M/s. Maya Entertainment Ltd., Mumbai V. Deputy Commissioner of Income-tax, Pune

ITA 485/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6943 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 22-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: S C TIWARI
• Keywords: Capital asset; Depreciation; Fair market value; Scheme of amalgamation; Revenue expenditure
• Section: 143(3); 28

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.485/PUN/2016 / ASSESSMENT YEAR : 2011-12 M/S. MAYA ENTERTAINMENT LTD., (EARLIER KNOWN AS AVALON AVIATION ACADEMY PVT. LTD.) APTECH HOUSE, A-65, MIDC MAROL, ANDHERI (E), MUMBAI 400 093. PAN : AAFCA8287M. . / APPELLANT V/S DY.COMMISSIONER OF INCOME TAX 1 (1), PUNE. . / RESPONDENT ASSESSEE BY : SHRI S.C. TIWARI. REVENUE BY : SHRI MUKESH JHA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE U/S 253 OF THE I.T. ACT IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A)-1, PUNE DT. 28.01.2016 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF AVIATION TRAINING AND HOSPITALITY INDUSTRY. ASSESSEE FILED IT S ORIGINAL RETURN OF INCOME FOR A.Y. 2011-12 ON 28.09.2011 DE CLARING / DATE OF HEARING : 13.12.2017 / DATE OF PRONOUNCEMENT: 20.12.2017 2 TOTAL LOSS OF RS.6,11,20,544/-. THE CASE WAS SELECTED FOR SCR UTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.12.03.2014 AND THE TOTAL LOSS WAS DETERMINED A T RS.5,41,67,932/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.28.01.2016 (IN APPEAL NO.PN/CIT(A)-1/DCIT/CIR.1(1)/PN/114/2014-15) GRANTED PART IAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIV E GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND FOR THE REASONS STATED IN STATEMENT OF FACTS TO THIS APPEAL THE LEARNED COMMISSIONER (APPEAL) ERRED IN FACTS AND IN LAW IN DISALLOWING DEPRECIATION OF GOODWILL OF RS.10,17,107/- 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICE D THAT IN F.Y. 2005-06 ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH AVIATION ACADEMY, A PROPRIETARY CONCERN AND IT ACQUIRED V ARIOUS ASSETS AND LIABILITIES FOR A LUMP SUM CONSIDERATION OF RS.75,00,000/-. THE EXCESS OF THE CONSIDERATION OVER THE FAIR VALUE OF THE ASSETS ON THE DATE OF ACQUISITION OF RS.60,85,577/- WAS TREATED BY THE ASSESSEE AS GOODWILL. AO ALSO NOTICED THA T ASSESSEE HAD TREATED THE EXCESS OF REVENUE EXPENSES OVER THE INCOME FOR THE PERIOD FROM 01.04.2006 TO 19.07.2006 (PRE-INCORPORATION PER IOD) AT RS.42,77,578/-. HE NOTED THAT ASSESSEE HAD CONSIDERED T HE AGGREGATE INTANGIBLE ASSETS OF RS.1,01,79,754/- IN A.Y. 2007-0 8 AND HAD CLAIMED DEPRECIATION AGGREGATING TO RS.10,17,107/- ON T HE SAME. AO NOTICED THAT IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE IN A.Y. 2010-11. HE THEREFORE FOLLOWING THE ORDER IN ASSESSE ES OWN CASE IN EARLIER YEAR, REJECTED THE CLAIM OF GOODWILL AT RS.1 0,17,107/-. 3 AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER : 8. