2015 (10) TMI 1613

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....ion on goodwill. 3. The brief facts of the case are that assessee has filed its return of income on 23-12-2006 declaring total income of Rs. 5,39,660/-. An assessment order was passed u/s. 143(3) on 22-12-2008 determining total income at Rs. 90,90,889/-. On verification of depreciation claimed, it revealed to the Ld. Assessing Officer that, assessee has claimed depreciation of Rs. 1,09,810/- @ 25% written down value of goodwill. According to the Assessing Officer, the depreciation on goodwill is not admissible, therefore, he reopened the assessment and issued notice u/s. 148 of the income tax act. He disallowed the claim of assessee. 4. On appeal, ld. Commissioner of Income Tax (Appeals) has confirmed the disallowance. 5. Before us....

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.... Securities, 348 ITR 302 (SC), B. Raveendran Pillai Vs. CIT, 332 ITR 531 (2011) (Ker) and CIT Vs. Hindustan Coca Cola Beverages (P) Ltd. (Delhi), 331 ITR 192 (2011). 8. Facts of the case have revealed that the assessee had taken over the business of a partnership firm, namely, Sujag Fine Chemicals. The assessee company was formed on 19.2.1999. In support a certificate of incorporation is placed on record. The goodwill was acquired by the assessee in the Assessment Year 1999-2000 when the firm, as a going concern, was taken over by the company/ appellant along with all the assets. At the time of acquisition, the goodwill as an asset was purchased from the firm for a consideration of Rs. 24,67,926/-. Thereafter for A.Y. 1999-00, 2000-01 an....

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....ther business or commercial rights of similar nature" in clause (b) of Explanation 3 indicates that goodwill would fall under the expression "any other business or commercial right of a similar nature:. The principle of ejusdem generic would strictly apply while interpreting the said expression which finds place in Explanation 3(b). In the circumstances, we are of the view that "goodwill" is an asset under Explanation 3(b) to section 32 (1) of the Act." 9. Earlier in the case of B. Raveendran Pillai, 332 ITR 531 (Kerala), the Hon'ble High Court has also held that the goodwill is certainly comparable with trade mark, franchisee, copy right, etc., hence, entitled for the depreciation. Respectfully following these decisions wherein....