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| The Tax Publishers2020 TaxPub(DT) 0710 (Mum-Trib) INCOME TAX ACT, 1961
Section 32
Where claim of depreciation raised by assessee on the amount of excess payment which was capitalised in its “books of account” as goodwill, was found to be in order, therefore, AO was directed to allow depreciation on the “goodwill” that was capitalised by assessee.
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Depreciation - CIT(A) reduced the purchase value by 50% - Allowability -
Assessee raised an issue before Tribunal that CIT(A) erred in upholding the disallowance of depreciation on cost of know how and intangibles acquired by assessee from ORG of their division of Adex Business purchased alongwith all assets and liabilities, merely because amount was shown in balance sheet under compendious heading of goodwill. Held: Claim of depreciation on excess payment had been declined by CIT(A), for the reason, that no depreciation was allowable on “goodwillâ€. Pursuant to judgment of Supreme Court in case of CIT v. Smifs Securities Ltd. (2012) 348 ITR 302 (SC) : 2012 TaxPub(DT) 2430 (SC) the issue as regards allowability of depreciation on “goodwill” was no more res integra. As such, claim of depreciation raised by assessee on the amount of excess payment which was capitalised in its “books of account” as “goodwillâ€, was found to be in order. Accordingly, AO was directed to allow depreciation on the goodwill that was capitalised by assessee.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2003-04
IN THE ITAT, E BENCH, MUMBAI
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