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IN THE INCOME TAX APPELLATE TRIBUNAL "B", BENCH KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.1663/Kol/2016 ( नधारणवष / Assessment Year:2011-12) ACIT, Circle-11(2), Kolkata Vs. M/s Shristi Infrastructure Development Corporation Ltd.

Plot no. X-1, 2 & 3, Block-EP, Sector-V, Salt Lake City, Kolkata-

700091 थायीले खासं . /जीआइआरसं . /PAN/GIR No.: AABCP 5074 F (Appellant) .. (Respondent) (Arising out of आयकरअपीलसं./ITA No.1663/Kol/2016) ( नधारणवष / Assessment Year:2011-12) M/s Shristi Infrastructure Vs. ACIT, Circle-11(2), Kolkata Development Corporation Ltd.

Plot no. X-1, 2 & 3, Block-EP, Sector-V, Salt Lake City, Kolkata-700091 थायीले खासं . /जीआइआरसं . /PAN/GIR No.: AABCP 5074 F (Cross objector) .. (Respondent) Appellant by : Shri Robin Choudhury, Addl. CIT (DR) Respondent by : Shri S. M. Surana, Advocate सुनवाईक तार ख/ Date of Hearing : 23/07/2019 घोषणाक तार ख/Date of Pronouncement : 25/09/2019 Shristi Infrastructure Development Corporation Ltd. I TA No .1 6 6 3 / Ko l /2 0 1 6 & C . O. No . 5 9 / Ko l /2 0 1 6 A s se s smen t Yea r: 2 0 1 1 - 1 2 आदे श / O R D E R Per Dr. A. L. Saini:

As informed in our earlier hearings, the erstwhile Shristi Infrastructure Development Corporation (having its registered office at Delhi) had merged into Peerless Abasan Finance Limited (PAFL) as per order of both Hon'ble High Court at Delhi & Hon'ble High Court at Kolkata and then the name PAFL was changed to Shristi Infrastructure Development Corporation Ltd. As per the amalgamation scheme, the difference between the cost of the net assets and the amount paid by the transferee company, pursuant to amalgamation, has been recorded as goodwill. Hence, based on the aforesaid, a sum of INR 100,000,000 has been recorded as goodwill in the books of SIDCL during F. Y. 2006-07.The Hon'ble SC has, in the case of SMIFS Securities (2012)24 taxmann.com 222(SC) held that goodwill in the form of difference between the amount paid and the cost of the net asset acquired from the amalgamating company is an asset eligible for depreciation under the Act. The ruling of SMIFS securities has also been followed by the Bombay High Court in the case of Birla Global Asset Finance Co. Ltd (Income Tax Appeal No. 6835 of 20 10) and Toyo Engineering India Ltd (TS-811-HC-20 12BOM). Goodwill has arisen in the books of SIDCL in the FY 2006-07. The company has not claimed depreciation on goodwill in any Assessment Year prior to A. Y. 11-12.

11. The ld. DR has primarily reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and the same is not being repeated for the sake of brevity.On the other hand, the ld. Counsel for the assessee defended the order passed by ld CIT(A).

12.We have heard both the parties and perused the material available on record. We note that pursuant to scheme of amalgamation approved by the Hon'ble High court of Delhi on 22nd May, 2007 and Hon'ble Calcutta High Court on 20th June, 2007, the erstwhile Shristi Infrastructure Development Corporation Ltd. merged with Peerless Abasan Finance Ltd. (PAFL). Post-merger, the name of Peerless Abasan Finance Ltd. was changed to Shristi Infrastructure Development Corporation Ltd. In terms of the Scheme of amalgamation, the purchase consideration paid by PAFL to erstwhile Shristi Infrastructure Development Corporation Ltd. exceeded the cost of net assets taken over. Consequently, a sum of INR 100,000,000 was recorded as goodwill in the books of the assessee during the FY 2006-07.For the assessment year under consideration, the assessee filed a revised return of income and claimed depreciation on goodwill recorded in books at the rate of 25% being an eligible asset in terms of section 32(1) of the Act. We note that by going through the provisions of section 32(1) of the Act there remains no ambiguity that depreciation is allowable on Goodwill which can be classified under the category of 'any other business or commercial rights of similar nature'. This view is supported by the decision of the Hon'ble Supreme court in the case of the CIT vs. Smits Securities Ltd. [2012] 24 taxmann.com 222 (SC). We note that the decision of Supreme Court has also been followed in the following decisions wherein it was held that depreciation is allowable on goodwill arising on merger: