TMI Blog2016 (8) TMI 1561X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the assessee. Further, the deficit in the value of assets over the value of liabilities of GIL taken over after adjusting the aggregate value of the equity shares issued to the members of GIL, was treated as goodwill in the books of the assessee-company. In view of the authoritative pronouncement of the Hon'ble Supreme Court in the case of Smifs Securities Ltd. [ 2012 (8) TMI 713 - SUPREME COURT] , it cannot be denied that goodwill is an asset qualifying for depreciation u/s 32(1)(ii) . The plea of the Revenue that no amount has been paid for its acquisition does not defeat the claim of depreciation allowed by CIT(A). Notably, goodwill has arisen in the present case consequent to a scheme of amalgamation approved by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above ground be set aside and that of the Assessing Officer be restored. 3. The solitary controversy in this appeal arises from the action of CIT(A) in directing that depreciation u/s 32 of the Act be allowed to the assessee on goodwill. 4. Briefly put, the relevant facts are that the respondent-assessee is a company incorporated under the provisions of Companies Act, 1956 and is engaged in the business of manufacture of duplicating machines and trading of copiers, fax machines, photographic printing and other allied equipment. The Assessing Officer noticed that assessee had debited an expenditure in the Profit Loss Account on account of amortization of goodwill of ₹ 3,58,16,000/- (4th year) whereas the same was adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of CIT(A) in allowing the claim of depreciation, Revenue is in appeal before us. 6. Before us, the only plea of the Revenue is that in the present case assessee has not paid any consideration for acquisition of goodwill at the time of amalgamation and, therefore, the claim of depreciation has been wrongly allowed. 7. On the other hand, the learned representative for the respondent-assessee placed reliance on the order of the CIT(A), wherein the claim has been allowed following the judgment of the Hon'ble Supreme Court in the case of Smifs Securities Ltd. (supra) as well as the judgment of the Hon'ble Bombay High Court in the case of Taj Sats Air Catering Ltd., ITA No. 1096 of 2012 dated 3.9.2012. 8. We have carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the claim was in terms of the directions of Hon'ble High Court passed while approving the scheme of arrangement. The said claim has been denied by the Assessing Officer and also by the CIT(A) and it is not the subject matter of consideration before us. The CIT(A), in the alternate, allowed assessee s claim for depreciation on the element of goodwill with reference to the figure of WDV which was to be reworked for each year starting from Assessment Year 2005-06. Against such a decision, Revenue is in appeal before us. 9. Quite clearly, in terms of scheme of amalgamation, the assets and liabilities of GIL stood transferred to the assessee. Further, the deficit in the value of assets over the value of liabilities of GIL taken o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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