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TMI Blog2017 (3) TMI 1823X X X X Extracts X X X X X X X X Extracts X X X X ..... payment and is now covered u/s 28(va) of the Act, it would be revenue in nature - 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. - Shri Jason P. Boaz, Accountant Member and Shri Sanjay Garg, Judicial Member For The Appellant : Shri Saurabh Kumar Rai For The Respondent : Shri Alpesh Gandhi and Ms. Shardha Kothari ORDER Per Jason P. Boaz, A.M. This appeal by Revenue is directed against the order of the CIT(A)-8, Mumbai dated 27.03.2015 for A.Y. 2009-10. 2. The facts of the case, briefly stated, are as under: - 2.1 The assessee, a company engaged in the business of manufacturing and trading in household insecticides and pes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act and even the Tax Auditors, in their report in Form No. 3D, have also noted that the provisions of Explanation 4A to section 43(1) are applicable. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in allowing the claim of depreciation on goodwill without appreciating the fact that the decision is not apt in terms of proviso to Rule 11 of the Income Tax Rules, 1963 and the issue involved of depreciation on goodwill as revenue expenditure has never been examined? 4. Ground No. 1 Disallowance on account of Depreciation ₹ 54,34,110/- 4.1 In this ground (supra), Revenue assails the impugned order of the learned CIT(A) as being erroneous in deleting the disallowance made on account of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal expenditure incurred on acquiring of assets from Bilag. In this regard, at the very outset, Ld Counsel for the assessee brought our attention to the order of the Tribunal for the AY 2006-07 (supra) and mentioned that an identical issue was decided by the Tribunal vide ground no.3 of the said order of the Tribunal dated 28.3.2014. Paras 21 to 33 of the said Tribunal s order are relevant in this regard. After hearing both the parties and on perusal of the said order of the Tribunal (supra), we find the Tribunal has decided the identical issue in favour of the assessee. For the sake of completeness of this order, the relevant paras 31 to 33 of the said Tribunal s order are extracted which read as under: 31. We have heard the arguments and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), we uphold the order of the learned CIT(A) deleting the disallowance on account of excess claim of depreciation amounting to ₹ 54,34,110/-. Consequently, ground No. 1 of Revenue s appeal is dismissed. 5. Ground No. 2 Depreciation on Goodwill 5.1 In this ground, Revenue assails the order of the learned CIT(A) in allowing the claim of depreciation on Goodwill. The learned D.R. was heard in support of the grounds raised. 5.2 Per contra, the learned A.R. of the assessee supported the impugned order of the learned CIT(A) in allowing the assessee s claim of depreciation on Goodwill. The learned A.R. drew the attention of the Bench to the orders of the Coordinate Bench of this Tribunal in the assessee s own case in ITA No. 3077/Mum/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-07 (supra) and brought our attention to para 3 of the said order of the Tribunal (supra) wherein the additional ground was considered, admitted and adjudicated. Paras 45 to 47 are relevant in this regard wherein the Tribunal allowed the claim of depreciation on goodwill relying on the judgment of the Apex Court in the case of Smifs Securities Ltd reported in 348 ITR 302. After hearing both the parties, we have perused the said para 44 to 47 and for the sake of completeness of this order, the same are extracted as under: 44. The assessee had also filed another additional GOA to allow depreciation on goodwill and non compete fee. 45. We have gone through the submissions made by the assessee and we find that the issue of goodwill stands cove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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