Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (4) TMI 1177 - AT - Income TaxValue of pre-qualification rights - Depreciation u/s 32(1) - Intangible assets - Goodwill - Held that:- The common examples of goodwill are locational advantage, image of the proprietor/directors etc. It is true that both commercial rights as well as goodwill can be classified as 'intangible asset'. But the distinguishable feature of the two is that the commercial rights whether the business runs profitably or not, it never diminishes or gets distinguished; but in case of goodwill, the business gets diminished or even gets distinguished in proportionate to the existing status of the 'goodwill'. The transfer of pre-qualification rights and technical proprietary information by the holding company was on account of genuine commercial considerations done, at arms length, based on the business valuation report, given by a reputed firm of Chartered Accountants and without which the assessee would not have been in a position to carry on the business and also to secure further business. - This transaction cannot tantamount to only a paper transaction or sham transaction as there is no such evidence on record. - Depreciation allowed.
|