Goodwill qualifies for depreciation as a depreciable asset under relevant case law

The Tribunal affirmed the allowability of depreciation on goodwill for the assessment year 2003-2004, in line with the legal position established by relevant case law. The decision emphasized that goodwill qualifies as a depreciable asset falling under "any other business or commercial right of a similar nature," as determined by the High Court and Apex Court judgments. The Tribunal's dismissal of the Revenue's appeal upheld the precedent that goodwill, particularly in the context of an amalgamation, is eligible for depreciation.

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Issues Involved:
Allowability of depreciation on goodwill.

Detailed Analysis:

Issue: Allowability of Depreciation on Goodwill
The appeal filed by the Revenue challenges the order of the CIT (A) regarding the allowability of depreciation on goodwill for the assessment year 2003-2004. The High Court directed the Tribunal to decide on the issue of depreciation on goodwill in accordance with the law, specifically referencing the case of Commissioner of Income Tax vs. Smifs Securities Limited. The Tribunal noted that the High Court's decision emphasized that goodwill is an asset falling under the expression "any other business or commercial right of a similar nature," making it depreciable. The Tribunal highlighted that the nature and quantity of goodwill, as determined in the context of an amalgamation, cannot be disputed based on the Bombay High Court's judgment. The Tribunal further reiterated that the Apex Court's judgment established goodwill as an eligible depreciable asset. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the allowability of depreciation on goodwill based on the settled legal position.

This comprehensive analysis of the legal judgment addresses the issues involved and provides a detailed breakdown of the Tribunal's decision regarding the allowability of depreciation on goodwill.

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