The case ITA 601/DEL/2021 involves an appeal by Aricent Technologies (Holdings) Ltd., New Delhi, against the assessment order passed by the Additional Commissioner of Income Tax, Special Range-1, New Delhi, for the assessment year 2016-17. The appeal addresses issues related to the disallowance of depreciation on goodwill, ESOP expenses, and other related matters.
The details of the case are as follows:
The case was heard on 07.10.2021 before the Delhi Bench ‘D’ of the Income Tax Appellate Tribunal (ITAT) through video conferencing, comprising Accountant Member Shri R.K. Panda and Judicial Member Shri Sudhanshu Srivastava. The appellant was represented by Sh. Ajay Vohra, Sr. Adv., Sh. Neeraj Jain, Adv., and Sh. Saksheem Singhal, Adv. The respondent was represented by Mrs. Meenakshi Singh, CIT-DR.
The appellant raised several grounds in the appeal, primarily challenging the final assessment order dated 31.03.2021 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961. The key issues included the disallowance of depreciation on goodwill, disallowance of ESOP expenses, non-granting of deduction on profit on sale of assets, and other related matters.
The appellant, Aricent Technologies (Holdings) Ltd., is engaged in the business of developing packaged software, providing software consulting services, and trading in telecommunication testing equipment. The return of income for the year was filed declaring an income of Rs. 2,77,08,55,770/- and the case was selected for scrutiny under CASS guidelines. The total income was computed at Rs. 3,46,90,96,220/- after making certain additions and disallowances.
The Revenue supported the assessment order, contending that the disallowances and additions made by the Assessing Officer were justified.
The Tribunal, after hearing both parties and reviewing the evidence, ruled as follows:
The Tribunal found that the issue of disallowance of depreciation on goodwill was covered in favor of the appellant by the Tribunal’s orders in the appellant’s own case for assessment years 2008-09 to 2015-16. The Tribunal allowed the claim of depreciation on goodwill for the assessment year 2016-17, following the same reasoning.
The Tribunal noted that similar disallowances were made in the previous assessment years 2014-15 and 2015-16, which were deleted by the Tribunal. The Tribunal followed the same reasoning and allowed the deduction of ESOP expenses.
The Tribunal directed the Assessing Officer to verify the claim of the appellant regarding the deduction of profit on sale of assets and rectify the computation of income accordingly. This ground was allowed for statistical purposes.
The Tribunal directed the Assessing Officer to verify and grant the MAT credit of Rs. 29,10,99,501/- and rectify the short credit of TDS amounting to Rs. 2,69,530/- after due verification.
The ground related to the charging of interest under sections 234B and 234C was considered consequential and did not require specific adjudication.
Based on the arguments presented and the evidence provided, the Tribunal ruled in favor of the appellant on most grounds, directing the Assessing Officer to rectify the computation of income and grant appropriate credits as claimed by the appellant.
Order pronounced on 04.01.2022.
R.K.PANDA
ACCOUNTANT MEMBER
SUDHANSHU SRIVASTAVA
JUDICIAL MEMBER
Dated: 04/01/2022
PK/Ps / rkk
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR
Assistant Registrar, ITAT, New Delhi
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