Nma/1742/2012 Of Taj Sats Air Catering Limited v. The Commissioner Of Income Tax, 2, Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.1742 OF 2012 IN INCOME TAX APPEAL (LODGING) NO.1096 OF 2012 Taj Sats Air Catering LimitedV/s.The Commissioner of Income Tax-2,Mumbai ....Appellant ....Respondent Mr.Jas Sanghavi i/b PDS Legal for the Appellant. Mr.P.C. Chhotaray for the Respondent. CORAM : S.J. VAZIFDAR AND M.S. SANKLECHA, JJ.DATE : 13TH AUGUST, 2012. P.C. :- 1.This is a notice of motion for condonation of a delay of 1195 days in filing the above appeal. Although the delay is substantial, we are inclined to condone it in the facts and circumstances of the present case. 2.The depreciation had been claimed by the appellant inter-alia in respect of the goodwill. The Tribunal in the impugned order inter-alia observed as under :- “This evidence in our humble opinion goes into the root of the matter. From the assessment order it can be clearly seen that the assessing officer had noticed from the recitals in the business transfer agreement, that intellectual properties which are listed out in Article 1. Sub clause b have been transferred along with other movable and immovable assets. Even article 2. Sub clauses b and e mentioned a list of intangible assets, which have been aggregated and loosely termed as “goodwill” by the assessee in its books of account. Thus the fact that slump sale consists of many intangible assets along with goodwill is not in dispute. It is true that no depreciation is allowable on goodwill. But at the same time, the legislature provides that depreciation should be allowed on all other intangible assets other than Goodwill. The assessee’s additional evidence throws light on the valuation of each of the intangible assets. Such evidence goes into the root of the matter for the purpose of arriving at a decision as to whether the assessee is entitled for deduction u/s 32(1)(ii) of the Act and if so, the quantum of depreciation that he is entitled to. Thus, we admit this additional evidence and remit the matter back to the file of the assessing office for fresh adjudication in accordance with law.” 3.We will presume that the effect of the order is that the depreciation in respect of the goodwill was not permissible, although it was permissible in respect of other intangible assets. We will also presume that the appellant misconstrued the order by assuming that the order was remitted back to the file of the AO for fresh adjudication including on the question of goodwill. We are however, unable to state that this alleged misconstruction of the order was mala-fide or negligent. Even if the effect of the order was as contended by the Department, we cannot rule out the possibility of it being open to the appellant to challenge even the rejection of depreciation on goodwill nma1742-12 from the final order that is passed upon the remand. This aspect however, can be decided at the final hearing of the admission of the appeal or at the hearing of the appeal itself, if admitted. Moreover, the question as to whether the depreciation on goodwill is permissible has also been raised by the appellant in the orders subsequently passed. This is not denied. The same indicates that the appellant never intended giving up the challenge in respect of this issue. This appeal was filed in view of the Department having raised this contention in proceedings relating to the other assessment years. 4.In the circumstances, it would be unjust to reject the appeal on the ground of delay. 5.The notice of motion is therefore, made absolute in terms of prayer (a). (M.S. SANKLECHA, J.) (S.J. VAZIFDAR, J.)