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2015 (7) TMI 609 - ITAT LUCKNOWDepreciation on goodwill account - CIT(A) allowed the claim - as per revenue the company has issued 74,26,950 equity shares of ₹ 10/- each to the shareholders of J.K. Synthetics Ltd. (hereinafter called in short as JKSL) free of cost by debiting to goodwill account and the company has created goodwill account and declared it in fixed assets as per schedule IV to the annual report of the company - Held that:- First of all the cost of shares allotted to the shareholders of JKSL is part of payment of purchase consideration towards the cost of acquisition of cement undertaking on which assessee is eligible for depreciation. Even in the alternative, if the cost of shares allotted to the shareholders of JKSL is considered to be the cost of goodwill acquired by the assessee, as it was shown as part of means of finance, even then it is eligible for depreciation in the light of the judgments of Areva T and D India Ltd. vs. DCIT (2012 (4) TMI 79 - DELHI HIGH COURT) where in HC examined this issue in the light of legal provisions of the Act and various judgments of the Hon'ble Apex Court and finally concluded that specified intangible assets acquired under slump sale agreement were in the nature of "business or commercial rights of similar nature" specified in section 32(1)(ii) of the Act and were accordingly eligible for depreciation and also confirmed by the Hon'ble Apex Court. Therefore, we are of the considered opinion that the ld. CIT(A) has rightly adjudicated the issue and we do not find any infirmity therein. Also see CIT vs. Manipal Universal Learning Pvt. Ltd. (2013 (7) TMI 169 - KARNATAKA HIGH COURT ) by holding that Explanation 3 to section 32(1) of the Act defines expression “asset” to include intangible asset like goodwill and goodwill is an asset under Explanation 3(b) to section 32(1) of the Act, therefore, depreciation is allowable even on the goodwill. - Decided against revenue.
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