, right to do business in the name of Studio 18. The Company had claimed depreciation on this at 25% on written down value. The assessee humbly submit that the issue relating to allowability of depreciation on goodwill resulting on account of acquisition of Studio 18 is already decided in favour of the assessee by the Hon'ble Mumbai Tribunal in the assessee's own case for AY 2008 depreciation on such goodwill). A copy of the said order is attached herewith as Annexure 3. Further, we understand that the Department has accepted the order of the Hon'ble Mumbai Tribunal and not pref High Court. Accordingly, the assessee submits that the aforesaid issue is now settled and hence deprecation of Rs.85,655/ be allowed to the assessee arising on account of acquisition of Studio 18. Note B In AY 2016-17, as per the Hon'ble Bombay High Court Order dated 12 August 2016 Prism TV Private Limited has merged with Viacom18 Media Private Limited with effect from 1 April 2015 on a going concern basis. The merger was not a tax neutral merger as the consideration i.e. shares were issued to the parent company of Prism TV. As per the said High Court order, the Company has paid a consideration of Rs 19,340,040,368 for the acquisition of Prism TV Private Limited by issue of shares at fair value. Out of the sa consideration of Rs 19,340,040,368, an amount of Rs 1780,22,58,316 was paid towards various intangibles (customer relationship, skilled workforce, business contracts, know business information, trademarks, list of customers, distributors/suppliers, distribution strategies, commercial rights, intellectual property rights, licenses, permits, trademarks, copyrights, patents, quotas, approvals, lease, tenancy rights, permissions, incentives, grants and various other righ under various legislations, contracts, agreements, consents) acquired by the Company (reflected as goodwill in the books) on which depreciation @ 25% was claimed as part of block of intangible assets. The as not recorded in the books of Prism TV and no depreciation was claimed thereon by Prism TV (i.e. amalgamating company). Thus, goodwill, a capital right comprising of various intangible acquired by amalgamated com in the books of Viacom 18 (i.e. amalgamated company). Viacom 18 has acquired such goodwill consisting of various intangibles from Prism TV and separately discharged consideration for the same, it Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 distribution, production, etc.) brand name of Studio 18 and the related intellectual property rights, right to do business in the name of Studio 18. The Company had claimed depreciation on this written down value. The assessee humbly submit that the issue relating to allowability of depreciation on goodwill resulting on account of acquisition of Studio 18 is already decided in favour of the assessee by the Hon'ble Mumbai Tribunal in the s own case for AY 2008-09 (the first year of claim of depreciation on such goodwill). A copy of the said order is attached herewith as Annexure 3. Further, we understand that the Department has accepted the order of the Hon'ble Mumbai Tribunal and not preferred an appeal before the Hon'ble Bombay High Court. Accordingly, the assessee submits that the aforesaid issue is now settled and hence deprecation of Rs.85,655/ be allowed to the assessee arising on account of acquisition of 17, as per the Hon'ble Bombay High Court Order dated 12 August 2016 Prism TV Private Limited has merged with Viacom18 Media Private Limited with effect from 1 April 2015 on a going concern basis. The merger was not a tax neutral merger as ideration i.e. shares were issued to the parent company of Prism TV. As per the said High Court order, the Company has paid a consideration of Rs 19,340,040,368 for the acquisition of Prism TV Private Limited by issue of shares at fair value. Out of the sa consideration of Rs 19,340,040,368, an amount of Rs 1780,22,58,316 was paid towards various intangibles (customer relationship, skilled workforce, business contracts, know business information, trademarks, list of customers, distributors/suppliers, rights, processes, marketing and distribution strategies, commercial rights, intellectual property rights, licenses, permits, trademarks, copyrights, patents, quotas, approvals, lease, tenancy rights, permissions, incentives, grants and various other rights, title, interest, certificates, registrations under various legislations, contracts, agreements, consents) acquired by the Company (reflected as goodwill in the books) on which depreciation @ 25% was claimed as part of block of intangible assets. The assessee submits that said goodwill was not recorded in the books of Prism TV and no depreciation was claimed thereon by Prism TV (i.e. amalgamating company). Thus, goodwill, a capital right comprising of various intangible acquired by amalgamated company, is recorded for the first time in the books of Viacom 18 (i.e. amalgamated company). Viacom 18 has acquired such goodwill consisting of various intangibles from Prism TV and separately discharged consideration for the same, it Viacom 18 Media Pvt. Ltd 14 ITA No. 2591/MUM/2025 distribution, production, etc.) brand name of Studio 18 and the related intellectual property rights, right to do business in the name of Studio 18. The Company had claimed depreciation on this written down value. The assessee humbly submit that the issue relating to allowability of depreciation on goodwill resulting on account of acquisition of Studio 18 is already decided in favour of the assessee by the Hon'ble Mumbai Tribunal in the 09 (the first year of claim of depreciation on such goodwill). A copy of the said order is attached herewith as Annexure 3. Further, we understand that the Department has accepted the order of the Hon'ble Mumbai erred an appeal before the Hon'ble Bombay High Court. Accordingly, the assessee submits that the aforesaid issue is now settled and hence deprecation of Rs.85,655/- should be allowed to the assessee arising on account of acquisition of 17, as per the Hon'ble Bombay High Court Order dated 12 August 2016 Prism TV Private Limited has merged with Viacom18 Media Private Limited with effect from 1 April 2015 on a going concern basis. The merger was not a tax neutral merger as ideration i.e. shares were issued to the parent company of Prism TV. As per the said High Court order, the Company has paid a consideration of Rs 19,340,040,368 for the acquisition of Prism TV Private Limited by issue of shares at fair value. Out of the said consideration of Rs 19,340,040,368, an amount of Rs 1780,22,58,316 was paid towards various intangibles (customer relationship, skilled workforce, business contracts, know-how, business information, trademarks, list of customers, rights, processes, marketing and distribution strategies, commercial rights, intellectual property rights, licenses, permits, trademarks, copyrights, patents, quotas, approvals, lease, tenancy rights, permissions, incentives, grants ts, title, interest, certificates, registrations under various legislations, contracts, agreements, consents) acquired by the Company (reflected as goodwill in the books) on which depreciation @ 25% was claimed as part of block of sessee submits that said goodwill was not recorded in the books of Prism TV and no depreciation was claimed thereon by Prism TV (i.e. amalgamating company). Thus, goodwill, a capital right comprising of various intangible rights pany, is recorded for the first time in the books of Viacom 18 (i.e. amalgamated company). Viacom 18 has acquired such goodwill consisting of various intangibles from Prism TV and separately discharged consideration for the same, it Printed from counselvise.com has recorded the same i 14 on the basis of fair value determined by independent valuer and consequently, claimed depreciation in accordance with provisions of the Act read with decision of Hon'ble Supreme Court in case of Smifs Securities L order of the Hon'ble Bombay High Court dated 12 August 2016 approving the merger of Prism TV into Viacom 18 with effect from 1|April 2015 is attached herewith as Annexure 4. A copy of the valuation report obtained from Er Merchant Banking Services Pvt. Ltd. dated 2 February 2016 determining the fair exchange ratio of shares in relation to merger of Prism TV Pvt. Ltd. into Viacom 18 is attached herewith as Annexure 5. Further, we also attach herewith as Annexure extract (as the size is bulky) of copy of report dated 16 September 2016 obtained by Viacom 18 from KPMG India Pvt. Ltd. in connection with purchase price allocation on account of acquisition of Prism TV as at 1 April 2015. The assessee humbly submit of depreciation on goodwill resulting on account of acquisition of Prism TV is decided in favour of the assessee by the Facelsss Assessment Unit in the assessee's own case for AY 2018 copy of the said order is Accordingly, the assessee submits that the deprecation of Rs. 1,87,75,81,932/ account of acquisition 5.6 In this submission, the assessee explained depreciation on goodwill comprised of ₹85,655/-on goodwill resulting on account of acquisition of studio 18 in assessment year 2008 Secondly, depreciation amounting to resulting on account of assessee in assessment year 2016 Regarding the second item the assessee also enclosed copy of the order of the Hon’ble Bombay High Court dat approving the merger of Prism TV Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 has recorded the same in accordance with Accounting Standard 14 on the basis of fair value determined by independent valuer and consequently, claimed depreciation in accordance with provisions of the Act read with decision of Hon'ble Supreme Court in case of Smifs Securities Ltd (24 taxmann.com 222). A copy of order of the Hon'ble Bombay High Court dated 12 August 2016 approving the merger of Prism TV into Viacom 18 with effect from 1|April 2015 is attached herewith