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AS WELL AS SUBMISSIONS MADE IN THIS REGARD. IN THIS CASE BRIEF FACTS EMERGING OUT OF THE ASSESSMENT ORDER AS WELL AS SUB MISSION OF THE APPELLANT IS THAT THE APPELLANT ACQUIRED ASSETS AND LIABILITIES FROM AVALON AVIATION ACADEMY, A PROPRIETARY CONCERN , FOR A LUMP SUM CONSIDERATION OF RS.75,00,000/- IN FINANCIAL YE AR 2005-06. THE EXCESS OF THE CONSIDERATION OVER THE FAIR VALUE OF THESE ASSETS AS ON THE DATE OF ACQUISITION I.E. 19/7/2006 BEING RS. 60,85,577/- WAS TREATED AS GOODWILL AND DEPRECIATIO N OVER THE SAME WAS CLAIMED @ 25%. FURTHER, AO ALSO CAPITALIZED EXCESS OF REVENUE EXPENDITURE OVER INCOME FROM 1/4/2006 TO 19 /7 /2006 BEING RS.42,77,578/- ELIGIBLE FOR DEPRECIATION AFTE R CAPITALIZING THE SAME IN THE BOOKS, OTHERWISE TOO, THE ABOVE AMO UNT OF RS.42,77,578/- WAS CLAIMED TO BE ALLOWED AS REVENUE EXPENDITURE AS PER SECTION 170(1)(B) OF THE IT ACT , 1961. ACCORDINGLY, THE DEPRECIATION OF RS. 10,17,107/- WA S CLAIMED ON THE TOTAL AMOUNT OF RS.1,01,79,754/- WHICH WAS WORK ED OUT AS UNDER: PARTICULARS AMOUNT (RS.) 1 GOODWILL (INCLUDING NON-COMPETE FEES)PURCHASE OF AVALON AVIATION ACADEMY 60,85,577 LESS: DEPRECIATION (1/4/06 TO 19/7/06 1,83,401 59,02,176 2 EXCESS OF REVENUE EXPENSES OVER THE INCOME FOR THE PERIOD 1/4/06 TO 19/7/06 42,77,578) TOTAL 1,01,79,754 9. THERE IS NO DOUBT THAT AFTER THE DECISION OF HON 'BLE. SUPREME COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD.[2012] 348 ITR 302 (SC), THE ISSUE OF ALLOWING DEPRECIATION ON GOODWIL L HAS BEEN SETTLED IN FAVOUR OF THE APPELLANT. HOWEVER, IT IS IMPERATIVE TO VERIFY WHETHER THE CLAIM OF DEPRECIATION ON THE SO- CALLED GOODWILL IS GENUINE OR NOT. AS FAR AS AMOUNT OF RS.60.85 LAC S IS CONCERNED, THE SAME HAS BEEN CLAIMED AS NON- COMPETE FEES MUTU ALLY AGREED BY BOTH THE PARTIES BUT NO EVIDENCE HAS BEEN FURNIS HED IN THIS REGARD. IN FACT, THIS AMOUNT HAS BEEN CLAIMED AS EX CESS OVER FAIR VALUE OF ASSETS ON THE DATE OF ACQUISITION AND CAPI TALIZATION OF THE SAME IS A MERE BOOK ENTRY. IN FACT, THE AMOUNT SHOU LD BE OVER BOOK VALUE AND NOT FAIR VALUE AS PER RATIO OF THE D ECISION OF SMIFS SECURITIES. THE QUANTUM OF GOODWILL HAS BEEN FURTHE R DISPUTED BY THE AO ON THE GROUND OF CAPITALIZATION OF RS.42,77, 578/- BEING EXCESS OF REVENUE EXPENDITURE OVER INCOME FROM 1/4/ 2006 TO 19/7/2006. THE OBJECTION OF THE AO IS QUITE JUSTIFI ED IN VIEW OF EXPLANATION 7 TO SECTION 43(1) OF THE IT ACT, 1961. FOR THE SAKE OF CLARITY, SECTION 43(1) AND EXPLANATION 7 ARE REPROD UCED AS UNDER: 4 SECTION 43: IN SECTIONS 28 TO 41 AND IN THIS SECTION, UNLESS TH E CONTEXT OTHERWISE REQUIRES (1)ACTUAL COST MEANS THE ACTU AL COST OF THE ASSETS TO THE ASSESSEE, REDUCED BY THAT PORTION OF THE COST THEREOF, IF ANY, AS HAS BEEN MET DIRECTLY OR INDIRECTLY BY A NY OTHER PERSON OR AUTHORITY: EXPLANATION 7.-WHEREIN A SCHEME OF AMALGAMATION, AN Y CAPITAL ASSET IS TRANSFERRED BY THE AMALGAMATING COMPANY TO THE AMALGAMATED COMPANY AND THE AMALGAMATED COMPANY IS AN INDIAN COMPANY, THE ACTUAL COST OF THE TRANSFERRED CAPITAL ASSET TO THE AMALGAMATED COMPANY SHALL BE TAKEN TO BE THE SA ME AS IT WOULD HAVE BEEN IF THE AMALGAMATING COMPANY HAD CON TINUED TO HOLD THE CAPITAL ASSET FOR THE PURPOSE OF ITS OWN B USINESS.. 