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2013 (11) TMI 1487 - AT - Income TaxDepreciation on goodwill – Held that:- The assessee as per slump sale agreement, acquired a going concern, business of on-line and other electronic media through internet and other networks including databases, online newspapers and magazines – An amount which is reflected in the balance sheet as goodwill was for acquisition of bundle of business or commercial rights which was defined in the slump sale agreement, termed as ‘goodwill’ in the books of accounts – Following R.G. Keshwani vs. ACIT [2008 (2) TMI 443 - ITAT BOMBAY-H] - The principle of ejusdem generis is applicable in such case - Where there are general words following particular and specific words, the meaning of the latter words shall be confined to things of the same kind as specified – In the given case for interpreting the expression 'business or commercial rights of similar nature' specified in section 32(1)(ii) - Such rights need not answer the description of 'know-how, patents, trademarks, licenses or franchises' but must be of similar nature as the specified assets - On a perusal of the meaning of the categories of specific intangible assets referred in section 32(1)(ii) preceding the term 'business or commercial rights of similar nature, it is seen that the aforesaid intangible assets are not of the same kind and are clearly distinct from one another. In the absence of the aforesaid intangible assets (business or commercial rights), the assessee would have had to commence business from scratch and go through the gestation period whereas by acquiring these business rights along with the tangible assets, the assessee got an up and running business – Following Hon’ble Supreme Court in the case of C.I.T., Kolkata vs. Smifs Securities Ltd [2012 (8) TMI 713 - SUPREME COURT] - Goodwill is an asset under Explanation 3(b) to Section 32(1) qualifies for depreciation u/s. 32 - Explanation 3 states that the expression ‘asset’ shall mean an intangible asset, being know how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature – Decided in favour of assessee.
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