TaxTMI 
TaxTMI 
2014 (10) TMI 879
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.... proceedings before the Tribunal. In the first round, the Revenue‟s appeal with its 5 grounds was adjudicated by the Tribunal and the appeal was partly allowed vide ITA No.3279/M/2008, order dated 25.5.2012. The matter travelled to the Hon'ble High Court and the issue relating to the allowability of depreciation on goodwill, raised in ground no.1 was restored to the file of the ITAT for fresh decision on merits and in accordance with law. Therefore, the present proceedings are placed before us. The said ground no.1 reads as under: "1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) has erred in directing the AO to grant depreciation on goodwill without appreciating that depreciation is not allowabl....
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....48 ITR 302 (SC)], the claim of the assessee is required to be allowed in full. Further, elaborating on the direction of the Hon'ble High Court relating to the "fresh decision on merits and in accordance with law", on the issue of the very nature of the "goodwill", Ld Counsel for the assessee mentioned that there is no dispute on the nature of goodwill as decided by the Hon'ble High Court while approving the scheme of amalgamation. In this regard, Ld Counsel brought our attention to the order of the Hon'ble High Court in the matter of Scheme of Amalgamation of Casablancas Gannon Engineering Limited with Toyo Engineering India Limited and read out the following relevant portion from page 97 of the paper book which reads as under: "..............
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....t under section 391 of the Companies Act, it ceases to retain the character of contract and operates by force of the statute......" . For the above, the Hon'ble High Court relied on the judgment of the Hon'ble Supreme Court in the case of J.K. (Bombay) Pvt. Ltd vs. New Kaiser-I-Hind Spinning & Weaving Co. Ltd (1970) 40 Comp Cas 689. Thus, it is the argument of the Ld. Counsel that by virtue of the judgment of the Hon'ble Bombay High Court in the context of amalgamation, the difference should be considered as "goodwill" and the same has to computed based on the book values only. Coming to the issue of granting of depreciation u/s 32(1)(ii) in respect of the intangible asset (goodwill), it is a settled law in view of the Apex Court judgment i....