TMI Blog2015 (12) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... with trade mark, franchisee, copy right, etc., hence, entitled for the depreciation.- Decided in favour of assessee. - I.T.A. No.987/Ahd/2012 - - - Dated:- 15-10-2015 - SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER And SHRI KUL BHARAT, JUDICIAL MEMBER For The Appellant : Shri Sunil H. Talati For The Respondent : Shri Dinesh Singh, Sr.DR PER SHRI KUL BHARAT, JUDICIAL MEMBER : This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-III, Baroda [ CIT(A) in short] dated 13/02/2012 pertaining to Assessment Year (AY) 2008-09. The Assessee has raised the following grounds of appeal:- Your appellant being dissatisfied with the order passed by the Hon'ble CIT(A)-III, Baroda dated 13/02/12 presents this appeal against the said order on the following amongst other grounds: 1. The order passed by the learned AO is bad in law and be quashed. It be held so now. 2. The Hon'ble CIT(A)-III, Baroda has erred in confirming the action of AO for not granting the exemption amounting to ₹ 60,01,695/- claimed u/s 10B of the Act despite the fact that the appellant filed Form 56G certified by Chartered Account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -99. He submitted that the period of 10 years is to be reckoned from AY 1999-2000, but not from AY 1998-99. The ld.counsel for the assessee submitted that the registration as 100% EOU was received on 05/04/2007 (AY 2008-09) and the exemption was claimed first time in the AY 2008-09. The ld.counsel for the assessee submitted that the assessee fulfilled all the conditions as envisaged u/s.10B(2) of the Act, since the undertaking manufactures Choline Dichloride and Pyridynyloxy Octyl acetate for export since February-1999. The undertaking was not formed by the splitting up, or the reconstruction, of a business already in existence. The undertaking was not formed by the transfer to a new business of machinery or plant previously used for any purpose. 4.1. On the contrary, ld.Sr.DR opposed the submissions of the ld.counsel for the assessee and submitted that the submissions of the ld.counsel for the assessee are not correct. He drew our attention towards the order of the ld.CIT(A), wherein he has recorded that as per balance-sheet of the firm, namely, Sujag Fine Chemicals as on 01/04/1998 shows that the total investment in fixed assets including plant and machinery was ₹ 1,25,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfils all the following conditions, namely :- (i) it manufactures or produces any articles or things or computer software; (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation : The provisions of Explanation 1 and Explanation 2 of sub-section (2) of section 80-I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section. 5.1. As per this provision, the exemption would be available for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the sides. From the side of the Revenue, learned DR, Mr. O.K. Singh has argued that Section 32 prescribes that an asset is required to be acquired on or after 1st day of April 1998 in the nature of copy right, licences, know how etc. He has raised two arguments. The first argument was that goodwill is not In the nature of the assets as defined u/s. 32(1)(ii) of the IT Act. His second objection was that the asset in question, i.e., goodwill was not in existences when the assessee company had taken over the erstwhile firm. He has also placed reliance on Vyomit Shares, Stocks Investments P. Ltd. Vs. DCI7, 106, ITD 408 (Mum). 7. On the other hand, from the side of the respondent assessee, learned AR, Mr. Sunil Toloti appeared and placed reliance on SMIFS Securities, 348 ITR 302 (SC), B. Raveendran Filial Vs. CIT, 332 ITR 531 (2011) (Ker) and CIT Vs. Hindustan Coca Cola Beverages (P) Ltd. (Delhi), 331 ITR 192 (2011). 8. Facts of the case have revealed that the assessee had taken over the business of a partnership firm, namely, Sujag Fine Chemicals. The assessee company was formed on 19.2.1999. In support a certificate of incorporation is placed on record. The goodw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala), the Hon'ble High Court has also held that the goodwill is certainly comparable with trade mark, franchisee, copy right, etc., hence, entitled for the depreciation. Respectfully following these decisions wherein the doctrin of ejusdem generic is applied and held that the Goodwill is of like nature of intangible asset as prescribed, therefore, we hereby hold that under the totality of the facts and circumstances of the case the assessee is entitled for the claim of depreciation on the DWV of the goodwill for the year under consideration. Ground raised in this regard is hereby allowed. 7. There is no disparity on facts, therefore, we allow the appeal of the assessee on this issue and delete the disallowance. No other ground was pressed, hence all other grounds are rejected. 8.1. Since the facts of the case are identical to that of AY 2006-07 in assessee s own case, taking a consistent view, we hereby allow the ground of assessee s appeal for this year also and direct the AO to allow the depreciation on good will. Thus, ground No.3 of Assessee s appeal is allowed. 9. In the result, the appeal of the Assessee is partly allowed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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