TMI Blog2012 (12) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein ground No.2 and 3 are general in nature and do not survive for adjudication. The lone ground surviving for adjudication being ground No.1 is reproduced herein under for reference: 1. The Ld. Commissioner of Income tax (A)-XI, Ahmedabad has erred in law and on facts in deleting the addition of ₹ 90,21,444/- made by disallowing depreciation on goodwill. 3. The facts of the case in brief, are that the assessee is a Company engaged in the activities of computer education, software development, sales and import thereof furnished its return of income electronically on 31-10-2007 declaring a total income of ₹ 43,53,990/- along with return of fringe benefits showing its taxable value at ₹ 65,440/-. The case was se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of depreciation on such good will. It is also pertinent to mention here that the intangible assets specified in section 32 for the purpose of depreciation the word goodwill is not included specifically. Accordingly, goodwill cannot be treated as any other business of commercial rights of similar nature. Therefore the depreciation claimed on goodwill is required to be added in the total income of the assessee. Accordingly, an amount of ₹ 90,21,444/- being depreciation on goodwill is hereby disallowed and added to the total income of assessee. 3.3 In this regard, reliance is placed on the decision of Hon ble Jurisdictional ITAT in the case of Bharatbhai J. Vyas Vs ITO (2005) 97 ITD 248, wherein it was held that; It shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncements on a similar issue, the learned CIT (A) had recorded the reasons in an elaborate and illustrative manner in his findings which are, for appreciation of facts, extracted as under: 3.2 I have considered the submissions made by the A. R. of the appellant and the observation of the assessing officer in the assessment order. Briefly state the relevant facts are as follows. In accordance with the scheme of amalgamation approved by the order dated 22-06-2001 of High Court of Gujarat, Net vision Web Technologies Private Ltd. (NVWTPL) got amalgamated with Indotech Capital Market Limited (ICML) w. e. f. 01-04-2000. NVWTPL was a profit making company, owning bundle of rights in the form of Trade-mark, copy-right, franchise, license etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ool to carry on business, is intangible asset, entitled to depreciation. It is also seen that the appellant was allowed depreciation in the earlier years on these intangible assets. 3.2.3. Therefore, having given my careful consideration to the facts of the case and the case-laws relied on by the A. O. and A. R., I have no hesitation to hold that the appellant is entitled to the depreciation claimed. Disallowance of depreciation of ₹ 90,21,444/- is allowed. This ground of appeal is allowed. 5. Aggrieved, the revenue has come up with the present appeal. During the course of hearing, the learned DR fairly placed strong reliance on the reasoning of the learned AO in rejecting the assessee s claim and found fault with the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant case records, books of accounts of the assessee and also the case laws relied by the learned AR. 8. On perusal of the records, we find that ITAT Ahmedabad B Bench has recently decided similar issue in favour of the assessee and against the revenue while adjudicating revenue s appeal in ITA No.1186/Ahd/2011 etc. in the case of Net 4 Nut Ltd. dated 21-09-2012 . The relevant portion of the above order of the Tribunal is extracted herein under for reference: 5. We have heard both the parties, perused the orders of the authorities below and considered the material on record. The learned CIT(A) has given categorical findings that the assessee had incurred expenditure of ₹ 1,87,81,830/- on development of AVTAAR and the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panding the assessee s business, resulting in, huge turnover and profits as pointed out supra. 5.9. In view of the facts and circumstances of the issue as deliberated upon in the fore-going paragraphs and also in conformity with the ruling of various judiciaries, chiefly, the ruling of the Hon ble High Court of Kerala referred supra, we are of the considered view that the CIT (A) was justified in holding that the assessee was eligible for depreciation on intangible assets acquired by it. It is ordered accordingly. We make it very clear that we have arrived at this above conclusion from the facts of this case as the valuation report submitted by the appellant has not been successfully challenged by the Revenue to establish the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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