Urgent need of a case law
Abhishek jain
(Querist) 13 September 2012
This query is : Resolved
Dear Mates
There is a recent judgement of SC for
cit kolkatta vs smif securities ltd on depriciation of goodwill.
Can someone please provide me with a copy of its ITAT JUDGEMENT of this case law.
Please.
Thanks
Anirudh
(Expert) 13 September 2012
You said recent judgment.
For the past 9 months, there are no judgments by SC in the title mentioned by you.
You have to give some more particulars.
ajay sethi
(Expert) 13 September 2012
NO.2 COURT NO.1 SECTION IIIA
S U P R E M E C O U R T O F I N D IA RECORD OF PROCEEDINGSPetition(s) for Special Leave to Appeal (Civil) No(s).35600/2009(From the judgement and order dated 19/02/2008 in ITA No.642/2007of The HIGH COURT OF CALCUTTA)C.I.T., KOLKATA Petitioner(s)VERSUSSMIFS SECURITIES LTD. Respondent(s)(With prayer for interim relief and office report)[For Final Disposal]Date: 22/08/2012 This Petition was called on for hearing today.CORAM :HON'BLE THE CHIEF JUSTICEHON'BLE MR. JUSTICE MADAN B. LOKURFor Petitioner(s) Mr. A.S. Chandhiok,ASG.Mr. R.P. Bhatt,Sr.Adv.Mr. Gurpreet S. Parwanda,Adv.Mr. Rahul Kaushik,Adv.Ms. Sonia Mathur,Adv.Ms. Anil Katiyar,Adv.for Mr. B.V. Balaram Das,Adv.For Respondent(s) Mr. Partha Sil,Adv. (N/P)UPON hearing counsel the Court made the followingO R D E RNone appears for the respondent, though served.Heard learned counsel for the Department.Leave granted.The civil appeal filed by the Department stands dismissedwith no order as to costs.[ T.I. Rajput ] [ Indu Satija ]A.R.-cum-P.S. Court Master[Signed order is placed on the file]
IN THE SUPREME COURT OF INDIACIVIL APPELLATE JURISDICTIONCIVIL APPEAL NO.5961 OF 2012(Arising out of S.L.P. (C) No.35600 of 2009)Commissioner of Income Tax, Kolkata ...Appellant(s)VersusSmifs Securities Ltd. ...Respondent(s)O R D E RNone appears for the respondent, though served.Heard learned counsel for the Department.Leave granted.This civil appeal concerns the Assessment Year 2003-2004. Three questionsarise for determination by this Court. They are as follows:Question No.[a]:"Whether Stock Exchange Membership Cards are assets eligible fordepreciation under Section 32 of the Income Tax Act,1961? Whether,on the facts and in the circumstances of the case, deletion ofRs.53,84,766/- has been made correctly?"Answer:Learned Additional Solicitor General fairly concedes that the said questionis covered by the decision of this Court in the case of Techno Shares andStocks Limited vs. Commissioner of Income Tax, reported in [2010] 327I.T.R. 323, in favour of the assessee.Question No.[b]:
"Whether goodwill is an asset within the meaning of Section 32 of theIncome Tax Act, 1961, and whether depreciation on `goodwill' is allowableunder the said Section?"Answer:In the present case, the assessee had claimed deduction ofRs.54,85,430/- as depreciation on goodwill. In the course of hearing, theexplanation regarding origin of such goodwill was given as under:"In accordance with Scheme of Amalgamation of YSN Shares & Securities (P)Ltd with Smifs Securities Ltd (duly sanctioned by Hon'ble High Courts ofBombay and Calcutta) with retrospective effect from 1st April, 1998,assets and liabilities of YSN Shares & Securities (P) Ltd were transferredto and vest in the company. In the process goodwill has arisen in thebooks of the company."It was further explained that excess consideration paid by theassessee over the value of net assets acquired of YSN Shares andSecurities Private Limited [Amalgamating Company] should be considered asgoodwill arising on amalgamation. It was claimed that the extraconsideration was paid towards the reputation which the AmalgamatingCompany was enjoying in order to retain its existing clientele.The Assessing Officer held that goodwill was not an asset falling underExplanation 3 to Section 32(1) of the Income Tax Act, 1961 [`Act',forshort].We quote hereinbelow Explanation 3 to Section 32(1) of the Act:"Explanation 3.