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2019 (8) TMI 1410 - AT - Income TaxDeprecation on goodwill - assessee has fully written off goodwill in the books of accounts on the asset ceased to exist - the written down value of such goodwill is continued to be remain in the books of accounts - HELD THAT:- As claimed by the assessee itself, it has fully written off goodwill in the books of accounts on the asset ceased to exist in the books of accounts and the last date of the previous year. Once, a particular asset is ceased to exist in the books of account and also, the assessee is not getting any enduring benefit from such assets, then the question of depreciation on such non existing asset does not arise. We find that the Tribunal in assessee’s own case has allowed deprecation on goodwill by following the decision of Hon’ble Supreme Court in the case of Smifs Securities Limited vs CIT [2012 (8) TMI 713 - Supreme Court] on the ground that goodwill is an asset under the expression used in explanation 3(b) to section 32(1) and therefore, deprecation is allowable on such asset as intangible assets being any other business or commercial rights of similar nature. There is no dispute with regard to allowability of deprecation on goodwill, but when you compare the facts of the current year, the question of allowability of deprecation has to be examined, in the light of provision of section 32(1), where it mandates the block of assets should exists to claim depreciation. Since, goodwill is not treated as an asset in its books of accounts and also, the assessee is not getting any enduring benefit out of such goodwill, the question of allowing depreciation on such non existing asset does not arise. AO as well the CIT(A), after considering relevant facts has rightly disallowed depreciation claimed on non-existing asset being goodwill. - Decided against assessee.
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