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2014 (6) TMI 661 - AT - Income TaxAllowability of depreciation on the value of goodwill – Held that:- Following Commissioner of Income Tax, Kolkata Versus Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] - explanation 3 to section 32 states that the expression asset shall mean intangible asset being know-how, copyrights, trademarks, licenses, franchises or any other business are commercial rights of similar nature - The words ‘any other business or commercial rights of similar nature’ stated in explanation 3 includes that ‘goodwill’ would fall under the expression ‘any other business of commercial rights of a similar nature’ - the principle of ‘ejusdem generis’ would strictly apply while interpreting the said expression which find place in explanation 3(b) - ‘goodwill’ is an asset under the explanation 3(b) to section 32(1) and eligible for the depreciation - CIT(A) is not justified in denying the benefit of depreciation claimed by the assessee on the ‘goodwill’ – the AO is directed to allow the claim of depreciation - Decided in favour of Assessee. Admission of additional evidence under Rule 46A of the Rules – Held that:- The assessee claimed the total depreciation on intangible asset as per the business transfer agreement, the value of which is at 11.13 crores - mere devaluation of the goodwill will not reduce the claim of depreciation, as the assessee is entitled @ 25% on the total value of the intangible assets valued at Rs.11.13 crores - the assessee is entitled for the depreciation on the good will on the same rate @ 25% - Decided against Revenue. Disallowance of employee’s contribution to provident fund – Held that:- The assessee has made the payments after the due date of payment but the said payment has been paid within the grace period - the payment made within the grace period is held to be made within the due date – thus, there was no reason to interfere with the decision of the CIT(A) – Decided against Revenue.
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