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2008 (2) TMI 443 - AT - Income TaxDepreciation on goodwill - Generated on acquisition of businesses - HELD THAT:- In the present case, the amount was paid by the assessee towards the acquisition of goodwill. Therefore, the said payment does not come under either know-how, patents, copyrights, trademarks, licences, franchises. The only remaining category is the residual one "any other business or commercial rights of similar nature". It is to be seen that any other business or commercial rights are not by themselves intangible assets eligible for depreciation. Those rights must be of similar nature; all similar nature to know-how, patents, copyrights, trademarks, licences, franchises. Any business or commercial rights not similar in nature to the above mentioned six items cannot be treated as intangible assets qualified for depreciation. Ejusdem generis rule is the rule of generic words following more specific one. The rule is that when general words follow specific words of same nature, the general words must be confined to the things of the same kind as those specified. This rule of interpretation makes an attempt to reconcile incompatibility between the specific and general words. The first category of words like know-how, patents, copyrights, etc., form a distinct genesis or category inasmuch as all those items are specific and elucidated rights of business or commercial nature. In such circumstances, the expression "any other business or commercial rights of similar nature" also must be in the same genesis or category with specific and elucidated identity of commercial or business nature. Therefore, in the light of the statutory provisions contained in section 32(1)(ii), the goodwill acquired by the assessee does not come under the expression of any other business or commercial rights of the nature similar to know-how, patents, copyrights, etc. The expression "all business and commercial rights" used in the agreement is too a generic expression which does not find similarity with the specific expressions like know-how, patents, licences, etc. Therefore, such a very general expression of business and commercial rights cannot be equated with the expression of "any other business or commercial rights of similar nature" occurring in section 32(1)(ii). There is nothing on record including in the agreement to show that the assessee had paid the amount for something other than goodwill. The Tribunal through its decisions has already held that the goodwill is not an intangible asset entitled for depreciation. Useful reference may be made to Bharatbhai J. Vyas' case [2005 (8) TMI 279 - ITAT AHMEDABAD-C], Guruji Entertainment Network Ltd.'s case [2007 (3) TMI 307 - ITAT DELHI-E] and CIT v. Mangalore Ganesh Beedi Works' case[2002 (12) TMI 34 - KARNATAKA HIGH COURT]. Therefore, we find that the contention of the assessee is not tenable either in facts or in law. Therefore, we hold that the lower authorities have rightly held the acquisition cost of goodwill is not entitled for depreciation. In result, this appeal filed by the assessee is dismissed.
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