Claim of depreciation on goodwill and intangible assets - post facto court approved amalgamation scheme 

Facts :

Assessee as part of a court approved scheme of amalgamation, the company Rohm and Hass (India) Private Ltd (RHIPL) was merged with the assessee in the AY 2016-17. There were certain intangible assets acquired as part of the "purchase method" of the merger in the hands of the assessee. Assessee claimed depreciation on these intangibles goodwill, customer relations, distribution network etc. AO and CIT(A) disallowed the same citing that there were no intangible assets which were found in the books of the amalgamating company RHIPL. Thus assessee was ineligible to claim any depreciation. Assessee pleaded that vide Smifs Securities Ltd (2012) 348 ITR 302 (SC) : 2012 TaxPub(DT) 2430 (SC) depreciation was allowable on goodwill and on such intangibles. On higher appeal by the assessee -

Held against the assessee by remanding the case to the AO for de novo consideration as the first year of depreciation claim on the intangibles in the earlier assessment year AY 2016-17 itself was under appeal - accordingly the claim will need to be dealt in line with the outcome of the said earlier year appeal.

Case : Dow Chemical International (P) Ltd. v. Dy. CIT 2023 TaxPub(DT) 5571 (Mum-Trib)