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2016 (8) TMI 1561 - AT - Income TaxAmortization/depreciation on Goodwill - Goodwill consequent to a scheme of amalgamation - As per revenue goodwill is depreciable u/s 32 only if any consideration is paid for its acquisition and the assessee has not earmarked any specific amount towards such goodwill at the time of amalgamation - CIT-A Allowed claim - plea of the Revenue is that in the present case assessee has not paid any consideration for acquisition of goodwill at the time of amalgamation and, therefore, the claim of depreciation has been wrongly allowed - HELD THAT:- Quite clearly, in terms of scheme of amalgamation, the assets and liabilities of GIL stood transferred to the assessee. Further, the deficit in the value of assets over the value of liabilities of GIL taken over after adjusting the aggregate value of the equity shares issued to the members of GIL, was treated as goodwill in the books of the assessee-company. In view of the authoritative pronouncement of the Hon'ble Supreme Court in the case of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT], it cannot be denied that ‘goodwill’ is an asset qualifying for depreciation u/s 32(1)(ii) . The plea of the Revenue that no amount has been paid for its acquisition does not defeat the claim of depreciation allowed by CIT(A). Notably, ‘goodwill’ has arisen in the present case consequent to a scheme of amalgamation approved by the Hon'ble High Court and so was the situation in the case of Smifs Securities Ltd. (supra) also. Thus we affirm the ultimate direction of the CIT(A) to allow depreciation on goodwill as per the Income Tax Rules, 1962 by working out the figure of WDV of goodwill for the year under consideration. - Decided against revenue.
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