10. PLACING RELIANCE ON THE ABOVE EXPLANATION, PANA JI TRIBUNAL DENIED DEPRECIATION IN THE CASE OF CHOWGULE & CO. P.LTD. VS. ACIT [2011] 137 TTJ 596 (PANAJI). IT IS INTERESTING TO N OTE THAT THE SUPREME COURT IN THE CASE OF SMIFS SECURITIES HAS NOT CONSI DERED THE APPLICABILITY OF EXPLANATION 7 TO SECTION 43(1) WHI LE ALLOWING DEPRECIATION ON GOODWILL ARISING OUT OF AMALGAMATIO N. THE GOODWILL BEING INTANGIBLE ASSET, BEING NOT APPEARING IN THE BOOKS OF ACCOUNT OF EARLIER CONCERN, HAS TO BE CONSIDERED IN A TRANSPAR ENT MANNER EITHER THROUGH VALUATION BY REGISTERED VALUER OR THROUGH A GREEMENT ITSELF INDICATING BOOK VALUE, TOTAL LIABILITY AND NET VALU E OF ASSETS AND CONSIDERING ABOVE NET VALUE OF ASSETS COULD HAVE BE EN CAPITALIZED AS GOODWILL IN FAIR AND TRANSPARENT MANNER. THIS EXERC ISE HAS NOT BEEN DONE. FURTHER, BY NO STRENGTH OF IMAGINATION RS.42, 77,578/- BEING EXCESS OF REVENUE EXPENDITURE OVER INCOME CAN BE TR EATED AS GOODWILL. THEREFORE, THE AO HAS MADE NO MISTAKE IN HOLDING SO . THE DENIAL OF CLAIM U/S 170(1)(B) BY THE AO IS LOGICAL AND DOES N OT CALL FOR INTERFERENCE. ACCORDINGLY, ACTION OF THE AO IN DENY ING DEPRECIATION AMOUNTING TO RS. 10,17,107/- ON THE ALLEGED GOODWIL L IS UPHELD. THUS, THE GROUND IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US. 4. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT IDENTICA L ISSUE AROSE IN ASSESSEES OWN CASE IN A.Y. 2007-08 AND THE ISS UE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO-ORDINATE BEN CH OF THE TRIBUNAL IN ITA NO.1914/PUN/2014 ORDER DT.03.03.2017. HE PLACED ON RECORD THE COPY OF THE ORDER AND POINTED TO THE R ELEVANT FINDINGS OF THE TRIBUNAL. HE SUBMITTED THAT THE FACTS IN THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THAT OF EARLIER YEAR AND T HEREFORE FOLLOWING THE ORDER OF TRIBUNAL IN EARLIER YEAR, THE ISSUE BE DECIDED 5 ACCORDINGLY. LD.D.R. DID NOT CONTROVERT THE SUBMISSIONS MA DE BY LD.A.R. BUT HOWEVER SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WIT H RESPECT TO DEPRECIATION ON GOODWILL. WE FIND THAT IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE IN A.Y. 2007-08 BEFORE THE CO-ORDINA TE BENCH OF THE TRIBUNAL. THE CO-ORDINATE BENCH OF THE TRIBUNAL DECIDE D THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE ARISING IN THE PRESENT APPEAL IS IN RE LATION TO THE CLAIM OF DEPRECIATION ON GOODWILL. THE ASSESSEE HAD TAKEN OV ER THE SOLE PROPRIETARY CONCERN UNDER THE NAME AND STYLE OF AVA LON AVIATION ACADEMY AS A GOING CONCERN AS PER THE AGREEMENT DAT ED 09TH SEPTEMBER, 2006. THE SAID GOING CONCERN WAS TAKEN O VER ALONG WITH ALL THE ASSETS, LIABILITIES, RIGHTS, PRIVILEGES, PE NDING CONTRACTS, PERMISSIONS, ETC. AS A SLUMP SALE, IN AN AS-IS-WHER E-IS IS CONDITION FOR THE GOOD AND VALUABLE CONSIDERATION. AS PER THE TER M OF THE AGREEMENT THE TOTAL CONSIDERATION WAS FIXED AT RS.7 5,00,000/-. IT WAS AGREED BETWEEN THE PARTIES THAT THE SALE OF