Saint Gobain India Pvt. Ltd. Vs DCIT (ITAT Chennai)
The Chennai ITAT considered cross appeals by Saint Gobain India Pvt. Ltd. and the Revenue against the CIT(A)’s order dated 26.08.2025 for AY 2015-16. The assessee, engaged in manufacturing and sale of processed sand, dolomite and various glass products, had filed its return declaring Nil income after setting off brought-forward losses and book profit under section 115JB. Following scrutiny and a reference to the Transfer Pricing Officer, the AO made a transfer pricing adjustment of Rs.30,19,88,344 and other additions/disallowances. The CIT(A) granted partial relief, leading to appeals before the Tribunal.
On export commission paid to Saint Gobain Exprover, Belgium, the assessee accepted that, in view of the Supreme Court decision in A.O (International Taxation) vs. Nestle SA [2023] 458 ITR 756 (SC), the issue had to be decided against it. The Tribunal therefore dismissed this ground concerning disallowance under section 40(a)(i).
The assessee had claimed depreciation of Rs.122,91,83,652 on goodwill arising from amalgamations. The AO disallowed the claim. The Tribunal relied on CIT vs. Smifs Securities Ltd. [2012] 348 ITR 302 (SC), which held goodwill to be an asset under Explanation 3(b) to section 32(1). It also noted the applicability of the fifth proviso to section 32(1) and the prospective nature of the Finance Act, 2021 amendment excluding goodwill from section 32(1)(ii). The Tribunal directed deletion of the disallowance.