as Annexure 4. A copy of the valuation report obtained from Ernst & Young Merchant Banking Services Pvt. Ltd. dated 2 February 2016 determining the fair exchange ratio of shares in relation to merger of Prism TV Pvt. Ltd. into Viacom 18 is attached herewith as Annexure 5. Further, we also attach herewith as Annexure extract (as the size is bulky) of copy of report dated 16 September 2016 obtained by Viacom 18 from KPMG India Pvt. Ltd. in connection with purchase price allocation on account of acquisition of Prism TV as at 1 April 2015. The assessee humbly submit that the issue relating to allowability of depreciation on goodwill resulting on account of acquisition of Prism TV is decided in favour of the assessee by the Facelsss Assessment Unit in the assessee's own case for AY 2018 copy of the said order is attached herewith as Annexure 7. Accordingly, the assessee submits that the deprecation of Rs. 1,87,75,81,932/- should be allowed to the assessee arising on account of acquisition of Prism TV. this submission, the assessee explained depreciation on of two items, firstly, depreciation amounting to on goodwill resulting on account of acquisition of studio 18 in assessment year 2008-09 with a complete note separately. Secondly, depreciation amounting to ₹1,87,75,81,932/ resulting on account of amalgamation of ‘Prism TV Pvt assessee in assessment year 2016-17 along with a detailed note. Regarding the second item the assessee also enclosed copy of the order of the Hon’ble Bombay High Court dated 12/08/2016 approving the merger of Prism TV Pvt Ltd into the assessee with Viacom 18 Media Pvt. Ltd 15 ITA No. 2591/MUM/2025 n accordance with Accounting Standard - 14 on the basis of fair value determined by independent valuer and consequently, claimed depreciation in accordance with provisions of the Act read with decision of Hon'ble Supreme Court td (24 taxmann.com 222). A copy of order of the Hon'ble Bombay High Court dated 12 August 2016 approving the merger of Prism TV into Viacom 18 with effect from nst & Young Merchant Banking Services Pvt. Ltd. dated 2 February 2016 determining the fair exchange ratio of shares in relation to merger of Prism TV Pvt. Ltd. into Viacom 18 is attached herewith as Annexure 5. Further, we also attach herewith as Annexure 6, an extract (as the size is bulky) of copy of report dated 16 September 2016 obtained by Viacom 18 from KPMG India Pvt. Ltd. in connection with purchase price allocation on account of acquisition that the issue relating to allowability of depreciation on goodwill resulting on account of acquisition of Prism TV is decided in favour of the assessee by the Facelsss Assessment Unit in the assessee's own case for AY 2018-19. A attached herewith as Annexure 7. Accordingly, the assessee submits that the deprecation of Rs. should be allowed to the assessee arising on this submission, the assessee explained depreciation on two items, firstly, depreciation amounting to on goodwill resulting on account of acquisition of studio 09 with a complete note separately. 932/-on goodwill amalgamation of ‘Prism TV Pvt Ltd’ with the 17 along with a detailed note. Regarding the second item the assessee also enclosed copy of the ed 12/08/2016 into the assessee with Printed from counselvise.com effect from 01/04/2015; copy of valuation report obtained from Ernst & Young merchant banking services Private Limited dated 02/02/2016 determining the fair exchange ratio of sha relation to merger and copy of the assessment order for assessment year 2018-19 i.e. immediately prior assessment year, wherein the Assessing Officer allowed the claim of depreciation on goodwill arising from merger of Prism TV. 5.7 After thorough keeping in view such depreciation allowed by the Assessing Officer in immediately preceding assessment year i.e. AY 2018 Assessing Officer accepted the claim of the assessee with the following observation in the assessment order: “3. In this case, assessee has claimed substantial depreciation/ and claimed additional depreciation. For verifying issue questionnaire and show cause notice issue to assessee as per above time line mentioned in above table. Vide 19.09.2022, assessee company has submitted documentary evidence of addition to fixed assets in Annexure dated 19.09.2022. On examination of reply of the assessee and on perusal of Annexure found considerable and issue of depreciation claimed is examined and 5.8 Similarly on the issue of business forward also the Assessing Officer after verification accepted the claim of the assessee observing as under: 4. During the assessment proceedings, it is found that the assessee has substantial income business loss and set same against income under the other heads. On this issue assessee vide reply dated 19.09.2022, submitted that \" Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 effect from 01/04/2015; copy of valuation report obtained from Ernst & Young merchant banking services Private Limited dated 02/02/2016 determining the fair exchange ratio of sha relation to merger and copy of the assessment order for assessment 19 i.e. immediately prior assessment year, wherein the Assessing Officer allowed the claim of depreciation on goodwill arising from merger of Prism TV. After thorough examination of the claim of the assessee and keeping in view such depreciation allowed by the Assessing Officer in immediately preceding assessment year i.e. AY 2018 Assessing Officer accepted the claim of the assessee with the n in the assessment order: In this case, assessee has claimed substantial depreciation/ and claimed additional depreciation. For verifying issue questionnaire and show cause notice issue to assessee as per above time line mentioned in above table. Vide reply dated 19.09.2022, assessee company has submitted documentary evidence of addition to fixed assets in Annexure -2 of its reply dated 19.09.2022. On examination of reply of the assessee and on perusal of Annexure-2, submission of assessee company is ound considerable and issue of depreciation claimed is examined and found correct.” on the issue of business losses set off and carry forward also the Assessing Officer after verification accepted the claim of the assessee observing as under: 4. During the assessment proceedings, it is found that the assessee has substantial income business loss and set same against income under the other heads. On this issue assessee vide reply dated 19.09.2022, submitted that \" Viacom 18 Media Pvt. Ltd 16 ITA No. 2591/MUM/2025 effect from 01/04/2015; copy of valuation report obtained from Ernst & Young merchant banking services Private Limited dated 02/02/2016 determining the fair exchange ratio of shares in relation to merger and copy of the assessment order for assessment 19 i.e. immediately prior assessment year, wherein the Assessing Officer allowed the claim of depreciation on goodwill examination of the claim of the assessee and keeping in view such depreciation allowed by the Assessing Officer in immediately preceding assessment year i.e. AY 2018-19, the Assessing Officer accepted the claim of the assessee with the In this case, assessee has claimed substantial depreciation/ and claimed additional depreciation. For verifying issue questionnaire and show cause notice issue to assessee as per reply dated 19.09.2022, assessee company has submitted documentary 2 of its reply dated 19.09.2022. On examination of reply of the assessee and 2, submission of assessee company is ound considerable and issue of depreciation claimed is losses set off and carry forward also the Assessing Officer after verification accepted the 4. During the assessment proceedings, it is found that the assessee has substantial income business loss and set-off the same against income under the other heads. On this issue assessee vide reply dated 19.09.2022, submitted that \" Printed from counselvise.com The assessee humbly su 6 for the year under consideration are losses remaining after set of loses claimed in earlier years. The assessee humbly submit that profits of A.Y 2010 amounting to R.s 3,03,62,15,13 were set off against losses of A.Y. 2009 14: Assessment year 2010-11 2011-12 2015-16 Total profits Less: losses of following years set off against above profits 2009-10 2012-13 2013-14 Total losses set off After setoff of taxable profits the losses remaining for AY 2009 10, A.Y. 2012 are carried forward to subsequent year: AY 2009-10 2012-13 2013-14 Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 The assessee humbly submit that the losses shown in form ITR 6 for the year under consideration are losses remaining after set of loses claimed in earlier years. The assessee humbly submit that profits of A.Y 2010-11, A.Y. 2011-12 and A.Y. 2015 amounting to R.s 3,03,62,15,139/- (refer the break up below) were set off against losses of A.Y. 2009-10, 2012- 13 and Assessment year Profits/ (loss) for the year 10,49,98.521/- 92.51,51.908/- 200,60.64,710/- 3,03,62,15,139/- losses of following years set off against above profits (2,39,14,74,491/-) (32,56,80,871) (31,90.59,777) Total losses set off 3.03.62,15,139/- After setoff of taxable profits the losses remaining for AY 2009 10, A.Y. 2012-13 and AY 2013- 14 is as under and the same are carried forward to subsequent year: Total losses as per ITR (A) Losses set off as above (B) Net losses available for carry forward (A-B) to subsequent AY 2,39.14.74,491 239,14,74,491 Nil 35,86,04,360 32,56,80,871 3,29,23.489 60,14,50,061 31,90,59,777 28,23,90,284 Viacom 18 Media Pvt. Ltd 17 ITA No. 2591/MUM/2025 bmit that the losses shown in form ITR 6 for the year under consideration are losses remaining after set of loses claimed in earlier years. The assessee humbly submit 12 and A.Y. 2015-16 (refer the break up below) and 2013- Profits/ (loss) for the After setoff of taxable profits the losses remaining for AY 2009- 14 is as under and the same Net losses available for carry forward B) to subsequent 3,29,23.489 28,23,90,284 Printed from counselvise.com 2014-15 2015-16 2016-17 2017-18 2018-19 Total losses of earlier year b/f (A) Losses of current year ie. 2019- 20 Total losses c/f as per ITR On examination of submission of the assessee is found considerable hence, accepted. 