In a recent decision dated 18.12.2023, the Income Tax Appellate Tribunal, Mumbai has in Vodafone India Services Pvt. Ltd. v. DCIT, Central Circle-4(1)(2), I.T.A. No. 2241/Ahd/2018, held that, where facts pertaining to deduction were pleaded by Assessee before AO during assessment proceedings, but the same was not claimed in return of income, then Appellate Authority and Tribunal are empowered to entertain the claim.
The facts of the case, in brief, were that, Appellant filed return of income which was selected for scrutiny. In the course of assessment proceeding, the Appellant raised claim of depreciation on goodwill acquired under slump sale of Call Centre Business of Vodafone Essar Gujarat Ltd. However, the AO did not allow the said claim, which was confirmed by CIT(A). On second appeal, before the Tribunal, Department contended that, depreciation on goodwill was not allowable to Appellant since the same was not claimed in return of income filed for the relevant period, but only claimed during course of assessment proceedings. To substantiate their contention, the Department placed reliance on decision of Supreme Court in Goetze India Ltd. v. CIT (2006) 284 ITR 323.
The Tribunal, analyzing the decision of Supreme Court in Goetze (supra) observed that, Court had categorically held that issue in case is limited to power of the assessing authority to entertain a claim for deduction otherwise than by filing a revised return, and does not impinge on the power of the Income Tax Appellate Tribunal under Section 254 of the Income Tax Act.
In view of the above reasoning, the Hon’ble Tribunal held that the powers of the Ld. CIT(A) being the first appellate authority as well as this Tribunal are wide enough to entertain the appellant’s plea for depreciation on goodwill, which had not been claimed in the return of income, but relevant facts on the issue was placed before the AO.
