2020 (12) TMI 1107

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....., the assessee is engaged in the business of providing pest control services. It claimed depreciation on customer list and goodwill at the rate of 25% treating them as an intangible asset. While making the assessment for the assessment year 2013-14, the A.O. required the assessee to explain the claim of depreciation. The assessee submitted that it wanted to expand its pest management and control service operations and in furtherance of the said intention, it had acquired business of M/s. Maykar Pest Control for a total consideration of Rs. 1.6 crores by entering into a Business Transfer Agreement (BTA). The consideration has been allocated to tangible assets based on the valuation carried out by individual valuer and the balance conside....

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.... authorities. 5. We heard the rival submissions. The co-ordinate Bench of this Tribunal in ITA Nos. 444 & 445/Chny/2018 vide order dated 26.07.2018 for the assessment years 2010-11 & 2014-15 has allowed the issue of depreciation on goodwill, the relevant portion is extracted as under:- "4. We heard the rival submissions. Since, there is no change in the factual and legal matrix, the relevant portion of the order of the co-ordinate Bench in ITA No. 2660/Mds/2016 for the assessment year 2011-12 is extracted as under:- 3. It was submitted by the Ld.AR that the assessee has raised 5 grounds in its appeal. It was a submission that the assessee was only pressing Ground Nos.2 to 2.5 which was against the action of the Ld.CIT(A....

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.... books of account of the assessee, the assessee had valued the assets and the goodwill/customer list had been treated as an intangible asset and depreciation claimed thereon. It was a submission that though there is non-compete clause in the Business Transfer Agreement, no amount was quantified for the same. It was a further submission that even assuming the amount was non-compete fee still in view of the decision of the Hon'ble Madras High Court in the case of M/s.Pentasoft Technologies Ltd., reported in 264 CTR 187, non-compete fee has been held to be a right as an intangible asset entitled to depreciation u/s.32. It was a further submission that neither the term customer list nor non-compete fee was defined in Sec.32. It was a submission....

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....ng clause to strengthen the commercial rights which had been transferred to the assessee herein. Further, a perusal of the decision of the Co-ordinate Bench of this Tribunal, Pune 'A' Bench, in the case of M/s.Cosmos Co-op Bank Ltd., shows that even the customer list has been treated as falling within the expression "business or commercial rights of similar nature" contained in Sec.32(1)(ii) of the Act. For this purpose, the Co-ordinate Bench of this Tribunal has relied upon the decision of the Hon'ble Delhi High Court in the case of M/s.Areva T & D India Ltd., reported in [2012] 20 taxmann.com 29 (Delhi). In these circumstances, we are of the view that the assessee is entitled to the depreciation on the intangible asset viz., goodwill/cust....