Goodwill from amalgamation of related subsidiaries is artificial if lacking commercial substance; depreciation disallowed. Buyback tax computed on face value of shares issued without cash, rejecting inflated amalgamation valuations as colourable devices.

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.63/PUN/2020 Assessment Year : 2015-16 Aptara Technologies DCIT, Circle-1(1), Private Limited, Vs. Pune Flat No.A-16, Garnet Residency, S.No.9-13, 14 & 15, Wanawadi, Pune 411040 Maharashtra PAN : AAJCA0199G Appellant Respondent Appellant by : Shri Percy Pardiwalla Respondent by : Shri Amol Khairnar Date of hearing : 03.12.2025 Date of pronouncement : 17.02.2026 आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 20.12.2019 framed by CIT(A), Pune-1 arising out of Assessment Order dated 26.12.2017 passed u/s.143(3) of the Income Tax Act, 1961.

2. Assessee has raised following grounds of appeal :

“The grounds hereinafter taken by the Appellant are without prejudice to one another

1:0 Re.: Disallowance of depreciation on 'Goodwill' u/s. 32 of the Income-tax Act, 1961:

1:1 The Commissioner of Income-tax (Appeals) has erred in confirming the disallowance of depreciation of Rs.1,49,30,000/- on 'Goodwill' of Rs.5,97,20,000/- u/s. 32 of the Income-tax Act, 1961.

1:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, depreciation is allowable on goodwill and the stand taken by the Assessing Officer is illegal, incorrect, erroneous and misconceived and not in accordance with law and the Commissioner of Income-tax (Appeals) ought to have held as such.

1:3 The Appellant submits that the Assessing Officer be directed to delete the disallowance made by him and to re-compute its total income accordingly.

2:0 Re.: Levying of Buy Back Tax u/s. 1150A of the Income-tax Act, 1961:

2:1 The Commissioner of Income-tax (Appeals) has erred confirming the levy of Buy Back Tax u/s.115QA of the Income-tax Act, 1961 of Rs.99,57,776/-.

2:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, tax u/s. 115QA of the Income-tax Act, 1961 is not leviable in the instant case, and the action of the Assessing Officer is illegal, incorrect, erroneous and misconceived and the Commissioner of Income-tax (Appeals) ought to have held as such.

2:3 The Appellant submits that the Assessing Officer be directed to delete the erroneous levy of Buy Back Tax u/s.115QA of the Income- tax Act, 1961 of Rs.99,57,776/-levied by him and to re-compute its tax liability accordingly.

3:0 Re.: Deduction in respect of 'Education Cess on income-tax' and 'secondary and higher education cess on income-tax' (collectively referred to as 'education cess in income-tax') payable for the year under consideration, while computing the total income of the Appellant:

3:1 The Assessing Officer has erred in not allowing a deduction for the 'education cess on income-tax payable for the year under consideration.

3:2 The assessee submits that considering the facts and circumstances of its case and the law prevailing on the subject, 'education cess on income-tax' for the year under consideration, though not claimed as a deduction by the assessee while filing its return of income for the year under consideration, ought to have been allowed while assessing its income for the year under consideration.

3:3 The asse