TaxTMI 
TaxTMI 
2012 (11) TMI 1353
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....rs 2007-08 and 2008-09 respectively; in proceedings under section 143(3) of the Income Tax Act 1961 [in short the "Act"]. Since grounds raised in both appeals are identical, for convenience and brevity, we take up I.T.A. No. 731/Mds/2012 as 'lead' case. I.T.A. No. 731/Mds/2012 2. Referring to the grounds raised in the appeal, it has been stated on behalf of the Revenue that the CIT(A) has wrongly allowed the assessee's claim for depreciation on 'goodwill' by upsetting the findings of the Assessing Officer. On the other hand, the assessee has placed strong reliance on CIT(A)'s order. Keeping in view the difference in the stands of both parties regarding correctness of CIT(A)'s order, we frame the following issue for our adjudication: ....
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....he ITAT Mumbai Bench decision in the case of RG Keswani vs. ACIT 116 ITD 133 and declined assessee's claim of depreciation on goodwill of 1,93,85,000/-. To the above extent, he reduced the loss returned by the assessee vide assessment order dated 31.12.2009. 5. Aggrieved, the assessee preferred appeal before the CIT(A). During the pendency of the said appeal, the Assessing Officer also sent proposal to the CIT(A) for enhancing the assessee's income to the extent of 1,93,85,000/- (supra) stating therein that the amount paid by the assessee in slump sales in excess of the value of the asset over its liability had to be treated as value of goodwill. As the record reveals, the CIT(A) issued notice of the proposal to the assessee. Thereafter,....
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....d that the issue is no more res integra as the Hon'ble Apex Court in the case of CIT v. Smifs Securities Ltd. [2012] 24 taxmann.com 222(SC) dated 22.08.2012 has held that under section 32(1) explanation 3, the goodwill is an 'intangible' asset entitled for relief of depreciation. He has also produced copy of the Hon'ble Kerala High Court's judgment in the case of B. Raveendran Pillai v. CIT (supra) as well as copy of the business transfer agreement entered into by the assessee and prayed for upholding the CIT(A)'s order. 8. We have considered the issue at length and also perused relevant findings as well as case law cited by the parties. The strife between the parties is that the assessee says that since it had paid the consideration in ....
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....pany." It was further explained that excess consideration paid by the assessee over the value of net assets acquired of YSN Shares and Securities Private Limited [Amalgamating Company] should be considered as goodwill arising on amalgamation. It was claimed that the extra consideration was paid towards the reputation which the Amalgamating Company was enjoying in order to retain its existing clientele. The Assessing Officer held that goodwill was not an asset falling under Explanation 3 to Section 32(1) of the Income Tax Act, 1961 [`Act', for short]. We quote hereinbelow Explanation 3 to Section 32(1) of the Act: "Explanation 3.-- For the purposes of this sub-section, the expressions `assets' and `block of....
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....ities Private Limited were transferred to the assessee for a consideration; that the difference between the cost of an asset and the amount paid constituted goodwill and that the assessee- Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee-Company stood increased. This finding has also been upheld by Income Tax Appellate Tribunal [`ITAT', for short]. We see no reason to interfere with the factual finding. One more aspect which needs to be mentioned is that, against the decision of ITAT, the Revenue had preferred an appeal to the High Court in which it had raised only the question as to whether goodwill is an asset under Section 32 of the ....