ORDER 

PER S. RIFAUR RAHMAN, AM :

1. These appeals are filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi[“Ld. CIT(A)”, for short] dated 14.05.2025 for the Assessment Years 2017-18 and 2018-19.

2. Since the issues are common and the appeals are connected, hence the same are heard together and being disposed off by this common order. For the sake of brevity, we are taking the appeal for the Assessment Year 2017-18 as lead case.

3. Brief facts of the case are, assessee is a private limited company engaged in the business of import, export and trading of steel and allied products. Assessee filed is return of income for AY 2017-18 on 29.11.2017 declaring total income of Rs.12,19,83,430/-. The case was selected for scrutiny and statutory notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short ‘the Act’) were issued and served on the assessee. In response, assessee filed various details as asked for.

4. After considering the submissions of the assessee, the AO observed that assessee has claimed depreciation on goodwill to the extent of Rs.36,12,964/-. In response, assessee submitted the details of tangible and intangible assets and submitted details of determining goodwill and heavily relied on the decision of CIT vs. Smifs Services Limited 348 ITR 302. The issue under consideration is similar to the issues raised in AYs 2011-12, 2012-13 and 2013-14 and in those assessment years, the claim of the assessee was allowed. After considering the submissions of the assessee, the AO rejected the same and observed that the goodwill is intangible asset but it has to be valued for the purpose of accounting. Assessee has not submitted any valuation report of asset of metal division of Mitsubishi Corporation India Limited, therefore, the above additional payment has not been made on account of goodwill. He further observed that the additional payment could have made on account of fair value of assets or on account of non-compete clause or on account of close connection between the assessee and the selling company. With the above observation, he disallowed the claim made by the assessee.

5. Aggrieved with the above order, assessee preferred an appeal before the NFAC, Delhi. After considering the detailed submissions of the assessee, ld. CIT (A) allowed the claim of the assessee. Before ld. CIT (A) assessee has raised additional grounds of appeal on the issue of benefit applicable under Double Taxation Avoidance Agreement between India and Japan qua the rate of tax on payments of dividends to the shareholders. This issue was elaborately dealt by ld. CIT (A) at pages 33 to 37 of the appellate order and he dismissed the additional grounds raised by the assessee as per above discussion.

6. Aggrieved with the above order, assessee is in appeal before us raising following grounds of appeal :-

“Ground 1: That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not allowing claim of the Appellant and not appreciating that Dividend Distribution Tax ("DDT") is a tax on the dividend income of the shareholders and hence, the tax rate on the dividend distributed by the Appellant to its shareholders (residents of Japan and Thailand) should be governed by Article 10 of the India-Japan DTAA and India-Thailand OTAA.

Ground 1.2: That the Ld. CIT(A) has erred in not appreciating that in terms of section 90(2) of the Act, the dividends distributed by the Appellant to the non- resident shareholders are taxable at 10% as per the rate prescribed under the relevant DTAA as against effective tax rate of 20.36% provided under section 115-0 of the Act and the Appellant is entitled to a refund of the differential amount paid in excess i.e. INR 79,78,182.

Ground 1.3: That the Ld. CIT(A) has erred in not adjudicating as per the provisions of Section 237 of the Act read with Article 265 of the Constitution of India which states that only legitimate tax