1
Aramark India P Ltd
ITA 3839/M/2013
""
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "A", MUMBAI
,
,
BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER
AND SHRI AMIT SHUKLA, JUDICIAL MEMBERITA
ITA No. : 3839/Mum/2013
(Assessment year: 2009-10)
Aramark India P Ltd, Vs Income Tax Officer- 6(1)(3),
437-438, Sector -4, Ghansoli, Mumbai
Navi Mumbai -400 701
.:PAN: AAGCA 4383 F
(Appellant) (Respondent)
Appellant by : Ms Aarti Vissanji
Respondent by : Shri Sachidanand Dube
/Date of Hearing : 25-02-2015
/Date of Pronouncement : 01-05-2015
ORDER
, :
PER AMIT SHUKLA, JM:
The aforesaid appeal has been filed by the assessee against
the order dated 22.02.2013 passed by CIT(A) -14, Mumbai for the
quantum of assessment passed u/s 144 for the AY 2009-10. In the
grounds of appeal, no. 1 to 5, the assessee has mainly challenged
the assessment order passed by the AO u/s 144 on various
counts. Besides this, the assessee has raised following as
additional grounds which is on merits.
"Petitioner Company prays that depreciation on goodwill be
allowed for the Assessment Year 2009-10. Goodwill of Rs.
28,79,57,469/- was written off during the Assessment Year in
question. The depreciation at 25% on WDV basis was not
claimed in the nature filed. Thus a plea is filed to allow such
amount of depreciation to the Petitioner Company".
2. The facts in brief are that, the assessee is a subsidiary of
Aramark Corporation USA, engaged in the business of rendering
integrated food and facility management to Corporate customers in
India.
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Aramark India P Ltd
ITA 3839/M/2013
3. Before us, the Ld. Counsel submitted that, so far as the
issue of depreciation on goodwill, relevant facts are that the
assessee company had entered into an agreement with three group
companies of the Patman Group for acquiring the goodwill,
business and other rights. In consideration, the assessee company
had paid a sum of Rs. 29,56,32,498/- towards acquiring of
goodwill, business rights etc. Such a payment was made towards
the end of the year ending on 31.03.2008, hence the benefit of the
depreciation on goodwill was to be claimed from AY 2009-10.
However, the assessee had written off the amount of goodwill in the
books in the AY 2011-12. Thus the depreciation on the same was
to be claimed from the AY 2009-10. Particulars of value of goodwill,
amount of depreciation claimed and WDV was given in the
following manner:
Particulars Amount in INR
Value of Goodwill 287,957,469
Depreciation for FY 2007-08 Not claimed as
Payment was delayed
WDV for 31st March 2008 287,957,469
Depreciation for FY 2008-09 71,989,367
unclaimed
WDV for 31st March 2009 215,968,102
Depreciation for FY 2009-10 53,992,025
WDV for 31st March 2010 161,976,076
Dep. For FY 2010-11 40,494,019
WDV for 31st March 2011 121,482,057
Depreciation for FY 2011-12 30,370,514
Thus the depreciation on goodwill was to be claimed from AY
2009-10, @ 25% of WDV, which could not be claimed, hence such
claim should be allowed. Now in view of the decision of Hon'ble
Supreme Court in the case of CIT vs. Smiff Securities Ltd [2012]
348 ITR 302, it is quite settled that depreciation is allowable on
goodwill.
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Aramark India P Ltd
ITA 3839/M/2013
4. Regarding various other grounds challenging the best
judgment assessment order passed u/s 144, no argument has
been put forth by the Ld. Counsel before us.
5. Ld. DR submitted that so far as the issue raised from the
ground No. 1 to ground no. 5, the Ld. CIT(A) has given very
detailed reasons justifying the action of the AO for passing the
order u/s 144 and making the best judgment assessment. Thus,
the grounds raised by the assessee in the absence of any proper
rebuttal should be dismissed.
6. Regarding depreciation on goodwill, he submitted that since
this issue has not been raised by the assessee before the
authorities below, therefore, same should be restored back to the
file of the CIT(A) or AO.
7. After considering the rival submissions and on perusal of the
impugned orders, we find that so far as the issue regarding
passing of best judgment assessment u/s 144, the Ld. CIT(A) has
dealt, with the entire objections of the assessee in a very detailed
manner and there being no proper rebuttal submissions before us,
we do not find any reason from deviating from such finding of the
CIT(A). Accordingly, Ground no. 1 to Ground no. 4 is treated as
dismissed.
8. So far as Ground no. 5 is concerned, the assessee has raised
the contention that the Ld. CIT(A) has erred in upholding the
initiation of penalty proceedings u/s 271A, the same is pre-mature
as the assessee can raised the objections before the AO at the time
of penalty proceedings. Hence, Ground no. 5 is dismissed.
9. As regard the issue raised in additional ground, we find that
the same is purely a legal ground, arising out of the facts available
on record and accordingly, the same is admitted. The issue,
whether the depreciation on goodwill is allowable or not, the same
stands concluded by the decision of Hon'ble apex Court in the case
of Smiff Securities Ltd (supra), wherein the Hon'ble Supreme Court
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Aramark India P Ltd
ITA 3839/M/2013
held that goodwill is an asset under the expression used in
Explanation 3(b) to section 32(1) and therefore, depreciation is
allowable on such an asset. Thus, the depreciation on the goodwill
should be allowed. However, the facts regarding computation of
WDV and the amount of depreciation, which is to be allowed in the
assessment year 2009-10, needs verification at the end of the AO,
therefore, this matter is restored back to the file of the AO to
examine the contention of the assessee and allow the claim of
depreciation in accordance with the Supreme Court decision.
Accordingly, additional ground raised by the assessee is partly
allowed for statistical purposes.
10. In the result, appeal of the assessee is partly allowed for
statistical purposes.
Order pronounced in the open court on 1st May, 2015.
Sd/- Sd/-
( ) ( )
(SANJAY ARORA) (AMIT SHUKLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 1st May, 2015
/Copy to:-
1) /The Appellant.
2) /The Respondent.
3) The CIT(A) -14, Mumbai.
4) The CIT-6, Mumbai/CIT -6, Mumbai.
5) "", , /
The D.R. "A" Bench, Mumbai.
6)
Copy to Guard File.
/By Order
/ / True Copy / /
/
,
Dy./Asstt. Registrar
I.T.A.T., Mumbai
* ..
*Chavan, Sr.PS
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