Bhagwati Banquets & Hotels Ltd.,, ... vs Department Of Income Tax

आयकर अपील सं./I.T.A. No.2123/Ahd/2011 ( नधा रण वष / Assessment Year : 2008-09) The DCIT बनाम/ M/s.Bhagwati Banquets & Ahmedabad Circle-1 Vs. Hotels Ltd. Ahmedabad 73, White House Panchwati Ellisbridge,Ahmedabad

थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AABCB 6825 A (अपीलाथ# /Appellant) .. ($%यथ# / Respondent)

अपीलाथ# ओर से / Appellant by : Shri M.K.Singh, Sr.DR $%यथ# क' ओर से/Respondent by : Shri S.N. Divatia, AR

ु वाई क' तार*ख / सन Date of Hearing 24/03/2015 घोषणा क' तार*ख /Date of Pronounce ment 10/04/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-VI, Ahmedabad ('CIT(A)' in short) dated 24/06/2011 pertaining to Assessment Year (AY) 2008-09. The Revenue has raised the following grounds of appeal:-

ITA No. 2123/Ahd/2011 DCIT vs. M/s. Bhagwati Banquets & Hotels Ltd.

Asst.Year - 2008-09 -2-

1. The Ld.CIT(A) erred in law and on facts in deleting the addition of Rs.1,09,88,126/- made on account of disallowance of depreciation on goodwill.

On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer to the extent mentioned above, since the assessee has failed to disclose his true income.

The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO be restored. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.

2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 21/12/2010. While framing the assessment, the AO made various disallowances including disallowance of depreciation on goodwill amounting to Rs.1,09,88,126/-. Aggrieved by the assessee, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee partly allowed the appeal by observing that for the AY 2007- 08 has been decided by order dated 18/03/2011 in which assessee's claim of depreciation is allowed. Now, the Revenue is in appeal before us.

3. The ld.Sr.DR supported the order of the AO and submitted that the ld.CIT(A) was not justified in deleting the addition of Rs.1,09,88,126/-.

ITA No. 2123/Ahd/2011 DCIT vs. M/s. Bhagwati Banquets & Hotels Ltd.

Asst.Year - 2008-09 -3-

3.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench (ITAT 'C' Bench Ahmedabad) in ITA No.1312/Ahd./2011 for AY 2007-08 vide order dated 28/02/2012 and also the decision of Coordinate Bench (ITAT 'C' Bench Ahmedabad) in ITA No.1549/AHD/2012 for AY 2009-10 vide order dated 02/11/2012.

4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the Hon'ble Coordinate Bench in ITA No.1312/Ahd./2011 for AY 2007-08(supra) has recorded the ground raised in appeal in para-2 of its order which reads as under:-

"2. The Revenue has raised a solitary ground to the effect that "the CIT(A) erred in deleting the addition of Rs.1,46,50,834/- made on account of disallowance of depreciation on goodwill."

4.1. The Hon'ble Coordinate Bench after considering the submissions of the parties has decided this issue in para-5.9 by holding as under:

"5.9. In view of the facts and circumstances of the issue as deliberated upon in the foregoing paragraphs and also in conformity with the ruling of various judiciaries, chiefly, the ruling of the Hon'ble High Court of Kerala referred supra, we are of the considered view that the CIT(A) was justified in holding that the assessee was eligible for depreciation on intangible assets acquired by it. It is ordered accordingly. We make it very clear that we have arrived at this above conclusion from the facts of this ITA No. 2123/Ahd/2011 DCIT vs. M/s. Bhagwati Banquets & Hotels Ltd.

Asst.Year - 2008-09 -4-

case as the valuation report submitted by the appellant has not been successfully challenged by the Revenue to establish the transaction to be sham. Therefore, we consider the payment made on account of goodwill is genuine and reasonable since it is arrived based on a reasonable valuation and computation."

4.2 The decision of the Coordinate Bench has been followed by another Coordinate Bench in assessee's own case for AY 2008-09, i.e. in ITA No.1549/Ahd/2012, order dated 02/11/2012. In the present year also, the only ground raised by the Revenue is against the deletion of addition of Rs.1,09,88,126/- made on account of disallowance of depreciation on goodwill. Since the facts and circumstances are identical to the facts of the case in AY 2007-08 and AY 2009-10 (in ITA No.1312/Ahd/2011 and ITA No.1549/Ahd/2012 respectively), therefore we see no reason to take a different view than taken by the Coordinate Bench in earlier years, this ground of Revenue's appeal is rejected.

5. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Court on Friday, the 10th day of April, 2015 at Ahmedabad.

Sd/- Sd/- (एन.एस.सैनी) (कुल भारत) लेखा सद य या यक सद य ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 10/ 04 /2015 ट*.सी.नायर, व. न.स./T.C. NAIR, Sr. PS ITA No. 2123/Ahd/2011

DCIT vs. M/s. Bhagwati Banquets & Hotels Ltd.

Asst.Year - 2008-09 -5-

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ# / The Appellant

2. $%यथ# / The Respondent.

3. संबं4धत आयकर आयु6त / Concerned CIT

4. आयकर आय6 ु त(अपील) / The CIT(A)-VI, Ahmedabad

5. 7वभागीय $ त न4ध, आयकर अपील*य अ4धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड; फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स%या7पत $ त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 24.3.15 (dictation-pad 5- pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ..27.3.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......10.4.15

7. Date on which the file goes to the Bench Clerk.....................10.4.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................