India: No goodwill created in related-party amalgamation (tribunal decision)
Depreciation deductions on goodwill thus disallowed and buyback tax upheld
The Income-tax Appellate Tribunal (Pune Bench) held that no goodwill was created as a result of the amalgamation of one member of an Indian group with the parent of the group.
The tribunal thus disallowed depreciation deductions on the goodwill claimed by the taxpayer.
The taxpayer also took the position that no buyback tax was payable on its post amalgamation repurchase of shares on the grounds that the goodwill was includible in determining the “issue price” of the shares and the amount paid to repurchase the shares was less than that issue price. The tribunal rejected the taxpayer’s position and upheld the levy of buyback tax on the taxpayer.
Read a March 2026 report prepared by the KPMG member firm in India