Case Law Details
Carolina Food And Industries Pvt. Limited Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that the claim the depreciation on goodwill which has resulted from the scheme of amalgamation which was duly approved by the Hon’ble Calcutta High Court cannot be rejected.
Facts-
Post amalgamation, the assessee claimed depreciation amounting to Rs.6,22,022,993/- on Goodwill u/s. 32 of the Income Tax Act, 1961 in accordance with the ratio laid down by the Hon’ble Apex Court in the case of CIT –vs.- Smifs Securities Limited (2012) 348 ITR 302 (SC). AO on examination of this note issued a questionnaire to the assessee. Assessee duly submitted the reply, however, the same was rejected by AO.
Finally the claim of the assessee was rejected by the ld. Assessing Officer for two reasons, namely the assessee has not followed the prescribed procedure as per AS-14 and not relied on the relevant balance sheet as on 01.01.2013 thereby leading to a wrong computation of ratio of share swap at 1:24; and secondly the valuation of assets not being done at fair value or market value but book value of assets was taken and finally disallowed the claim of depreciation amounting to Rs.6,24,73,357/- and added the same to the income of the assessee in the assessment framed under section 143(3) dated 13.12.2017.
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