5.9 In view of the aforesaid discussion, we are of the opinion that Assessing Officer had depreciation on the goodwill as well as amount of busi be carried forward. It is not necessary for the Assessing Officer to mention every reasoning for accepting the view of the assessee and such reasoning is required whenever the Assessing Officer is particularly not accepting the contention of the assessee and making additions. This is the normal practice followed by the Assessing Officer in the Income assessment order. In Assessing Officer even made clear that he has allowed the claim of Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 32,68,43,712 0 32,68.43,712 0 0 m 327,30,79,767 0 327,30,79,767 284,72,69,524 0 284,72,69,524 63,45,24,113 0 63,45,24,113 1043,32,46,028 303,62,15,139 739,70,30,887 Losses of current year ie. 282,64,81,723 0 282,64,81,723 1325,97,27,750 303,62,15,138 1022,35,12,612 On examination of submission of the assessee, reply of the assessee is found considerable hence, accepted.” view of the aforesaid discussion, we are of the opinion that had thoroughly examined both the issues of depreciation on the goodwill as well as amount of busi be carried forward. It is not necessary for the Assessing Officer to mention every reasoning for accepting the view of the assessee and is required whenever the Assessing Officer is particularly not accepting the contention of the assessee and making additions. This is the normal practice followed by the in the Income-tax Department while framing the assessment order. In the instant assessment order Assessing Officer even made clear that he has allowed the claim of Viacom 18 Media Pvt. Ltd 18 ITA No. 2591/MUM/2025 32,68.43,712 327,30,79,767 284,72,69,524 63,45,24,113 739,70,30,887 282,64,81,723 1022,35,12,612 assessee, reply of the view of the aforesaid discussion, we are of the opinion that d both the issues of depreciation on the goodwill as well as amount of business loss to be carried forward. It is not necessary for the Assessing Officer to mention every reasoning for accepting the view of the assessee and is required whenever the Assessing Officer is particularly not accepting the contention of the assessee and making additions. This is the normal practice followed by the while framing the the instant assessment order however the Assessing Officer even made clear that he has allowed the claim of Printed from counselvise.com the assessee after due verification of the submissions of the assessee on various queries raised by him. In such facts and circumstances, we do not Assessing Officer had have carried out in the facts and circumstances of the case. Accordingly, we reject Representative that the assess erroneous insofar as prej invoking Explanation 5.10 Another argument advanced by the learned departmental representative is that Assessing Officer has not fol consistent stand taken by the Department in preceding assessment years 2016-17 and 2017 first year of claim of depreciation of the goodwill arising from merger of Prism TV P ltd, the Assessing Officer disallo assessee. In assessment year 2017 disallowed by the Assessing Officer and assessee is in the appeal on this issue. According to the learned departmental representative, as the issue was not accepted by the principle of consistency and to keep the matter alive, he was mandatorily required to follow the stand of the Department and disallow such depreciation on the goodwill. According to him this action of the Assessing Officer was pr revenue. Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 the assessee after due verification of the submissions of the assessee on various queries raised by him. In such facts and we do not have any doubt in our Assessing Officer had carried out the inquiries which he ought to have carried out in the facts and circumstances of the case. we reject the contention of the learned Departmental epresentative that the assessment order is deemed to be erroneous insofar as prejudicial to the interest of the R xplanation -2 below section 263 of the Act Another argument advanced by the learned departmental representative is that Assessing Officer has not fol stand taken by the Department in preceding assessment 17 and 2017-18. The assessment year 2016 first year of claim of depreciation of the goodwill arising from merger of Prism TV P ltd, the Assessing Officer disallowed the claim of the assessee. In assessment year 2017-18 also such a claim has been disallowed by the Assessing Officer and assessee is in the appeal on this issue. According to the learned departmental representative, as not accepted by the Department principle of consistency and to keep the matter alive, he was mandatorily required to follow the stand of the Department and disallow such depreciation on the goodwill. According to him this action of the Assessing Officer was prejudicial to the interests of the Viacom 18 Media Pvt. Ltd 19 ITA No. 2591/MUM/2025 the assessee after due verification of the submissions of the assessee on various queries raised by him. In such facts and have any doubt in our mind that carried out the inquiries which he ought to have carried out in the facts and circumstances of the case. the contention of the learned Departmental ment order is deemed to be udicial to the interest of the Revenue Act. Another argument advanced by the learned departmental representative is that Assessing Officer has not followed the stand taken by the Department in preceding assessment 18. The assessment year 2016-17 being first year of claim of depreciation of the goodwill arising from merger wed the claim of the 18 also such a claim has been disallowed by the Assessing Officer and assessee is in the appeal on this issue. According to the learned departmental representative, as Department, following the principle of consistency and to keep the matter alive, he was mandatorily required to follow the stand of the Department and disallow such depreciation on the goodwill. According to him this ejudicial to the interests of the Printed from counselvise.com 6. We have heard rival submission of the parties We are of the opinion that firstly, in assessment year 2018 Assessing Officer accepted the claim of the depreciation of the goodwill and therefore the Assessing Officer cannot be blamed wherein he followed the finding of the Assessing Officer in the immediately prior assessment year. following consistent stand of Department is fallacious. without prejudice, even if we presume that consistent stand of the department is not followed, the AO might be prej not erroneous, because i in the case of the assessee in IT depreciation on the goodwill generated on account of merger of the studio 18 division with the assessee a has not been reversed by the Hon’ble ju therefore the Assessing Officer has followed a binding precedent on the issue in dispute, which action cannot be termed as erroneous. Since for invoking section 263 both the conditions i.e. the assessment order should be erroneous interest of the Revenue are to be satisfied cumulatively, but issue the condition of the assessment order to erroneous is not fulfilled and therefore the learned PCIT cannot invoke revision proceeding on this issue Departmental Representative is accordingly rejected. Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 rd rival submission of the parties We are of the opinion that firstly, in assessment year 2018 Assessing Officer accepted the claim of the depreciation of the efore the Assessing Officer cannot be blamed wherein he followed the finding of the Assessing Officer in the immediately prior assessment year. The claim of ld DR of not following consistent stand of Department is fallacious. without prejudice, even if we presume that consistent stand of the department is not followed, we are of the opinion that this action of might be prejudicial to the interest of the Revenue, but it is not erroneous, because in assessment year 2008-0 in the case of the assessee in ITA No. 7336/Mum/2012 allowed the depreciation on the goodwill generated on account of merger of the 18 division with the assessee as going concern. Said decision has not been reversed by the Hon’ble jurisdiction High Court and therefore the Assessing Officer has followed a binding precedent on the issue in dispute, which action cannot be termed as erroneous. Since for invoking section 263 both the conditions i.e. the assessment order should be erroneous as well as prej evenue are to be satisfied cumulatively, but the condition of the assessment order to erroneous is not fulfilled and therefore the learned PCIT cannot invoke revision on this issue. This argument of the learned epresentative is accordingly rejected. Viacom 18 Media Pvt. Ltd 20 ITA No. 2591/MUM/2025 rd rival submission of the parties on this issue. We are of the opinion that firstly, in assessment year 2018-19, the Assessing Officer accepted the claim of the depreciation of the efore the Assessing Officer cannot be blamed wherein he followed the finding of the Assessing Officer in the The claim of ld DR of not following consistent stand of Department is fallacious. Further, without prejudice, even if we presume that consistent stand of the we are of the opinion that this action of evenue, but it is 09, the Tribunal No. 7336/Mum/2012 allowed the depreciation on the goodwill generated on account of merger of the s going concern. Said decision risdiction High Court and therefore the Assessing Officer has followed a binding precedent on the issue in dispute, which action cannot be termed as erroneous. Since for invoking section 263 both the conditions i.e. the as well as prejudicial to the evenue are to be satisfied cumulatively, but on this the condition of the assessment order to erroneous is not fulfilled and therefore the learned PCIT cannot invoke revision his argument of the learned epresentative is accordingly rejected. Printed from counselvise.com 7. Now we take up the grounds on the merit as to whether the action of the Assessing Officer is erroneous interest of Revenue. 