PMV MALTINGS PVT LTD vs DY. COMMISSIONER OF INCOME TAX, CIRCLE 19(1) & ANR.

Judgment text excerpt

$~3 & 4 * IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment delivered on: 20.02.2025 + ITA 363/2023 PMV MALTINGS PVT LTD .....Appellant Through: Mr. Satyen Sethi, Mr. Artatrana Panda & Ms. Gargi Sethee, Advs. versus DY. COMMISSIONER OF INCOME TAX, CIRCLE 19(1) & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar & Mr. Rishabh Nangia, JSCs. 4 + ITA 366/2023 PMV MALTINGS PVT LTD .....Appellant Through: Mr. Satyen Sethi, Mr. Artatrana Panda & Ms. Gargi Sethee, Advs. versus DY COMMISSIONER OF INCOME TAX, CIRCLE 19(1) & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar & Mr. Rishabh Nangia, JSCs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR JUDGMENT YASHWANT VARMA, J. (Oral) 1. This appeal instituted by the appellant/assessee had come to be ITA 363/2023 & 366/2023 Page 1 of 14 Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:01.03.2025 12:33:05 admitted by us on 12 July 2023 on the following question of law: “Whether disallowance of depreciation claimed on goodwill under Section 32, albeit post demerger was sustainable in law?” 2. The Court, on that, occasion had noted that goodwill was undisputedly eligible for depreciation in the period in question in light of the judgment rendered in Commissioner of Income Tax, Kolkata v. Smifs Securities Ltd.1 The aforesaid observation appears to have been rendered in light of the subsequent amendments which came to be incorporated in Section 32 of the Income Tax Act, 19612 [‘Act’] and more particularly the Finance Act, 2021 in terms of which the phrase „not being goodwill of a business or profession‟ came to be inserted. 3. We are thus concerned with a period where Section 32(1) stretched the principle of depreciation