TMI Blog2018 (6) TMI 1723X X X X Extracts X X X X X X X X Extracts X X X X ..... e - AO is directed to allow the depreciation on goodwill as per law and consider the payment of non-compete fee, in terms of section 28(va) Decided in favour of Assessee. - ITA No.578/Mum/2017 - - - Dated:- 25-6-2018 - SRI RAJENDRA, AM AND SRI PAWAN SINGH, JM For the Appellant : Shri Paras S. Savla AR For the Respondent : Shri Aaraj Garodia, DR ORDER PER PAVAN SINGH, JM: This appeal by the revenue is directed against the order of Commissioner of Income Tax (Appeals)-58, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-58/348(TR)2-14-15 dated 21.10.2016. The Assessment was framed by the Asst. Commissioner of Income Tax, 1(3)(1), Mumbai (in short ACIT) for the assessment year 2010-11 vide order dated 16.4.2014 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciding the appeal of assessee in ITA No.3078/Mum/2012 dated 28.3.4014 passed the following order: 31. We have heard the arguments and have perused the details as appended in the APB. The acquisition of the machinery from Bilag is not disputed, it is also not disputed that the machinery is a capital asset and whatever expense is incurred on such outlay, it shall bear the character of capital and added to the cost. Since this is a fact, then applying the ratio laid down by Hon'ble Bombay High Court in the case of Ciba of India Ltd. vs CIT, reported in 70 Taxman 505 (Bom), wherein it has been held ... this being so, ... this amount would form part of the cost of the assessment for the purpose of depreciation... 32. In such a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the issue of goodwill stands covered by the Hon ble Supreme Court in the case of Smifs Securities Ltd reported in 348 ITR 302, wherein the Hon ble Supreme Court has held that intangibles like goodwill are eligible for depreciation. 46. However in so far as non compete fee is concerned, the nature of this payment is now covered under section 28(va) of the Income Tax Act, 1961 hence, it would be revenue in nature. 47. We, therefore, direct the AO to allow the depreciation on goodwill as per law and consider the payment of non compete fee, in terms of section 28(va), to consider to allow ₹3,05,40,600/- as revenue expenditure. 8. We have further noted that the order of assessment year 2006-07 was further in appeal for assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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