Appeal Allowed: Depreciation on Goodwill Upheld for Assessment Year 2007-2008

The Appellate Tribunal ITAT Ahmedabad allowed the appeal of the assessee against the disallowance of depreciation on intangible assets, specifically goodwill, for the assessment year 2007-2008. Citing the decision in CIT Vs. Smifs Securities Ltd., the Tribunal ruled in favor of the assessee, emphasizing the entitlement to claim depreciation on goodwill as an intangible asset. The appeal was allowed, and the judgment was pronounced in Open Court on the specified date.

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Issues involved:
Disallowance of depreciation on intangible assets (goodwill)

Analysis:
The judgment by the Appellate Tribunal ITAT Ahmedabad involved an appeal by the assessee against the orders of the CIT(A) for the assessment year 2007-2008. The sole effective ground of the appeal was the disallowance of depreciation on intangible assets, specifically goodwill, amounting to Rs. 1,62,300. The learned counsel for the assessee contended that the issue was settled in favor of the assessee by the Hon'ble Apex Court's decision in CIT Vs. Smifs Securities Ltd., 348 ITR 302 (SC). The Departmental Representative (DR) failed to counter the submissions made by the assessee's counsel.

Upon reviewing the arguments and the orders of the Assessing Officer (AO) and the CIT(A), the Tribunal found that the key issue in the appeal was the allowability of depreciation on goodwill, which is considered an intangible asset. The Tribunal referenced the decision of the Hon'ble Apex Court in CIT Vs. Smifs Securities Ltd., affirming that the assessee is indeed entitled to claim depreciation on goodwill. Consequently, the Tribunal ruled in favor of the assessee, allowing ground no. 1 of the appeal.

In conclusion, the appeal of the assessee was allowed by the Tribunal, emphasizing the entitlement of the assessee to claim depreciation on goodwill as an intangible asset. The judgment was pronounced in Open Court on the specified date.

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