THE AC QUIRED BUSINESS UNDERTAKING BY THE SELLER TO THE PURCHASER PURSUAN T THERETO WAS AS AND BY WAY OF A SLUMP SALE AND THE PURCHASE CONSIDE RATION WAS A COMPOSITE PURCHASE CONSIDERATION FOR THE WHOLE OF T HE ACQUIRED BUSINESS UNDERTAKING AND NO PURCHASE CONSIDERATION SHALL BE ASSIGNED TO SPECIFIC ITEMS TO THE ACQUIRED BUSINES S UNDERTAKING, AS PER ARTICLE 2.2 OF THE AGREEMENT. WHILE CLARIFYING AND INTERPRETING THE TERM ACQUIRED BUSINESS UNDERTAKING, AS PER ARTICL E 1.1.1, IT WAS AGREED UPON THAT THE SELLERS BUSINESS RUN UNDER TH E NAME AND STYLE OF AVALON AVIATION ACADEMY WHICH IS, INTER ALIA, EN GAGED IN AVIATION AND HOSPITALITY TRAINING; THE GOODWILL RELATING TO THE SELLERS BUSINESS; ALL THE RIGHTS, ASSETS, CURRENT ASSETS AND OBLIGATI ON, ALL INTELLECTUAL PROPERTY RIGHTS, BRANDS, LOGOS, PROPERTIES OF EVERY KIND AND DESCRIPTION, ETC., INCLUDING THE RIGHTS IN THE LIST OF PROPERTIES SET OUT IN ANNEXURE 1; THE LIABILITIES OF THE SELLER, AS ON TH E TRANSFER DATE AS LISTED IN THE BALANCE SHEET AS ON 31ST MARCH, 2006; THE AND OBLIGATION OF THE SELLER UNDER THE PENDING CONTRACTS, IF ANY A ND THE EMPLOYEE, SHALL BE TAKEN OVER. MEANING THEREBY THAT BY PAYING THE AGREED CONSIDERATION THE ASSESSEE WAS NOT ONLY TAKING OVER THE BUSINESS AS A GOING CONCERN BUT WAS ALSO TAKING OVER ALL THE RI GHTS, LIABILITIES, ASSETS, PENDING CONTRACTS BENEFITS AND OBLIGATION O F THE CURRENT CONTRACTS, AS BUNDLE OF RIGHTS. THIS WAS IN ADDITIO N TO RIGHTS OF OBLIGATION OF THE SELLER ON THE TRANSFER DATE, THE EMPLOYEES OF THE SAID CONCERN AND ALSO GOODWILL RELATING TO THE SELLER BU SINESS. THE UNDERSTANDING BETWEEN THE PARTIES WAS CLEAR AND NO SPECIFIC PRICE WAS ATTRIBUTED TO THE ASSETS AND LIABILITIES SINCE IT WAS A CASE OF SUMP SUM CONSIDERATION BEING PAID FOR TAKEOVER OF T HE ASSETS. THE COPY OF THE AGREEMENT IS PLACED AT PAGES 27 TO 40 O F THE PAPER BOOK. UNDER SUCH FACTS AND CIRCUMSTANCES THE ASSESSEE WHI LE FILING THE 6 RETURN OF INCOME HAD WORKED OUT THE EXCESS CONSIDER ATION OVER THE VALUE OF THE ASSETS AND LIABILITIES AT RS.60,85,577 /-, AS UNDER : PARTICULARS FAIR VALUE (RS.) FIXED ASSETS 10,59,825 CURRENT ASSETS 5,81,943 CURRENT LIABILITIES (2,27,345) NET ASSETS 14,14,423 CONSIDERATION 75,00,000 GOODWILL 60,85,577 10. ON SUCH GOODWILL, THE ASSESSEE CLAIMED DEPRECIA TION WHICH HAS BEEN DENIED BY THE AUTHORITIES BELOW HOLDING THAT T HE EXCESS AMOUNT OVER ASSETS AND LIABILITIES IS NOT GOODWILL. THIS I S THE FINDING OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSING OFFICER HAD DENIED THE DEPRECIATION AS GOODWILL WAS NOT PART OF INTANGIBLE ASSETS U/S. 32(1) OF THE ACT. THE DEPRECIATION WAS ALLOWAB LE ONLY ON TANGIBLE ASSETS AND NOT INTANGIBLE ASSETS. THE BASIS FOR DIS ALLOWANCE WAS THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF COMMISSIONER OF INCOME TAX VS. M/S. TECHNO SHARES ST OCKS LTD. & OTHERS (SUPRA) WHICH WAS AGAINST THE ASSESSEE. HOWE VER, THE HONBLE SUPREME COURT IN TECHNO SHARES & STOCKS LTD . & ORS. VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS