"Goodwill” Is "Intangible Asset" & Eligible For Depreciation: Supreme Court

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Sat, Aug 25, 2012 at 9:07 AM

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

CIT vs. Smifs Securities Ltd (Supreme Court)

"Goodwill" is an intangible asset eligible for depreciation u/s 32

Pursuant to an amalgamation of another company with the assessee, the difference between the consideration paid by the assessee and the net value of assets of the amalgamating company was treated by the assessee as "goodwill" and depreciation of Rs. 54 lakhs was claimed thereon u/s 32(1)(ii). The AO rejected the claim on the ground that (i) "goodwill" was not an "intangible asset" as defined in Explanation 3 to s. 32(1) and (ii) the assessee had not paid anything for the same. The Tribunal and High Court upheld the assessee's claim. On appeal by the department to the Supreme Court, HELD dismissing the appeal:

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Regards,

Editor,

itatonline.org

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