ITAT: Allows depreciation on goodwill claimed during assessment sans filing revised return

Ahmedabad ITAT dismisses Revenue’s appeal for AY 2010-11, allows depreciation on ‘goodwill’ claimed by the assessee – company during the course of assessment proceedings vide a revised computation of income without filing revised return of income; Notes that pursuant to the scheme of arrangement approved by Gujarat HC in AY 2008-09, assessee had acquired the consumer products division and other related intangible assets of the such business which was accounted for as “goodwill” in its books of accounts; Pursuant to subsequent SC ruling in Smifs Securities Ltd., assessee claimed depreciation on goodwill arising on amalgamation which was denied by the AO on the ground that assessee did not file revised return of income to make a “rightful” claim; ITAT follows Bombay HC ruling in Pruthvi Brokers and Shareholders wherein it was held that the AO is bound to entertain rightful claim of deduction made otherwise than by filing a revised return of income; Separately applying the principle of consistency also allows depreciation on non-compete fees, relies on coordinate bench ruling  Medicorp Technologies Pvt. Ltd. and Pune ITAT ruling in Serum Institute of India Ltd., also takes note of Revenue’s reliance on Delhi HC ruling in Sharp Business System:ITAT

The ruling was delivered by ITAT Bench of Shri. R.P Tolani and Shri. Manish Borad. Mr. M. M. Patel with Jigar M. Patal argued on behalf of the assessee while Revenue was represented by Mr. R.I Patel.