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TMI Blog2019 (12) TMI 1645X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition. That being so, we decline to interfere in the order passed by the ld. CIT(A), his order - Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... niture; (b) intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature 1.2 Therefore on a bare reading of the provisions of section 32(1) of the Act read with Explanation 3, it is clear that depreciation is allowable on any other business or commercial rights of similar nature'. 1.3 To understand whether goodwill can be considered as any other business or commercial rights of similar nature attention of your goodself is invited to the decision of the Hon'ble Supreme Court in the ease of the Commissioner of Income Tax vs. Smifs Securities Ltd [2012] 24 taxmann.com 222 (SC). The Hon'ble Apex Court held that depreciation is allowable on 'goodwill' arising pursuant to a merger. 1.4 The decision of the Apex Court has also been followed in the judicial pronouncements mentioned below wherein it was held that depreciation is allowable on goodwill arising on merger: - DCIT vs Worldwide Media (2014) (43 Taxmann.com 18 - Mum ITAT -Triune Energy Services (P) Ltd. us DCIT (2016) (65 taxmann.com 288 - Del HC) -Cyber India Online Ltd. vs ACIT (2014)(42 Taxmann.com 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled in course o/ assessment, merely remarked that the value of goodwill is not available from the financing for financial gear 2006-07 and disallowed the depreciation claimed by the Appellant. The disallowance made by the Ld. AO is grossly erroneous and not justified and is liable to be deleted. 1.12 It is humbly submitted that it is a well-established fact that decisions of the Supreme Court, is law of the land and binding on all Courts/ Tribunals and other authorities. 1.13 Reference in this regard is drawn to the decision in the case of CIT us Vallabhdas Vitaldas (1985) 253 ITR 543, wherein it has been held that where there is a judicial pronouncement by the highest court of the land, the same is binding on all courts. 1.14 Also, as aforesaid, the claim of depreciation on Goodwill was allowed for the previous year i.e. A.Y.2011-12 by your predecessor in this office, it is humbly submitted before your goodself that the claim of depreciation on goodwill should be allowed as deduction on the principle of res judicata. 4.3. DECISION : On careful examination of assessment order and documentary evidences filed by the Ld. A/R, it has been observed that the AO made a rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation on goodwill. 9. Brief facts qua the issue are that on perusal of submission made by the assessee company on 14.03.2014 and also going through the computation of income filed with the revised return of income on 09.01.2013, it was noted that assessee has claimed depreciation on goodwill of Rs.2,50,00,000/-. During the course of assessment proceedings, the assessee furnished written submission on 14.03.2014 regarding claim of depreciation on goodwill, which is reproduced below: As informed in our earlier hearings, the erstwhile Shristi Infrastructure Development Corporation (having its registered office at Delhi) had merged into Peerless Abasan Finance Limited (PAFL) as per order of both Hon'ble High Court at Delhi & Hon'ble High Court at Kolkata and then the name PAFL was changed to Shristi Infrastructure Development Corporation Ltd. As per the amalgamation scheme, the difference between the cost of the net assets and the amount paid by the transferee company, pursuant to amalgamation, has been recorded as goodwill. Hence, based on the aforesaid, a sum of INR 100,000,000 has been recorded as goodwill in the books of SIDCL during F. Y. 2006-07.The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing repeated for the sake of brevity. On the other hand, the ld. Counsel for the assessee defended the order passed by ld CIT(A). 12. We have heard both the parties and perused the material available on record. We note that pursuant to scheme of amalgamation approved by the Hon'ble High court of Delhi on 22nd May, 2007 and Hon'ble Calcutta High Court on 20th June, 2007, the erstwhile Shristi Infrastructure Development Corporation Ltd. merged with Peerless Abasan Finance Ltd. (PAFL). Post-merger, the name of Peerless Abasan Finance Ltd. was changed to Shristi Infrastructure Development Corporation Ltd. In terms of the Scheme of amalgamation, the purchase consideration paid by PAFL to erstwhile Shristi Infrastructure Development Corporation Ltd. exceeded the cost of net assets taken over. Consequently, a sum of INR 100,000,000 was recorded as goodwill in the books of the assessee during the FY 2006-07.For the assessment year under consideration, the assessee filed a revised return of income and claimed depreciation on goodwill recorded in books at the rate of 25% being an eligible asset in terms of section 32(1) of the Act. We note that by going through the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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