8. We have heard rival su the merit of the matter. As far as claim of depreciation is concerned it comprises of the three parts. Firstly, depreciation on goodwill in respect of acquisition of Studio 18 amounting to dispute. Secondly, depreciation on the goodwill in respect of amalgamation of Prism TV Ltd. amounting to is in dispute. Thirdly, depreciation on Voot Platform is in dispute. Fourthly, dispute is in respect of verification of carry losses to the subsequent assessment years. We take up all these issues one by one. 8.1 Firstly, we take up issue of goodwill in respect of acquisition of Studio 18. Fact qua issue in dispute are that during the financial year 2007-08 relevant to assessment had acquired the “Studio 18” division of Investments Pvt. Ltd. As per the business transfer agreement, the assessee had acquired the net assets at the value of Rs.3, consideration of Rs.4,13,53,652/ Rs.69,55,343/-. The assessee has been claiming depreciation on the said goodwill since assessment year 2008 Bench of the Tribunal has appro Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 Now we take up the grounds on the merit as to whether the action of the Assessing Officer is erroneous and prejudicial to the We have heard rival submissions of the parties on the issue on the merit of the matter. As far as claim of depreciation is concerned it comprises of the three parts. Firstly, depreciation on goodwill in respect of acquisition of Studio 18 amounting to Rs. Secondly, depreciation on the goodwill in respect of amalgamation of Prism TV Ltd. amounting to Rs.1,87,75,81,932/ is in dispute. Thirdly, depreciation on Voot Platform is in dispute. dispute is in respect of verification of carry sses to the subsequent assessment years. We take up all these Firstly, we take up issue of goodwill in respect of acquisition of Studio 18. Fact qua issue in dispute are that during the financial 08 relevant to assessment year 2008-09, the assessee had acquired the “Studio 18” division of ‘Network 18 Media & Investments Pvt. Ltd.’ on a going concern basis under slump sale. As per the business transfer agreement, the assessee had acquired the net assets at the value of Rs.3,44,00,309/- against the total consideration of Rs.4,13,53,652/-, thereby recognizing goodwill . The assessee has been claiming depreciation on the said goodwill since assessment year 2008-09. The Co Bench of the Tribunal has approved the claim of the assessee in the Viacom 18 Media Pvt. Ltd 21 ITA No. 2591/MUM/2025 Now we take up the grounds on the merit as to whether the and prejudicial to the bmissions of the parties on the issue on the merit of the matter. As far as claim of depreciation is concerned it comprises of the three parts. Firstly, depreciation on goodwill in Rs.85,655/- is in Secondly, depreciation on the goodwill in respect of 1,87,75,81,932/- is in dispute. Thirdly, depreciation on Voot Platform is in dispute. dispute is in respect of verification of carry forward of sses to the subsequent assessment years. We take up all these Firstly, we take up issue of goodwill in respect of acquisition of Studio 18. Fact qua issue in dispute are that during the financial 09, the assessee Network 18 Media & on a going concern basis under slump sale. As per the business transfer agreement, the assessee had acquired against the total , thereby recognizing goodwill at . The assessee has been claiming depreciation on 09. The Co-ordinate ved the claim of the assessee in the Printed from counselvise.com first year i.e. assessment year 2008 29.01.2016 passed in 265/Mum/2013. The ld Department has also accepted said order and same before the Hon’ble Bombay High Court. disputed by the ld DR. 8.2 Having considered the opinion that once the Income accepted the claim of depreciation in the year of capitalization itself, the Department cannot alter the position in subsequent years without any material change in facts and legal position in view of principle of consistency held by the Hon’ble Supreme Court Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC). error on the part of the Assessing officer on accepting tye claim of the assessee on this issue. justified in holding the order of the Assessing Officer as erroneou in so far as depreciation on the goodwill on acquisition of the Studio 18 is concerned. 8.3 The next ground on merit relates to depreciation on the goodwill in respect of amalgamation of Prism TV. are not in dispute. The assessee amalgamated Prism TV Pvt. Ltd. with effect from 01.04.2015 on a going concern basis pursuant to a scheme duly sanctioned by the Hon’ble Bombay High Court by order dated 12.08.2016. The amalgamation was ac Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 first year i.e. assessment year 2008-09 itself in its order dated passed in ITA Nos. 7446/Mum/2012 and The ld. Counsel submitted that t also accepted said order and did not challenge the same before the Hon’ble Bombay High Court. This fact has not been disputed by the ld DR. Having considered above submissions of the parties, we are of the opinion that once the Income-tax Department has allowed and claim of depreciation in the year of capitalization itself, the Department cannot alter the position in subsequent years without any material change in facts and legal position in view of principle of consistency held by the Hon’ble Supreme Court i Satsang v. CIT [1992] 193 ITR 321 (SC). error on the part of the Assessing officer on accepting tye claim of the assessee on this issue. In view of above, the Ld. PCIT justified in holding the order of the Assessing Officer as erroneou in so far as depreciation on the goodwill on acquisition of the Studio The next ground on merit relates to depreciation on the goodwill in respect of amalgamation of Prism TV. The material facts are not in dispute. The assessee amalgamated Prism TV Pvt. Ltd. with effect from 01.04.2015 on a going concern basis pursuant to a scheme duly sanctioned by the Hon’ble Bombay High Court by order dated 12.08.2016. The amalgamation was ac Viacom 18 Media Pvt. Ltd 22 ITA No. 2591/MUM/2025 09 itself in its order dated 7446/Mum/2012 and Counsel submitted that the Income-tax did not challenge the This fact has not been of the parties, we are of tax Department has allowed and claim of depreciation in the year of capitalization itself, the Department cannot alter the position in subsequent years without any material change in facts and legal position in view of principle of consistency held by the Hon’ble Supreme Court i Satsang v. CIT [1992] 193 ITR 321 (SC). There is no error on the part of the Assessing officer on accepting tye claim of In view of above, the Ld. PCIT is not justified in holding the order of the Assessing Officer as erroneous in so far as depreciation on the goodwill on acquisition of the Studio The next ground on merit relates to depreciation on the The material facts are not in dispute. The assessee amalgamated Prism TV Pvt. Ltd. with effect from 01.04.2015 on a going concern basis pursuant to a scheme duly sanctioned by the Hon’ble Bombay High Court by order dated 12.08.2016. The amalgamation was accounted for in Printed from counselvise.com the financial statements for the year ended 31.03.2016, wherein the assessee disclosed, in full transparency, the net assets acquired, the consideration paid, and the resultant goodwill arising as the excess of consideration over the net boo liabilities taken over. It is further an admitted position that the amalgamating company, Prism TV Pvt. Ltd., did not have any goodwill recorded in its books, nor had it claimed any depreciation thereon at any time. This fact stan Assessing Officer himself in the assessment order for A.Y. 2016 8.4 In assessment year 2016 disallowed depreciation on such goodwill by invoking the sixth proviso to section 32(1) of the Act, o in the hands of the amalgamated company cannot exceed what would have been allowable to the amalgamating company had the amalgamation not taken place. 8.5 The assessee contended, that the sixth proviso was enacted only to mitigate situations where both the amalgamating and amalgamated entities could simultaneously claim depreciation on the same asset—resulting in an unintended duplication. The mischief sought to be avoided was the possibility of depreciation exceeding 100% (or 150% in practical scenarios involving mid amalgamation). Significantly, the proviso was introduced even before intangible assets, including goodwill, came to be recognised as depreciable assets under section 32(1)(ii). Thus, the legislative Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 the financial statements for the year ended 31.03.2016, wherein the assessee disclosed, in full transparency, the net assets acquired, the consideration paid, and the resultant goodwill arising as the excess of consideration over the net book value of the assets and liabilities taken over. It is further an admitted position that the amalgamating company, Prism TV Pvt. Ltd., did not have any goodwill recorded in its books, nor had it claimed any depreciation thereon at any time. This fact stands acknowledged by the Assessing Officer himself in the assessment order for A.Y. 2016 In assessment year 2016-17, The Assessing Officer, however, disallowed depreciation on such goodwill by invoking the sixth proviso to section 32(1) of the Act, on the premise that depreciation in the hands of the amalgamated company cannot exceed what would have been allowable to the amalgamating company had the amalgamation not taken place. contended, that the sixth proviso was enacted itigate situations where both the amalgamating and amalgamated entities could simultaneously claim depreciation on resulting in an unintended duplication. The mischief sought to be avoided was the possibility of depreciation or 150% in practical scenarios involving mid amalgamation). Significantly, the proviso was introduced even before intangible assets, including goodwill, came to be recognised as depreciable assets under section 32(1)(ii). Thus, the legislative Viacom 18 Media Pvt. Ltd 23 ITA No. 2591/MUM/2025 the financial statements for the year ended 31.03.2016, wherein the assessee disclosed, in full transparency, the net assets acquired, the consideration paid, and the resultant goodwill arising as the k value of the assets and liabilities taken over. It is further an admitted position that the amalgamating company, Prism TV Pvt. Ltd., did not have any goodwill recorded in its books, nor had it claimed any depreciation ds acknowledged by the Assessing Officer himself in the assessment order for A.Y. 2016-17. 