TMI Blog2011 (6) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... lained that it was engaged in the business of printing and related work and during the year, it acquired business right and running business of Sahitya Mudranalaya, a proprietary concern of Bhagwati Trust and for the value of the business rights and goodwill it has to pay ₹ 25,00,000/- which was basically for business rights etc. which was enjoyed by the above firm for many years. It was submitted that though in the book accounting it has been named as goodwill but it represented business rights which are well covered in the term of intangible asset. The AO did not accept the contention of the assessee and relied upon the order of the ITAT Ahmedabad Bench in the case of Bharatbhai J. Vyas 97 ITD 248. The AO disallowed the claim and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business with its business and commercial rights constituted an intangible asset entitled to depreciation u/s 32 of the IT Act and while deciding the issue, the Tribunal had elaborately discussed the case of Bharatbhai J. Vyas. The learned Counsel for the assessee further furnished a copy of audited profit loss account of the company for the year ended 31-03-2004 to 31-03-2006 and submitted that after taking over the firm of M/s. Sahitya Mudranalaya, the turnover of the assessee has increased by 20% from year to year and hence, taking over of business rights has been much beneficial to the assessee company even after paying ₹ 25,00,000/- towards business and commercial rights and goodwill. 4. The learned CIT(A) considering the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowable on the said payment as business rights have been acquired which are in the nature of intangible asset. I, therefore, direct the A. O. to delete the disallowance made on this count. 5. The learned DR relied upon the order of the AO. On the other hand, the learned Counsel for the assessee reiterated the submissions made before the authorities below and relied upon the decision of the Hon ble Kerala High Court in the case of B. Raveendra Pillai Vs CIT 194 Taxman 477 (Ker) and submitted that since the decision of the Hon ble High Court is directly applicable to the matter in issue, therefore, departmental appeal has no merit and the same may be dismissed. 6. We have considered the rival submissions and gone through the above de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med on goodwill by the assessee on account of payment made for the marketing and trading reputation, trade style and name, marketing and distribution, territorial know-how, including information or consumption patterns and habits of consumers in the territory and difference between the consideration paid for business and value of tangible assets. The Tribunal had treated it to be valuable commercial asset similar to other intangibles mentioned in the definition of the block of assets and, hence, eligible to depreciation. It had also been noted by the Tribunal that these facts were stated by the assessee in the audit report and the Assessing Officer had examined the audit report and also made queries and accepted the explanation preferred by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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