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2019 (5) TMI 1982 - ITAT BANGALOREDepreciation on non-compete fee - whether it falls in the category of an 'intangible asset’? - CIT(A) has allowed depreciation - HELD THAT:- CIT(A) has followed the binding decision rendered in the case of Ingersoll Rand International Ltd. [2014 (6) TMI 934 - KARNATAKA HIGH COURT] Even though the Hon’ble Delhi High Court has taken a different view, yet the decision rendered by the jurisdictional High Court in binding on all the persons falling within its jurisdiction. In view of the same, we do not find any reason to interfere with the orders passed by the ld CIT(A) on this issue in all the years under consideration. Depreciation on the goodwill - CIT(A) noticed that the assessee itself has submitted that no amount could be attributed towards Goodwill, thus in principle, held the disallowance of depreciation on goodwill is justified - HELD THAT:- The issue relating to eligibility to claim depreciation on Goodwill has since been settled in the case of CIT Vs. Smifs Securities Ltd.. [2012 (8) TMI 713 - SUPREME COURT] Hence the assessee is eligible to claim depreciation on the amount paid for Goodwill. SC held that the difference between the cost of an asset and the amount paid for acquiring the same constituted goodwill. In commercial parlance also, the amount paid over and above the value of tangible and intangible rights is considered as goodwill. There is also no dispute with regard to the fact that the assessee has treated the difference amount as goodwill only in its books of account. Hence, in our view, merely because the assessee has taken a different stand before the AO to the effect that the difference/excess amount paid by it represented payment made for trademark/trade name would not change the character of payment made by the assessee. In the case, the alternative contention raised before the AO would not, in our view, disentitle the assessee to claim depreciation on the amount, which is otherwise could be considered as goodwill in its hand. The tax authorities are not justified in denying the depreciation claimed by the assessee on the amount of goodwill. Assessee appeal allowed.
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