17, The Assessing Officer, however, disallowed depreciation on such goodwill by invoking the sixth n the premise that depreciation in the hands of the amalgamated company cannot exceed what would have been allowable to the amalgamating company had the contended, that the sixth proviso was enacted itigate situations where both the amalgamating and amalgamated entities could simultaneously claim depreciation on resulting in an unintended duplication. The mischief sought to be avoided was the possibility of depreciation or 150% in practical scenarios involving mid-year amalgamation). Significantly, the proviso was introduced even before intangible assets, including goodwill, came to be recognised as depreciable assets under section 32(1)(ii). Thus, the legislative Printed from counselvise.com intent behind the proviso cannot be stretched to deny depreciation on goodwill that did not exist in the books of the amalgamating company and came into existence solely as a result of amalgamation in the hands of the amalgamated company. 8.6 The assessee further was inserted into the statute even before the intangible assets were included as depreciable asset According to the assessee sixth proviso was not intended to deny depreciation on goodwill arising on amalgamation. 8.7 The learned counsel for the assessee has placed reliance on the decision of the Mumbai Tribunal in (P.) Ltd. vs. DCIT [2024] 169 taxmann.com 290 (Mum.), wherein depreciation on goodwill arising upon amalgamation was held allowable notwithstanding the sixth proviso, on the very ground that the amalgamating entity did not possess or claim depreciation on such goodwill. The books of amalgamated company by holding that since the amalgamating company did not have any goodwill recorded in its books of accounts or as part of a block of depreciable assets, prior to amalgamation, theref goodwill by the amalgamating company does not arise in the instant case. Accordingly, it was held that the provisions of the sixth proviso to section 32(1) of the Act are not applicable to the facts of the present case since the goodwill did not exist in the books of the Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 behind the proviso cannot be stretched to deny depreciation on goodwill that did not exist in the books of the amalgamating company and came into existence solely as a result of amalgamation in the hands of the amalgamated company. The assessee further contended that besides, the sixth proviso the statute even before the intangible assets were included as depreciable asset u/s 32(1) of the Act and therefore, According to the assessee sixth proviso was not intended to deny on goodwill arising on amalgamation. The learned counsel for the assessee has placed reliance on the decision of the Mumbai Tribunal in Dow Chemical International [2024] 169 taxmann.com 290 (Mum.), wherein depreciation on goodwill arising upon amalgamation was held allowable notwithstanding the sixth proviso, on the very ground that the amalgamating entity did not possess or claim depreciation on such goodwill. The ITAT allowed depreciation on Goodwill in the books of amalgamated company by holding that since the amalgamating company did not have any goodwill recorded in its books of accounts or as part of a block of depreciable assets, prior to amalgamation, therefore the question of claim of depreciation on goodwill by the amalgamating company does not arise in the instant case. Accordingly, it was held that the provisions of the sixth proviso to section 32(1) of the Act are not applicable to the facts of nt case since the goodwill did not exist in the books of the Viacom 18 Media Pvt. Ltd 24 ITA No. 2591/MUM/2025 behind the proviso cannot be stretched to deny depreciation on goodwill that did not exist in the books of the amalgamating company and came into existence solely as a result of amalgamation in the hands of the amalgamated company. esides, the sixth proviso the statute even before the intangible assets were u/s 32(1) of the Act and therefore, According to the assessee sixth proviso was not intended to deny The learned counsel for the assessee has placed reliance on Dow Chemical International [2024] 169 taxmann.com 290 (Mum.), wherein depreciation on goodwill arising upon amalgamation was held allowable notwithstanding the sixth proviso, on the very ground that the amalgamating entity did not possess or claim depreciation ITAT allowed depreciation on Goodwill in the books of amalgamated company by holding that since the amalgamating company did not have any goodwill recorded in its books of accounts or as part of a block of depreciable assets, prior ore the question of claim of depreciation on goodwill by the amalgamating company does not arise in the instant case. Accordingly, it was held that the provisions of the sixth proviso to section 32(1) of the Act are not applicable to the facts of nt case since the goodwill did not exist in the books of the Printed from counselvise.com amalgamating company but has arisen in the process of amalgamation. The parallel with the present case is complete; the ratio squarely applies. 8.8 Moreover, reliance was placed on the decision Supreme Court in CIT vs. Smifs Securities Ltd. (SC), holding that goodwill constitutes a “business or commercial right of similar nature” eligible for depreciation under section 32(1)(ii). This principle has been consiste subsequent decisions, including (Karnataka HC), Thermo Fisher Scientific India (P.) Ltd. Mumbai), Urmin Marketing (P.) Ltd. the assessee’s own case for A.Y. 2008 goodwill arising from the acquisition of Studio18. 8.9 Further, the Ld. counsel for the assessee submitted that moreover, in view of amendments brought in by the Finance Act, 2021, curtailing depreciation on Goodwill w.e.f. 1.4.2021, made clear that depreciation on goodwill was allowable upto AY 2020 Hon'ble Bangalore ITAT in case of I & B Seeds (P.) Ltd. v. DCIT [2022] 142 taxmann.com 274 observed that the intention of the Legislature is that depreciation on goodwill is allowable p the said amendments, is manifest from the adjustment mechanism. If the legislative intention was to deny depreciation for the past years as well, then there was no need for any adjustment to the cost of acquisition of the goodwill. Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 amalgamating company but has arisen in the process of amalgamation. The parallel with the present case is complete; the ratio squarely applies. Moreover, reliance was placed on the decision CIT vs. Smifs Securities Ltd. [2012] 348 ITR 302 (SC), holding that goodwill constitutes a “business or commercial right of similar nature” eligible for depreciation under section 32(1)(ii). This principle has been consistently followed in subsequent decisions, including Padmini Products (P.) Ltd. Thermo Fisher Scientific India (P.) Ltd. Urmin Marketing (P.) Ltd. (ITAT Ahmedabad), and even in the assessee’s own case for A.Y. 2008-09 relating to goodwill arising from the acquisition of Studio18. Further, the Ld. counsel for the assessee submitted that moreover, in view of amendments brought in by the Finance Act, 2021, curtailing depreciation on Goodwill w.e.f. 1.4.2021, made clear that depreciation on goodwill was allowable upto AY 2020 Hon'ble Bangalore ITAT in case of I & B Seeds (P.) Ltd. 142 taxmann.com 274 observed that the intention of the Legislature is that depreciation on goodwill is allowable p the said amendments, is manifest from the adjustment mechanism. If the legislative intention was to deny depreciation for the past years as well, then there was no need for any adjustment to the cost goodwill. Viacom 18 Media Pvt. Ltd 25 ITA No. 2591/MUM/2025 amalgamating company but has arisen in the process of amalgamation. The parallel with the present case is complete; the Moreover, reliance was placed on the decision of the Hon’ble [2012] 348 ITR 302 (SC), holding that goodwill constitutes a “business or commercial right of similar nature” eligible for depreciation under section ntly followed in Padmini Products (P.) Ltd. Thermo Fisher Scientific India (P.) Ltd. (ITAT (ITAT Ahmedabad), and even in depreciation on Further, the Ld. counsel for the assessee submitted that moreover, in view of amendments brought in by the Finance Act, 2021, curtailing depreciation on Goodwill w.e.f. 1.4.2021, made it clear that depreciation on goodwill was allowable upto AY 2020-21. Hon'ble Bangalore ITAT in case of I & B Seeds (P.) Ltd. 142 taxmann.com 274 observed that the intention of the Legislature is that depreciation on goodwill is allowable prior to the said amendments, is manifest from the adjustment mechanism. If the legislative intention was to deny depreciation for the past years as well, then there was no need for any adjustment to the cost Printed from counselvise.com 9. We have carefully considered the rival submissions, perused the material on record, and examined the statutory framework as well as the judicial precedents governing the allowability of depreciation on goodwill arising upon amalgamation. depreciation u/s 32(1) of t machinery, plant or furniture being tangible assets and also on intangible assets like knowhow, patents, copyrights, trademarks, license, frenchisies or any other business or commercial rights or similar nature acquired on goodwill acquired on amalgamation (being access of consideration paid over the value of the net assets acquired) by the amalgamated company came into before Hon’ble Supreme Court in the case of CIT v. Smifs Securities Ltd. 04 wherein Hon’ble Supreme Court held that goodwill will fall under the expression ‘any other business or commercial right of similar nature and qualify to be treated as an depreciation while computing business income. 