Tribunal Upholds Assessee's Right to Claim Depreciation on Goodwill, Emphasizes Legal Principles

The Tribunal condoned the delay in filing the appeals due to valid reasons and upheld the assessee's right to claim depreciation on goodwill, emphasizing adherence to legal principles over technicalities and admissions.

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Issues:
1. Delay in filing the appeals before the Tribunal.
2. Claim of depreciation on goodwill.

Analysis:
1. Delay in filing the appeals:
The appeals by the assessee were filed with a delay of 1836 days before the Tribunal. The reasons for the delay were explained in the application for condonation of delay. The then GM(Finance) of the assessee advised against filing further appeal after the order by CIT(Appeals) in 2008. However, upon receiving professional advice later, the assessee filed the appeals. The Tribunal was urged to adopt a liberal approach in condoning the delay, citing precedents where delays were excused based on genuine reasons. The Tribunal observed that the delay was due to reasonable cause, considering the evolving law on depreciation of goodwill post a Supreme Court ruling. The Tribunal, following previous decisions, held that the delay was justified and should be condoned.

2. Claim of depreciation on goodwill:
The issue revolved around the assessee's claim for depreciation on goodwill acquired during the purchase of a business division. The revenue authorities had rejected the claim, arguing that goodwill did not qualify as an asset for depreciation. The assessee referred to a Supreme Court decision establishing goodwill as depreciable. The Tribunal agreed with the assessee, emphasizing that the ownership and use of goodwill for business purposes were established in this case. The Tribunal dismissed the revenue's argument that the assessee had accepted disallowance in previous years, highlighting that tax liability must align with the law, not mere admissions. Consequently, the Tribunal allowed the appeals of the assessee, affirming their entitlement to depreciation on goodwill.

In conclusion, the Tribunal condoned the delay in filing the appeals due to valid reasons and upheld the assessee's right to claim depreciation on goodwill, emphasizing adherence to legal principles over technicalities and admissions.

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