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2016 (3) TMI 169 - ITAT MUMBAI

2016 (3) TMI 169 - ITAT MUMBAI - [2015] 44 ITR (Trib) 112 (ITAT [Mum]) - Disallowance of claim of depreciation on "goodwill" under section 32(1)(ii) - Held that:- We direct the Assessing Officer to allow the assessee's claim of depreciation on "good-will" in all the years under consideration as goodwill also falls under the expression 'any other business or commercial right of a similar nature' and thus would be an asset under Explanation 3(b) to section 32(1) of the Act - Decided in favour of a .....

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of the Income-tax Act, 1961. 2. The common grievance of the assessee in all the years pertains to disallowance of claim of depreciation on "goodwill" under section 32(1)(ii) of the Income-tax Act. 3. The rival contentions have been heard and record perused. Facts in brief are that the assessee-company, during the assessment year 2002-03, had taken the entire business as a going concern of M/s. St. Angelo's Computers, which was carrying on the activity of imparting professional comp .....

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ng the value of the name/brand of St. Angelo's and other know-how in the field of computer education, trained instructors, books, course material developed for providing training in computer applications, working pattern, education methodology, etc., which basically was developed over a period of time with the object of ensuring the best quality training in computer application. In the return of income the assessee claimed depreciation on "good-will". The Assessing Officer declined .....

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T v. Smifs Securities Ltd. [2012] 348 ITR 302 (SC), wherein it was held that the principle of ejusdem generis would strictly apply while interpreting the expression of "goodwill", which finds place in Explanation 3(b) to section 32(1). Accordingly it was held that "goodwill" is an asset under Explanation 3(b) to section 32(1) of the Act, therefore, eligible for claim of depreciation. The learned authorised representative also placed reliance on the following decision wherein .....

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Finance Co. Ltd. [2014] 221 Taxman 176 (Bom) (Mag.) ; and (vi) KEC International Ltd., order dated February 7, 2013 (Bombay High Court). 5. On the other hand, the learned Commissioner of Income-tax-Departmental representative relied on the orders of the authorities below. 6. We have carefully gone through the decision of the hon'ble Supreme Court in the case of CIT v. Smifs Securities Ltd. [2012] 348 ITR 302 (SC) and the decision of the hon'ble Bombay High Court as well as decision of co .....

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k of assets" shall mean- (a) tangible assets, being buildings, machinery, plant or furniture ; (b) intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature.' 10. Explanation 3 states that the expression 'asset' shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of sim ilar nature. A reading the .....

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