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TMI Blog2018 (8) TMI 2049X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld CIT(A) erred was justified in holding that rights acquired for acquisition of Customer Contracts falls within the expression "any other business or commercial rights of similar nature" as defined in Explanation 3 to Section 32{2){ii) of the Income Tax Act, 1961 and thus eligible for depreciation under Section 32 of the Income Tax Act 1961" 2. "Whether on the facts and in the circumstances of the case and in Law the Ld. CIT(A) was justified in allowing depreciation on amount paid by the assessee company for acquiring Customer Contracts even though such payment made by the assessee company could not be considered as purchase of goodwill or any other business or commercial right within the meaning of Section 32{1}(ii) of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Blue Star Ltd. under a Deed of Adherence, assigned the business acquired from the DSGCPL to the assessee company. In the computation of income from the relevant assessment year, the assessee company claimed the depreciation on the intangible and goodwill acquired out of the aforesaid acquisition. The company accounted the customer contract valued at Rs. 29,99,75,000/- as intangible asset in its books of account and claimed depreciation of Rs. 5,62,45,313/- @ 25% on WDV of Rs. 22,49,81,250/- in the instant year. The claim of the depreciation of the assessee was declined to the extent of amount of Rs. 5,62,45,313/- and was added to the income of the assessee. The assessee also claimed the professional Fees paid to KPMG to the tune of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the submission made on behalf of the appellant. As rightly pointed out by the appellant, this issue is covered in favour of the appellant in earlier year wherein CIT(A) in its order dated 29.07.2016 has held as under:- "In the instant case, the appellant has claimed depreciation on the customer contracts being intangible asset. Considering the relevant judicial decisions cited by the AR it is clear that the customer contract falls under the expression" any other business or commercial rights of similar nature as defined in Explanation 3 to sec. 342(1)(ii) and hence eligible for depreciation. Respectfully following jurisdictional ITAT Mumba- in the case of Indian Capital Markets P. Ltd. and also following the Hon'ble SC decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which can be used as a tool to carry on the business. It can also be seen from the angle of purchase of entire marketing net work by the assessee from M/s. AFC even if considered from this angle the assessee is eligible for depreciation as held by the Tribunal. In ITA.181/M/2008 in the case of M/s. Jyoti India Metal Industries P. Ltd. Vs. ACIT. The Hon'ble Supreme Court in the case of CIT Vs Smifs Securities Ltd. (2012) 24 Taxmann.com 222 has held that goodwill is an asset eligible for depreciation. After considering the entire gamut of facts of instant case, it was held that the assessee is entitled for depreciation on payment of Rs. 2.50 crores at 25 percent which comes to Rs. 62,50,000/- as claimed by the assessee. The AO is accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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