9.1 Subsequently, depreciation of the goodwill generated as a result of amalgamation came up before the Co the Bengaluru Tribunal in the case of United Bravery Ltd. v. Addl. CIT TS-553-ITAT-2016 (Bang.). In relevant to assessment year 2007 assessee namely Karnataka Bereweries and Distilary Ltd. (KBDL) got amalgamated as peer the order of the Hon’ble High Court. The Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 ully considered the rival submissions, perused the material on record, and examined the statutory framework as well as the judicial precedents governing the allowability of depreciation on goodwill arising upon amalgamation. depreciation u/s 32(1) of the Act is allowable on building, machinery, plant or furniture being tangible assets and also on intangible assets like knowhow, patents, copyrights, trademarks, license, frenchisies or any other business or commercial rights or similar nature acquired on or after 01.04.1998. The issue of goodwill acquired on amalgamation (being access of consideration paid over the value of the net assets acquired) by the amalgamated company came into before Hon’ble Supreme Court in the case of CIT v. Smifs Securities Ltd. 348 ITR 302 for assessment year 2003 04 wherein Hon’ble Supreme Court held that goodwill will fall under ‘any other business or commercial right of similar nature and qualify to be treated as an intangible asset eligible for ile computing business income. Subsequently, depreciation of the goodwill generated as a result of amalgamation came up before the Co-ordinate Bench of the Bengaluru Tribunal in the case of United Bravery Ltd. v. Addl. 2016 (Bang.). In this case, in the previsous year relevant to assessment year 2007-08 a wholly owned subsidiary of assessee namely Karnataka Bereweries and Distilary Ltd. (KBDL) got amalgamated as peer the order of the Hon’ble High Court. The Viacom 18 Media Pvt. Ltd 26 ITA No. 2591/MUM/2025 ully considered the rival submissions, perused the material on record, and examined the statutory framework as well as the judicial precedents governing the allowability of depreciation on goodwill arising upon amalgamation. The he Act is allowable on building, machinery, plant or furniture being tangible assets and also on intangible assets like knowhow, patents, copyrights, trademarks, license, frenchisies or any other business or commercial rights or or after 01.04.1998. The issue of goodwill acquired on amalgamation (being access of consideration paid over the value of the net assets acquired) by the amalgamated company came into before Hon’ble Supreme Court in the case of 348 ITR 302 for assessment year 2003- 04 wherein Hon’ble Supreme Court held that goodwill will fall under ‘any other business or commercial right of similar asset eligible for Subsequently, depreciation of the goodwill generated as a ordinate Bench of the Bengaluru Tribunal in the case of United Bravery Ltd. v. Addl. this case, in the previsous year 08 a wholly owned subsidiary of assessee namely Karnataka Bereweries and Distilary Ltd. (KBDL) got amalgamated as peer the order of the Hon’ble High Court. The Printed from counselvise.com goodwill amounting to Rs.62.3 result of amalgamation, being the access of purchase consideration paid over the fair value of the tangible assets and other net current assets received from the amalgamating company and depreciation of Rs.15.57 crores wa that by virtue of Sixth Proviso (earlier Fifth Proviso) to section 32(1) (ii) of the Act, the depreciation in the hands of amalgamated company was allowable only to the extent that was otherwise allowable if such succession or amalgamation had not taken place, therefore, the assessee being amalgamated company could not claim or be allowed depreciation on the assets acquired in the scheme of amalgamation of an amount more than the depreciation which was allowable noted that ruling of the Hon’ble Supreme Court in the case of Smif Securities Ltd. (supra) was only on the point whether the goodwill fall in the category of intangible assets and the said judgement would not override the provisions of the said proviso to section 32(1)(ii), which restricted the claim of depreciation in the cases specified there under. 9.2 Subsequently, identical issue came before the Co Bench of Hyderabad Tribunal in the case of Mylan Lab v. DCIT TS-691-ITAT the principle of purchase method of accounting, considered the difference between the amount of investment in the fair market Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 goodwill amounting to Rs.62.30 crores was shown as arising as a result of amalgamation, being the access of purchase consideration paid over the fair value of the tangible assets and other net current assets received from the amalgamating company and depreciation of Rs.15.57 crores was claimed by the assessee. The Tribunal held that by virtue of Sixth Proviso (earlier Fifth Proviso) to section 32(1) (ii) of the Act, the depreciation in the hands of amalgamated company was allowable only to the extent that was otherwise h succession or amalgamation had not taken place, therefore, the assessee being amalgamated company could not claim or be allowed depreciation on the assets acquired in the scheme of amalgamation of an amount more than the depreciation which was allowable to the amalgamating company. The Tribunal noted that ruling of the Hon’ble Supreme Court in the case of Smif Securities Ltd. (supra) was only on the point whether the goodwill fall in the category of intangible assets and the said judgement ide the provisions of the said proviso to section 32(1)(ii), which restricted the claim of depreciation in the cases under. Subsequently, identical issue came before the Co Bench of Hyderabad Tribunal in the case of Mylan Lab ITAT-2019 (Hyd). In the case the assessee following the principle of purchase method of accounting, considered the difference between the amount of investment in the fair market Viacom 18 Media Pvt. Ltd 27 ITA No. 2591/MUM/2025 0 crores was shown as arising as a result of amalgamation, being the access of purchase consideration paid over the fair value of the tangible assets and other net current assets received from the amalgamating company and depreciation s claimed by the assessee. The Tribunal held that by virtue of Sixth Proviso (earlier Fifth Proviso) to section 32(1) (ii) of the Act, the depreciation in the hands of amalgamated company was allowable only to the extent that was otherwise h succession or amalgamation had not taken place, therefore, the assessee being amalgamated company could not claim or be allowed depreciation on the assets acquired in the scheme of amalgamation of an amount more than the depreciation to the amalgamating company. The Tribunal noted that ruling of the Hon’ble Supreme Court in the case of Smif Securities Ltd. (supra) was only on the point whether the goodwill fall in the category of intangible assets and the said judgement ide the provisions of the said proviso to section 32(1)(ii), which restricted the claim of depreciation in the cases Subsequently, identical issue came before the Co-ordinate Bench of Hyderabad Tribunal in the case of Mylan Laboratories Ltd. 2019 (Hyd). In the case the assessee following the principle of purchase method of accounting, considered the difference between the amount of investment in the fair market Printed from counselvise.com value of net assets as goodwill arising of amalg Assessing Officer disallowed the depreciation on goodwill relying upon the decision of the Bengalurur Bench of the Tribunal in the case of United Breweries Ltd. (supra). The Co Tribunal after considering the arguments of that deduction of depreciation on goodwill could not be denied invoking Sixth Proviso (earlier Fifth Proviso) excepting the plea of the assessee that the Sixth Proviso to section 32(1)(ii) was only mechanism of allocation of the dep written down value of assets owned by the amalgamating company, whereby such depreciation got allocated between the amalgamating and amalgamated company in the year of amalgamation and had no applicability for any new asse amalgamation in the hands of the amalgamated company. The Tribunal referred to accounting principles laid down in AS observed that in case of amalgamation in the nature of purchase the consideration paid in access of the net liabilities of the amalgamating company was to be treated as goodwill and such goodwill was held to be eligible for depreciation u/s 32(1) by relying upon the decision of the Hon’ble Supreme Court in the case of Smif Securities Ltd. (supra). 