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Issues: (i) Whether the contract maintenance portfolio acquired as part of a slump sale was entitled to depreciation under section 32(1)(ii) of the Income-tax Act, 1961. (ii) Whether goodwill is an asset eligible for depreciation under section 32 of the Income-tax Act, 1961.
Issue (i): Whether the contract maintenance portfolio acquired as part of a slump sale was entitled to depreciation under section 32(1)(ii) of the Income-tax Act, 1961.
Analysis: The maintenance portfolio was acquired as part of the business purchase on slump sale basis and constituted the assessee's basic income earning apparatus. The issue was covered by the earlier decision recognising that know-how, business contracts and business information acquired in a slump sale are eligible for depreciation as intangible assets.
Conclusion: The issue was decided in favour of the assessee and against the Revenue.
Issue (ii): Whether goodwill is an asset eligible for depreciation under section 32 of the Income-tax Act, 1961.
Analysis: The question was treated as concluded by the Supreme Court authority holding that goodwill falls within the scope of section 32 and is a depreciable asset.
Conclusion: The issue was decided in favour of the assessee and against the Revenue.
Final Conclusion: No substantial question of law arose, and the Revenue's challenge failed in full.
Ratio Decidendi: Intangible commercial assets acquired in a slump sale, including business contracts and goodwill, are depreciable under section 32 of the Income-tax Act, 1961.
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