TMI Blog2016 (4) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation 3 states that the expression "asset" shall mean intangible assets, being knowhow, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. A reading of the words "any other business or commercial rights of similar nature" in clause (b) of Explanation 3 indicates that goodwill would fall under the expression "any other business or commercial rights of similar nature". The principle of ejusdem generis would strictly apply while interpreting the said expression which finds place in Explanation 3(b). The court was, accordingly, of the view that "goodwill" is an asset under Explanation 3(b) to section 32(1) of the Act, and accordingly, answered the question in favour of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring partners in the nature of compensation can be termed as goodwill and subsequently eligible for depreciation? 2. The assessment years are 2003-04 to 2006-07 and 2008- 09. The facts and circumstances of all the five cases are similar except for the assessment years and the amounts. Since the controversy involved in all these appeals is common, the same were heard together and are disposed of by this common order. 3. For the sake of convenience, reference is made to the facts as appearing in ITA No.203/Ahd/2012 for assessment year 2003-04. The assessee is a partnership firm engaged in the business of doing job work of embroidery. The assessee filed its return of income for assessment year 2003-04 on 30.06.2003 declaring total loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on which no depreciation was allowable, and hence, the depreciation claimed on goodwill cannot be allowed. It was, accordingly, urged that the appeals do give rise to a question of law, as proposed or as may be formulated by the court. 5. This court has considered the submissions advanced by the learned counsel for the appellant and has also perused the impugned order passed by the Tribunal as well as the orders passed by the lower authorities. 6. The facts as emerging from the record are that the assessee had shown acquisition of goodwill of an amount of ₹ 19,45,774/- and had claimed depreciation of ₹ 4,86,443/- @ 25% on the goodwill in assessment year 2003-04. It was the case of the assessee that an amount of ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;goodwill' on which depreciation was not allowable. The contention raised in the memorandum of appeal with regard to the amount not being 'goodwill', therefore, is not borne out from the findings recorded by the Assessing Officer and the Commissioner (Appeals). The Tribunal, in the impugned order, has not accepted the assessee's contention that the payment was for acquiring commercial rights and has proceeded on the footing that the payment was in the nature of 'goodwill' and placing reliance upon the decision of the Supreme Court in the case of Commissioner of Income Tax v. SMIFS Securities Ltd., (2012) 348 ITR 302, has allowed the claim for depreciation. 7. The Supreme Court in the case of Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