9.3 In view of the above strands of Tribunal jurisprudence prior to the Finance Act, 2021 one taking the restrictive view [e.g., Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 value of net assets as goodwill arising of amalg Assessing Officer disallowed the depreciation on goodwill relying upon the decision of the Bengalurur Bench of the Tribunal in the case of United Breweries Ltd. (supra). The Co-ordinate Bench of the Tribunal after considering the arguments of the both parties held that deduction of depreciation on goodwill could not be denied invoking Sixth Proviso (earlier Fifth Proviso) excepting the plea of the assessee that the Sixth Proviso to section 32(1)(ii) was only cation of the depreciation otherwise allowable on written down value of assets owned by the amalgamating company, whereby such depreciation got allocated between the amalgamating and amalgamated company in the year of amalgamation and had no applicability for any new asset arising on account of amalgamation in the hands of the amalgamated company. The Tribunal referred to accounting principles laid down in AS observed that in case of amalgamation in the nature of purchase the consideration paid in access of the net value of assets and of the amalgamating company was to be treated as goodwill and such goodwill was held to be eligible for depreciation u/s 32(1) by relying upon the decision of the Hon’ble Supreme Court in the case of Smif Securities Ltd. (supra). In view of the above discussion we note existence of two strands of Tribunal jurisprudence prior to the Finance Act, 2021 one taking the restrictive view [e.g., United Breweries Ltd. Viacom 18 Media Pvt. Ltd 28 ITA No. 2591/MUM/2025 value of net assets as goodwill arising of amalgamation. The Assessing Officer disallowed the depreciation on goodwill relying upon the decision of the Bengalurur Bench of the Tribunal in the ordinate Bench of the the both parties held that deduction of depreciation on goodwill could not be denied invoking Sixth Proviso (earlier Fifth Proviso) excepting the plea of the assessee that the Sixth Proviso to section 32(1)(ii) was only a reciation otherwise allowable on written down value of assets owned by the amalgamating company, whereby such depreciation got allocated between the amalgamating and amalgamated company in the year of amalgamation and had t arising on account of amalgamation in the hands of the amalgamated company. The Tribunal referred to accounting principles laid down in AS-14 and observed that in case of amalgamation in the nature of purchase value of assets and of the amalgamating company was to be treated as goodwill and such goodwill was held to be eligible for depreciation u/s 32(1) by relying upon the decision of the Hon’ble Supreme discussion we note existence of two strands of Tribunal jurisprudence prior to the Finance Act, 2021— United Breweries Ltd., Printed from counselvise.com Bangalore Tribunal (supra)] and another adopting the broader interpretation consistent with Laboratories Ltd., Hyderabad Tribunal)]. The Assessing Officer in the present case followed the latter view, which is a possible and reasonable interpretation borne out of binding Supreme Court authority and consistent Tribun where two views are possible, and the Assessing Officer has adopted one which is not contrary to law, the same cannot be substituted in revision merely because another view is also feasible. The learned PCIT was, therefore, not justified in disturbing the plausible view adopted by the Assessing Officer. 9.4 In view of the above discussion, and applying the binding ratio of the Hon’ble Supreme Court in as the consistent line of authorit depreciation on goodwill arising upon amalgamation where no such goodwill existed in the books of the amalgamating company, we hold that the sixth proviso to section 32(1) has no application to the present case. The goodwil came into existence only upon amalgamation and qualifies for depreciation under section 32(1)(ii). The Assessing Officer has, in our view, correctly appreciated the legal position and allowed depreciation accordingly. 9.5 Further, an amendment brought by the Finance Act, 2021 curtailing depreciation of goodwill is Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 Bangalore Tribunal (supra)] and another adopting the broader interpretation consistent with Smifs Securities , Hyderabad Tribunal)]. The Assessing Officer in the present case followed the latter view, which is a possible and reasonable interpretation borne out of binding Supreme Court authority and consistent Tribunal decisions. It is trite law that where two views are possible, and the Assessing Officer has adopted one which is not contrary to law, the same cannot be substituted in revision merely because another view is also feasible. The learned e, not justified in disturbing the plausible view adopted by the Assessing Officer. In view of the above discussion, and applying the binding ratio of the Hon’ble Supreme Court in Smifs Securities Ltd as the consistent line of authority supporting the allowability of depreciation on goodwill arising upon amalgamation where no such goodwill existed in the books of the amalgamating company, we hold that the sixth proviso to section 32(1) has no application to the present case. The goodwill in question is a new intangible asset that came into existence only upon amalgamation and qualifies for depreciation under section 32(1)(ii). The Assessing Officer has, in our view, correctly appreciated the legal position and allowed ingly. an amendment brought by the Finance Act, 2021 curtailing depreciation of goodwill is prospective and does not apply Viacom 18 Media Pvt. Ltd 29 ITA No. 2591/MUM/2025 Bangalore Tribunal (supra)] and another adopting the broader Smifs Securities [e.g., Mylan , Hyderabad Tribunal)]. The Assessing Officer in the present case followed the latter view, which is a possible and reasonable interpretation borne out of binding Supreme Court al decisions. It is trite law that where two views are possible, and the Assessing Officer has adopted one which is not contrary to law, the same cannot be substituted in revision merely because another view is also feasible. The learned e, not justified in disturbing the plausible view In view of the above discussion, and applying the binding ratio Smifs Securities Ltd (supra). as well y supporting the allowability of depreciation on goodwill arising upon amalgamation where no such goodwill existed in the books of the amalgamating company, we hold that the sixth proviso to section 32(1) has no application to the l in question is a new intangible asset that came into existence only upon amalgamation and qualifies for depreciation under section 32(1)(ii). The Assessing Officer has, in our view, correctly appreciated the legal position and allowed an amendment brought by the Finance Act, 2021 prospective and does not apply Printed from counselvise.com in the year under consideration. Thus the Assessing Officer has allowed the depreciation of the goodwill consciously a the settled legal position. Assessing Officer. The action of the PCIT in seeking to substitute his own interpretation for a legally tenable view adopted by the Assessing Officer is unsustainable. The as ground 10. The third ground Platform. The Ld. counsel for the assessee submitted that the Ld. PCIT committed error assets, being Voot platform, of the goodwill. He submitted that was not even a subject matter of disallowance in assessment year 2016-17 and 2017- material facts as compared to 2017-18 and particularly the depreciation of the Voot Platform is on the intangible assets other than the goodwill and therefore his finding in relation to depreciation of goodwill does not apply to the depreciation assets i consistency also the action of the Ld. PCIT is not justified. 11. The next issue relate to denying carry forward of losses to subsequent assessment years. The facts qua the dispute are that during the year under co forward of business losses of Rs.1022,35,12,612/ Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 in the year under consideration. Thus the Assessing Officer has allowed the depreciation of the goodwill consciously a the settled legal position. We find no infirmity in the order of the Assessing Officer. The action of the PCIT in seeking to substitute his own interpretation for a legally tenable view adopted by the Assessing Officer is unsustainable. The assessee succeeds on this The third ground on merit is related to depreciation on Voot Platform. The Ld. counsel for the assessee submitted that the Ld. PCIT committed error in setting aside depreciation on intangible assets, being Voot platform, by misunderstanding the same as part of the goodwill. He submitted that depreciation on Voot Platform not even a subject matter of disallowance in assessment year -18. In our opinion, without any change in material facts as compared to the assessment year 2016 18 and particularly the depreciation of the Voot Platform is on the intangible assets other than the goodwill and therefore his finding in relation to depreciation of goodwill does not apply to the depreciation assets in Voot platform. In view of principle of consistency also the action of the Ld. PCIT is not justified. The next issue relate to denying carry forward of losses to subsequent assessment years. The facts qua the dispute are that during the year under consideration, the assessee claimed carry forward of business losses of Rs.1022,35,12,612/- Viacom 18 Media Pvt. Ltd 30 ITA No. 2591/MUM/2025 in the year under consideration. Thus the Assessing Officer has allowed the depreciation of the goodwill consciously and following We find no infirmity in the order of the Assessing Officer. The action of the PCIT in seeking to substitute his own interpretation for a legally tenable view adopted by the sessee succeeds on this related to depreciation on Voot Platform. The Ld. counsel for the assessee submitted that the Ld. in setting aside depreciation on intangible by misunderstanding the same as part depreciation on Voot Platform not even a subject matter of disallowance in assessment year 18. In our opinion, without any change in the assessment year 2016-17 and 18 and particularly the depreciation