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TMI Blog2016 (4) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that the issue under considering is covered by the order of the Hon ble ITAT, Jaipur Bench, Jaipur passed in the assessee s own case in ITA Nos. 405, 503, 504, 505, 506 507/JP/2010, Asstt. Years 2001-02, 07-08, 02-03, 03- 04, 04-05, 05-06 order dated 30/09/2011 wherein the Hon ble Bench has been pleased to delete similar addition. Therefore, he prayed to uphold the order of the ld CIT(A). 3. At the outset, the ld DR has vehemently supported the order of the Assessing Officer and prayed to reverse the order of the ld CIT(A). 4. We have heard the rival contentions of both the parties and perused the material available on the record. The identical issue involved in this appeal, has been decided by the Coordinate Bench in assessee s own case in ITA Nos. 405, 503, 504, 505, 506 507/JP/2010, Asstt. Years 2001-02, 07-08, 02-03, 03-04, 04-05, 05-06 order dated 30/09/2011. The operative portion of the Coordinate Bench s order is reproduced as under:- 8. We have heard rival submissions and considered them carefully. After considering the rival submissions and perusing the material on record, we find that the objection raised by AO which has been reiterated here befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the execution of the franchise agreement. According to AO it is implied that the said amount of ₹ 28 crore is not license and franchise rights but it forms part of goodwill devolved upon the assessee on which no depreciation is allowable. I have also gone through the copy of business transfer agreement dated 26.8.2000 between Dhillon Kool Drinks and Beverages Ltd. with the appellant, letter of intent issued by Pepsi Food Ltd. to the appellant on 26.8.2000 and agreement dated 10.8.2000 between Pepsico India Holding Ltd. with the appellant. Pepsico India Holding Ltd. is a subsidiary company of Pepsico Inc New York who is engaged in the business of manufacturing and distribution of Soft Drinks Beverages and Syrup Mix sold under the trade mark LEHAR owned by Pepsi Food Ltd. Pepsi Food Ltd. and Pepsico Inc granted franchise rights for bottling and distribution of their various products to Dhillon Kool Drinks and Beverages Ltd. for the territories of Punjab, Himachal Pradesh, certain parts of Haryana, New Delhi I Delhi the business of Dhillon Kool Drinks was in bad shape and since they had to pay an amount over ₹ 20 crores to Pepsico India Holding Ltd. and therefore, they w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hise rights were devolved upon the appellant company because for this purpose there is no agreement between the appellant and the seller namely DKD. In my considered view the assessing officer was also not justified in holding that said payment of ₹ 28 crore was for goodwill because in the business transfer agreement between the appellant and DKD there is no such mention and in any case the goodwill can only be transferred when there are profits with the transferor undertaking and undisputedly the transferor undertaking. namely DKD was in bad financial shape which could not pay more than ₹ 20 crore to Pepsico India Holding Ltd. and because of which they had to transfer their business to the appellant and therefore, this payment cannot be construed as payment for goodwill as held by assessing officer while giving a finding that no depreciation is allowable on such payment since, it is a goodwill. Further, on this issue there is direct judgment of ITAT Delhi Bench C in the case of Hindustan Coca Cola Beverages Pvt.Ltd. v/s DCIT Circle - 12(1) New Delhi dt.25.8.2009 in which Hon ble ITAT has held that true basis of depreciation allowance is character of an asset and not it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest, privileges, assets and liabilities in the National Capital Territory of Delhi for lwhich the assessee company offered to purchase the said business as a going concern subject to the seller arranging in favour of the assessee company by Pepsi Food Ltd. of the license and franchise rights to use the trademarks of Pepsi brand of the soft drinks. In view of these intentions an agreement was entered in between Pepsico India Holding Ltd. (PIH) and the assessee on 10.8.2000 in which PIH had agreed to nominate the assessee to acquire Delhi business from Dhillon Kool Drinks Beverages Ltd. (DKD) and the formal authorizations from PFL and PSI to undertake and conduct Delhi business was also to be obtained from the respective parties. In this background a letter of intent was issued by Pepsi Food Ltd. to the assessee company on 26.5.2000 i.e. the date on which business transfer agreement was executed between the assessee and M/s. DKD, and thereafter the assessee company has stepped into the shoes of seller and commenced the business of manufacturing and distribution of soft drinks brands owned by PFL. It is further noted that M/s. DKD was in bad shape and they had to pay an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good will cannot be allowed whereas there is a decision of Hon ble Kerala High Court in favour of the assessee i.e. in case of B. Raveendran Pillai (supra) wherein it is held that depreciation is allowable on good will. The ld. A/R has also informed that the decision of the Tribunal in case of Hindustan Coca Cola has been affirmed by the Hon ble Delhi High Court. Therefore, in view of the decision of Hon ble High Court, the depreciation has to be allowed on good will also. However, we are not inclined to go into detail whether depreciation on good will is allowable or not but the fact remains that the assessee has not purchased any good will but has purchased license, interest, privilege, franchise etc. from M/s. DKD which are undisputedly covered by section 32(1)(ii) and, therefore, the depreciation is allowable and the ld. CIT (A) has allowed the depreciation on these intangible assets, and we have no hesitation in confirming the order of ld. CIT (A) on this aspect. Accordingly we confirm the order of ld. CIT (A). By respectfully following the order of the Coordinate Bench in assessee s own case for the above respective assessment years, we uphold the order of the ld CIT(A) ..... 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