Urmin Marketing Pvt. Ltd, Ahmedabad Vs. The DCIT, Circle-4(1)(1), Ahmedabad

This Income Tax Appellate Tribunal (ITAT) case involves Urmin Marketing Pvt. Ltd. (now Unicorn Packaging LLP) appealing against the DCIT's order for the assessment year 2015-16. The primary issue concerns the disallowance of depreciation on goodwill amounting to over £1.17 crore. The assessee argued that the Commissioner of Income-tax (Appeals) erred by confirming the Assessing Officer's decision without providing adequate opportunity for the appellant to submit their full case, potentially violating principles of natural justice.

IN THE INCOME TAX APPELLATE TRIBUNAL
“D” BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV,
HON’BLE VICE-PRESIDENT
AND
SHRI WASEEM AHMED
HON’BLE ACCOUNTANT MEMBER
ITA.No.1806/Ahd/2019
Asstt.Year: 2015-16

Urmin Marketing P.Ltd.
Now known as
Unicorn Packaging LLP
“Urmin House”, Ground Floor
Sidhu Bhvan Road
Off: S.G.Highway, Bodakdev
Ahmedabad.
PAN : AAACU 9197 R
(Appellant) 
Vs
DCIT, Cir.4(1)(1)
Ahmedabad.
(Respondent)

Assessee by : Shri Aseem Thakkar, AR
Revenue by : Shri Virendra Ojha, CIT-DR

Date of Hearing : 06/08/2020
Date of Pronouncement: 21/10/2020

O R D E R

PER WASEEM AHMED, ACCOUNTANT MEMBER

The above appeal is by the assessee against the order of Commissioner of Income-tax (Appeals)-8, Ahmedabad dated 23.10.2019 passed under section 250(6) of the Income Tax Act, 1961 for the assessment year 2015-16.

2. In the appeal memo, the grounds of appeal raised by the assessee vide ground no.1 to 17 are descriptive and argumentative in nature, which in fact involves only one substantive issue. However, we reproduce the grounds as such stated by the assessee in the appeal memo for the convenience of adjudication of substantive issue. It reads as under:

1. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in computing the total income at Rs.2,56,06,81,0687- as against that of Rs.1,38,88,41,840/-declared by the appellant in the return of income filed on 30/09/2015.

2. The learned Commissioner of Income Tax (Appeals) has erred in passing the appellate order in undue haste without granting adequate opportunity of representation to the appellant Company when the written submissions dtd. 10/10/2019 filed before him specifically stating therein that the written submissions have been filed in part and the balance submissions shall be furnished to you shortly. Hence the order so passed being against the principles of natural justice and law requires to be cancelled.

3. The learned Commissioner of Income Tax (Appeals) has erred in not appreciating the fact that the assessee company had filed written submissions dtd.09/07/2019 and 10/10/2019. He ought to have considered the fact that in both the written submissions it has been specifically stated that the submissions have been made in part and the balance submissions shall be furnished to you shortly.

4. The learned Commissioner of Income Tax (Appeals) has erred in passing appellate order without granting further opportunity or rejecting the request for further time as intimated in the written submissions dtd. 10/10/2019 filed before him.

5. The learned Commissioner of Income Tax (Appeals) has erred in not considering the fact that there was reasonable cause in furnishing the written submissions in part as it was time for completion of audit and filing return of income of the audited cases which are due in the month of October, 2019.

6. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in passing an order u/s.!44C r.w.s.143(3) of the I.T. Act,1961.

7. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making disallowance of claim of depreciation on goodwill of Rs. 1,17,18,39,2287- u/s.32(l) r.w.s.43(l) r.w.s.43(6)(c) r.w.s.49(l)(iii)(e) r.w.s.55(2) (a)(ii) of the I. T. Act, 1961 and expressly clarifying that depreciation on goodwill is not allowable in future years also.

8. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in rejecting the goodwill arising on account of amalgamation Merger of two companies when the amalgamation and the scheme thereof has been approved by the Gujarat High Court.

9. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in holding that the cost of goodwill in the case of amalgamating company is Nil as no asset by way of goodwill appears in the Balance Sheet of the amalgamating company.

10. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in not accepting the method of valuation of goodwill adopted by the appellant.

11. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in holding that the goodwill created in the books of UPPL is the result of the revaluation of the assets of the transferee company as there was no such assets in its books of accounts before amalgamation. Thus the cost of acquisition would stand Nil, as no outflow happened from the company and as per the provision of Income Tax Act depreciation is allowable on the cost of acquisition or WDV both are Nil here.

12. The learned Commissioner of Income Tax (Appeals) has erred in confirming action of the Assessing Officer in holding that the existing business of a group company has been amalgamated with a paper company of the same group only by issue of shares and without any material change in shareholding.

To know more in details find the attachmen file