of the Voot Platform is on the intangible assets other than the goodwill and therefore his finding in relation to depreciation of goodwill does not apply to the n view of principle of consistency also the action of the Ld. PCIT is not justified. The next issue relate to denying carry forward of losses to subsequent assessment years. The facts qua the dispute are that the assessee claimed carry in its return of Printed from counselvise.com income. During the course of assessment proceedings vide notice dated 17.09.2022, the Assessing Officer sought explanation on year wise disclosure made in schedule Income-tax Return. In response a detailed reply was filed vide submission dated 22.09.2022 giving year wise utilization of brought forward business losses and balance carry forward business losses. Having gone through allowed the carry forward losses. The Ld. PCIT has alleged th verification has been done figures of carry forward losses and directed the Assessing Officer to verify and allow as per law. The Ld. counsel for the assessee submitted that eligibility for carry forward losses in the year of incurrence of loss is academic and same has to be decided by the AO in the year in which the set off is claimed. In this respect, reliance is placed on the decision of Hon'ble Supreme Court in case of CIT vs. Manmohan Das (Deceased) [1966] 59 ITR 699 (SC); Cargo Service Centre India (P) Ltd. V. DCIT (2021) ITA No. 3612/Mum/2019, wherein the AO did not allow carry forward of a business loss claimed not a business loss. Before deciding the issue as to whether the loss was business loss or not, the Hon'ble Supreme Court held that it is a statutory right of an assessee to carry year and whether or not such loss is eligible to set income of subsequent year is to be determined by the AO in the Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 income. During the course of assessment proceedings vide notice dated 17.09.2022, the Assessing Officer sought explanation on year de in schedule of carry forward losses as per tax Return. In response a detailed reply was filed vide submission dated 22.09.2022 giving year wise utilization of brought forward business losses and balance carry forward business losses. Having gone through the details, the Assessing Officer expressly allowed the carry forward losses. The Ld. PCIT has alleged th verification has been done with respect to the correctness of the figures of carry forward losses and directed the Assessing Officer to s per law. The Ld. counsel for the assessee submitted that eligibility for carry forward losses in the year of incurrence of loss is academic and same has to be decided by the AO in the year in which the set off is claimed. In this respect, on the decision of Hon'ble Supreme Court in case of CIT vs. Manmohan Das (Deceased) [1966] 59 ITR 699 (SC); Cargo Service Centre India (P) Ltd. V. DCIT (2021) ITA No. 3612/Mum/2019, wherein the AO did not allow carry forward of a business loss claimed by the Assessee, alleging that the same was not a business loss. Before deciding the issue as to whether the loss was business loss or not, the Hon'ble Supreme Court held that it is a statutory right of an assessee to carry forward to the following hether or not such loss is eligible to set income of subsequent year is to be determined by the AO in the Viacom 18 Media Pvt. Ltd 31 ITA No. 2591/MUM/2025 income. During the course of assessment proceedings vide notice dated 17.09.2022, the Assessing Officer sought explanation on year carry forward losses as per tax Return. In response a detailed reply was filed vide submission dated 22.09.2022 giving year wise utilization of brought forward business losses and balance carry forward business losses. s, the Assessing Officer expressly allowed the carry forward losses. The Ld. PCIT has alleged that no with respect to the correctness of the figures of carry forward losses and directed the Assessing Officer to s per law. The Ld. counsel for the assessee submitted that eligibility for carry forward losses in the year of incurrence of loss is academic and same has to be decided by the AO in the year in which the set off is claimed. In this respect, on the decision of Hon'ble Supreme Court in case of CIT vs. Manmohan Das (Deceased) [1966] 59 ITR 699 (SC); Cargo Service Centre India (P) Ltd. V. DCIT (2021) ITA No. 3612/Mum/2019, wherein the AO did not allow carry forward of a by the Assessee, alleging that the same was not a business loss. Before deciding the issue as to whether the loss was business loss or not, the Hon'ble Supreme Court held that it is forward to the following hether or not such loss is eligible to set-off with the income of subsequent year is to be determined by the AO in the Printed from counselvise.com year of set-off. The relevant extract of the under - “Whether the loss of profits or gains in any year may b carried forward to the following year and set off against the profits and gains of the same business, profession or vocation under section 24(2) has to be determined by the ITO who deals with the assessment of the subsequent year. It is for the ITO deali subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the ITO who computes the loss in the previous year under section 24(3) that the loss cannot be set off against the income of the subsequent year is not binding on the assessee\". Following the above decision, Mumbai, in case of Cargo Service Centre India (P) Ltd V. DCIT [2021] ITA No. u/s. 263 denying the carry forward of losses to subsequent year holding that the observations about the eligibility of loss being carried forward do not affect the interests of 12. We have heard rival submissions of the parties view that actual revenue year of set off of such loss against the year in which profit is Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 off. The relevant extract of the decision is reproduced as “Whether the loss of profits or gains in any year may b carried forward to the following year and set off against the profits and gains of the same business, profession or vocation under section 24(2) has to be determined by the ITO who deals with the assessment of the subsequent year. It is for the ITO dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the ITO who computes the loss in the previous year under section 24(3) that the loss nnot be set off against the income of the subsequent year is not binding on the assessee\". Following the above decision, The coordinate Bench of ITAT Mumbai, in case of Cargo Service Centre India (P) Ltd V. 3612/Mum/2119, had also quas u/s. 263 denying the carry forward of losses to subsequent year observations about the eligibility of loss being not affect the interests of the assessee. We have heard rival submissions of the parties view that actual revenue impact for adjustment of loss arises in the year of set off of such loss against the year in which profit is Viacom 18 Media Pvt. Ltd 32 ITA No. 2591/MUM/2025 is reproduced as “Whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and gains of the same business, profession or vocation under section 24(2) has to be determined by the ITO who deals with the assessment of the subsequent ng with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. A decision recorded by the ITO who computes the loss in the previous year under section 24(3) that the loss nnot be set off against the income of the subsequent The coordinate Bench of ITAT Mumbai, in case of Cargo Service Centre India (P) Ltd V. 3612/Mum/2119, had also quashed revision u/s. 263 denying the carry forward of losses to subsequent year observations about the eligibility of loss being assessee. We have heard rival submissions of the parties. We are of the impact for adjustment of loss arises in the year of set off of such loss against the year in which profit is Printed from counselvise.com available and the AO allow set off of such loss against available profit. Thus as far as wrong or unverified is concerned, it is not prejudicial to the interest of the Revenue and therefore, one of the condition required for invoking section 253 is not fulfill. Therefore, action of the Ld. PCIT on this issue for setting aside the order is unwarranted. In view of the aforesaid discussion, the order of the Ld. PCIT both on the legal grounds as well as grounds on merit is not sustainable in law. Accordingly, we set aside the order of the Ld. CIT(A). 13. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 27/11/2025 Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Viacom 18 Media Pvt. Ltd ITA No. 2591/MUM/2025 available and the AO allow set off of such loss against available Thus as far as wrong or unverified of the carry forward losses it is not prejudicial to the interest of the Revenue and therefore, one of the condition required for invoking section 253 is not fulfill. Therefore, action of the Ld. PCIT on this issue for setting r is unwarranted. In view of the aforesaid discussion, the order of the Ld. PCIT both on the legal grounds as well as grounds on merit is not sustainable in law. Accordingly, we set aside the order of the Ld. CIT(A). In the result, the appeal of the assessee is allowed. ounced in the open Court on 27/11/2025. - Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Viacom 18 Media Pvt. Ltd 33 ITA No. 2591/MUM/2025 available and the AO allow set off of such loss against available of the carry forward losses it is not prejudicial to the interest of the Revenue and therefore, one of the condition required for invoking section 253 is not fulfill. Therefore, action of the Ld. PCIT on this issue for setting r is unwarranted. In view of the aforesaid discussion, the order of the Ld. PCIT both on the legal grounds as well as grounds on merit is not sustainable in law. Accordingly, we set In the result, the appeal of the assessee is allowed. /11/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "