Gera Developments Pvt. Ltd Vs PCIT (ITAT Pune)
ITAT Pune held that non-examination of issue of depreciation claimed on goodwill justifies invocation of revisionary proceeding under section 263 of the Income Tax Act. Accordingly, order sustained and appeal of assessee dismissed.
Facts- The assessee is a Private Limited Company engaged in the business of Builders and Developers. Post completion of scrutiny assessment, PCIT (Central) invoked provisions of section 263 of the Act regarding the claim of depreciation on intangible assets at ₹1,86,95,184 giving reference of the generation of goodwill at the time of amalgamation in the A.Y. 2015-16 and also observed that during the year under consideration the written down value of Goodwill in the books at ₹18,89,24,584 has been impaired during the year and written off in the profit and loss account but still the assessee has claimed depreciation u/s.32 of the Act on the said impaired intangible asset, i.e. Goodwill based on the Block of Asset concept u/s. 32 of the Income Tax Act. Now the assessee is in appeal before this Tribunal assailing the order of PCIT dated 19.03.2024.
Conclusion- Held that under the revisionary power ld. PCIT on going through the records has noticed that the claim of depreciation on Goodwill has been made inspite of the fact that total book value of the Goodwill has been impaired during the year and is shown at Nil amount and under these given facts and circumstances ld. AO ought to have carried out the detailed enquiry and in absence thereof, there is no inconsistency in the impugned finding of ld. PCIT directing the AO to verify such claim of depreciation on Goodwill at ₹1,86,95,184 made by the asset in the computation of income.
