TaxTMI 
TaxTMI 
2015 (4) TMI 718
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....d. However, on appeal, the Commissioner of Income-tax (Appeals) has deleted the addition and allowed the depreciation to the assessee on goodwill. The Department did not accept the order of the Commissioner of Income-tax (Appeals) and filed appeal thereagainst to the Tribunal and therefore, he made the disallowance for depreciation on goodwill of Rs. 6,25,000 in the year under appeal. 4. On appeal, the Commissioner of Income-tax (Appeals) following his order for the assessment year 2006-07 allowed the claim of depreciation on goodwill to the assessee. 5. The authorised representative of the assessee filed before us copy of the order of this Tribunal in the case of the assessee itself for the assessment year 2006-07 passed in I. T. A. No. 2062/Ahd/2009, order dated June 17, 2011 and submitted that the Tribunal confirmed the order of the Commissioner of Income-tax (Appeals) allowing the claim of depreciation on goodwill to the assessee and dismissed the appeal of the Revenue. Therefore, following the same, the ground of appeal of the Revenue in the present year of appeal should also be dismissed. 6. On the other hand, the Departmental representative supported the order of the Asse....
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....; 3. The assessee reiterated the submissions before the learned Commissioner of Income-tax (Appeals) and it was contended that though the term used in the books stood as goodwill, it effectively represented business rights of the running business of the proprietary concern of Sahitya Mudranalaya which was acquired by the assessee and hence, it fell within the scope of definition of intangible asset as covered under section 32 of the Income-tax Act. Learned counsel for the assessee further submitted that the reliance placed by the Assessing Officer on the decision of the Income-tax Appellate Tribunal, Ahmedabad Bench, in the case of Bharatbhai J. Vyas v. ITO [2005] 279 ITR (AT) 41 (Ahd) is not in order, as in that case, the payment was made to a retiring partner towards goodwill and the firm made a claim for depreciation on the amount of goodwill paid to the partners, whereas in the assessee's case an amount of Rs. 25,00,000 has been paid for the purchase consideration of business and commercial rights for acquiring the running business of Sahitya Mudranalaya which was in existence for the past several years and the assessee had acquired running business ....
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....ill, and there was no acquisition of any rights but in the case of the appellant, payment has been made for acquiring business rights and it has resulted in increase of turnover of the appellant. Since the payment has been made by the appellant for acquiring the business rights of a firm, the facts of the case are similar to that of Skyline Caterers P. Ltd. v. ITO [2008] 306 ITR (AT) 369 (Mum) and following that decision, I am of the view that depreciation is allowable on the said payment as business rights have been acquired which are in the nature of intangible asset. I, therefore, direct the Assessing Officer to delete the disallowance made on this count.' 5. The learned Departmental representative relied upon the order of the Assessing Officer. On the other hand, learned counsel for the assessee reiterated the submissions made before the authorities below and relied upon the decision of the hon'ble Kerala High Court in the case of B. Raveendran Pillai v. CIT [2011] 332 ITR 531 (Ker) and submitted that since the decision of the hon'ble High Court is directly applicable to the matter in issue, therefore, th....
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....f assets and, hence, eligible to depre ciation. It had also been noted by the Tribunal that these facts were stated by the assessee in the audit report and the Assessing Officer had examined the audit report and also made queries and accepted the explanation preferred by the assessee. The acceptance of the claim of the assessee by the Assessing Officer would come in the compart ment of taking a plausible view inasmuch as basically intangible assets were identifiable non-monetary assets that could not be seen or touched or physical measures which were created through time and/or effort and that were identifiable as a separate asset. They could be in the form of copyrights, patents, trademarks, goodwill, trade secrets, customer lists, marketing rights, franchises, etc. which either arise on acquisition or were internally generated. Goodwill conveys a positive reputation built by a person/company/business concern over a period of time. The Tribunal was justified in holding that if two views were possible and when the Assessing Officer had accepted one view which was a plausible one, it was not appropriate on the part of the Commissioner to exercise his power under section 263 solely o....
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.... the orders of the lower authorities and material available on record. In the instant case, the assessee claimed deduction on account of repairs and maintenance and the Assessing Officer observing that there was no check to identify whether the expenditure was capital or revenue in nature made a disallowance of Rs. 2,50,000 out of building repairs claimed by the assessee. On appeal, the Commissioner of Income-tax (Appeals) allowed the deduction to the assessee by observing that looking at the nature of expenses and condition of building which was rented one, the expenditure appears to be regularly incurred on monthly basis as per requirement to maintain the building, and therefore, it was revenue in nature. The Departmental representative merely relied on the order of the Assessing Officer. No material could be brought on record to show that any part of the expenditure of Rs. 2,50,000 allowed by the Commissioner of Income-tax (Appeals) was capital and not revenue expenditure. Hence, we find no infirmity in the order of the Commissioner of Income-tax (Appeals). The same is hereby confirmed and the ground of appeal of the Revenue is dismissed. 12. Ground No. 3 of the appeal is direc....