-- For the purposes of this sub-section, theexpressions `assets' and `block of assets' shall mean--[a] tangible assets, being buildings, machinery, plant orfurniture;[b] intangible assets, being know-how, patents, copyrights,trademarks, licences, franchises or any other business orcommercial rights of similar nature."Explanation 3 states that the expression `asset' shall mean anintangible asset, being know-how, patents, copyrights, trademarks,licences, franchises or any other business or commercial rights ofsimilar nature. A reading the words `any other business or commercialrights of similar nature' in clause (b) of Explanation 3 indicates thatgoodwill would fall under the expression `any other business orcommercial right of a similar nature'. The principle of ejusdem generiswould strictly apply while interpreting the said expression which findsplace in Explanation 3(b).In the circumstances, we are of the view that `Goodwill' is an assetunder Explanation 3(b) to Section 32(1) of the Act.One more aspect needs to be highlighted. In the present case, theAssessing Officer, as a matter of fact, came to the conclusion that noamount was actually paid on account of goodwill. This is a factualfinding. The Commissioner of Income Tax (Appeals) [`CIT(A)', for short]has come to the conclusion that the authorised representatives had filedcopies of the Orders of the High Court ordering amalgamation of the
above two Companies; that the assets and liabilities of M/s. YSN Sharesand Securities Private Limited were transferred to the assessee for aconsideration; that the difference between the cost of an asset and theamount paid constituted goodwill and that the assessee-Company in theprocess of amalgamation had acquired a capital right in the form ofgoodwill because of which the market worth of the assessee-Companystood increased. This finding has also been upheld by Income TaxAppellate Tribunal [`ITAT', for short]. We see no reason to interfere withthe factual finding.One more aspect which needs to be mentioned is that, against the decisionof ITAT, the Revenue had preferred an appeal to the High Court in which ithad raised only the question as to whether goodwill is an asset underSection 32 of the Act. In the circumstances, before the High Court, theRevenue did not file an appeal on the finding of fact referred tohereinabove.For the afore-stated reasons, we answer Question No.[b] also in favour ofthe assessee.Question No.[c]:The last question raised in this civil appeal is regardingcancellation of disallowance of an amount of Rs.83,02,976/- as a baddebt.Answer:It has been stated on behalf of the Revenue that, since the Tax AuditReport indicated the amount to have been incurred on capital account,the assessee was not entitled to deduction on account of bad debt Boththe CIT(A) as well as the ITAT concluded that the assessee has satisfiedthe provisions of Section 36(1)(vii) of the Act. They have held thatbad debt claimed by the assessee was incurred in the normal course ofbusiness and, therefore, the assessee was entitled to deduction underSection 36(1)(vii) of the Act. It is well-settled now by a catena ofdecisions that the manner in which the assessee maintains its accounts isnot conclusive for deciding the nature of expenditure.In the present case, the concurrent finding of facts recorded by theauthorities below indicate that the assessee was entitled to claimdeduction in the course of business under Section 36(1)(vii) of the Act.For the afore-stated reasons, we answer all the three questions in favourof the assessee and against the Revenue. The civil appeal filed by theDepartment stands dismissed with no order as to costs..........................CJI.[S.H. KAPADIA]...........................J.[MADAN B. LOKUR]New Delhi,August 22, 2012.
Abhishek jain
(Querist) 13 September 2012
Hi i am soory if i could not reach to you clearly.
Anirudh and Ajay sethi thanks for the instant reply .
But i HAVE the SC and HIGH COURT Judgements but i need the judgement which ITAT KOLKATA had given in this particular case prior to judgements of HC and SC.
Thanks
