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TMI Blog2023 (8) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-Tax (Appeals) [CIT (Appeals)] passed in favour of the respondent. The appellant has essentially questioned the deletion of disallowance on account of depreciation on goodwill in terms of the order framed by the CIT (Appeals). 2. On facts, it is not disputed that the respondent had amalgamated with M/s Valere Power India Limited in terms of a Scheme of Amalgamation [Scheme] which came to be sanctioned by this Court on 05 February 2014. For the purposes of the present appeals, we take note of Clause 4.4 of the Scheme which came to be approved and which clause is extracted hereinbelow: - "4.4 The excess of value of assets over the value of liabilities of the Transferor Company and the amount of equity shares to be al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim of depreciation strongly contended that the goodwill has enumerated from the decision of the Hon'ble High Court and not out of accounting principles. It was brought to the notice of the CIT(A) that goodwill being a non tangible assets is eligible for depreciation u/s. 32 of the Act." 5. It ultimately proceeded to negate the challenge as raised resting its decision on the judgment of the Supreme Court in Commissioner of Income Tax, Kolkata vs. Smifs Securities Limited (2012) 13 SCC 488. In Smifs, the principal question which stood raised was whether goodwill is an asset within the meaning of Section 32 of the Income Tax Act, 1961 [The Act] and whether depreciation is allowable on the same. While answering that question, the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es had filed copies of the orders of the High Court ordering amalgamation of the above two companies; that the assets and liabilities of M/s YSN Shares and Securities (P) Ltd. were transferred to the assessee for a consideration; that the difference between the cost of an asset and the amount paid constituted goodwill and that the assessee Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee Company stood increased. This finding has also been upheld by the Income Tax Appellate Tribunal ("ITAT", for short). We see no reason to interfere with the factual finding." 6. As is manifest from the aforesaid judgment, it was categorically held that goodwill is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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