REVERSED THE FINDINGS OF HONBLE BOMBAY HIGH COURT AND CONSEQUENTLY THE RATI O APPLIED BY THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TA X (APPEALS) IS NOT AVAILABLE FOR APPLICATION. IN ANY CASE THE HON BLE SUPREME COURT IN LATER DECISION IN COMMISSIONER OF INCOME TAX VS. SMIFS SECURITIES LTD. (SUPRA) HAD HELD THAT GOODWILL IS AN INTANGIBL E ASSET AS PER EXPLANATION 3(B) TO SECTION 32(1) OF THE ACT AND CO NSEQUENTLY THE ASSESSEE IS ENTITLED TO CLAIM THE DEPRECIATION ON S UCH GOODWILL. APPLYING THE SAID RATIO WE HOLD THAT THE ASSESSEE I S ENTITLED TO CLAIM THE DEPRECIATION ON GOODWILL. 11. NOW, COMING TO THE STAND OF COMMISSIONER OF INC OME TAX (APPEALS) THAT THE EXCESS AMOUNT PAID BY THE ASSESS EE OUT OF LUMP SUM CONSIDERATION IS NOT GOODWILL BUT SOMETHING ELS E. THE HONBLE DELHI HIGH COURT IN TRIUNE ENERGY SERVICES PRIVATE LIMITED & ORS. VS. DEPUTY COMMISSIONER OF INCOME TAX & ORS. (SUPRA) ON SIMILAR ISSUE OF SLUMP SALE AS PER BUSINESS TRANSFER AGREEMENT WHERE IN LUMP SUM CONSIDERATION WAS PAID, HAD HELD THAT THE BALANCE C ONSIDERATION AFTER DEDUCTING THE VALUE OF ASSETS AND LIABILITIES IS GO ODWILL WHICH EXPRESSION 'GOODWILL' SUBSUMES WITHIN IT A VARIETY OF INTANGIBLE BENEFITS THAT WERE ACQUIRED WHEN A PERSON ACQUIRES A BUSINESS OF ANOTHER AS A GOING CONCERN. IT WAS FURTHER HELD THA T IT IS WELL ESTABLISHED THAT 'GOODWILL' IS AN INTANGIBLE ASSET, WHICH IS REQUIRED TO BE ACCOUNTED FOR WHEN A PURCHASER ACQUIRES A BUSINE SS AS A GOING CONCERN BY PAYING MORE THAN THE FAIR MARKET VALUE O F THE NET TANGIBLE ASSETS, THAT IS, ASSETS LESS LIABILITIES. THE HON BLE HIGH COURT THEREFORE HELD THAT GOODWILL INCLUDED A HOST OF INT ANGIBLE ASSETS, WHICH A PERSON ACQUIRES, ON ACQUIRING A BUSINESS AS A GOING CONCERN AND VALUING THE SAME AT THE EXCESS CONSIDERATION PAI D OVER AND ABOVE THE VALUE OF NET TANGIBLE ASSETS IS AN ACCEPT ABLE ACCOUNTING PRINCIPLE AND THUS, FURTHER EXERCISE TO VALUE THE G OODWILL IS NOT WARRANTED. IN THIS REGARD RELIANCE WAS PLACED ON TH E RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN COMMISSIONER OF INC OME TAX VS. SMIFS SECURITIES LTD. (SUPRA) AND ON COMMISSIONER OF INCOME TAX VS. 7 B.C. SRINIVASA SETTY REPORTED IN (1981) 128 ITR 294 (SC) AND THE CLAIM OF THE ASSESSEE WAS ALLOWED. 12. THE FACTS AND THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US ARE IDENTICAL TO THE FACTS AND ISSUE BEFORE THE HON BLE DELHI HIGH COURT (SUPRA) AND APPLYING THE SAID PRINCIPLE WE HO LD THAT THE BALANCE CONSIDERATION OUT OF SLUMP SALE CONSIDERATI ON AFTER ADJUSTING THE VALUE OF ASSET AND LIABILITIES IS, THE VALUE OF GOODWILL IN THE HANDS OF THE ASSESSEE, WHICH IS INTANGIBLE ASSETS, ON WHI CH THE ASSESSEE IS ELIGIBLE TO CLAIM THE DEPRECIATION. ACCORDINGLY, WE HOLD SO. 13. BEFORE PARTING WE MAY REFER TO RELIANCE PLACED BEFORE US BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE RATIO LAID DOWN IN CHOWGULE & CO. (P.) LTD. VS. ASSISTANT COMMI SSIONER OF INCOME TAX (SUPRA) WHICH DO NOT STAND AFTER THE RAT IO BEING LAID DOWN BY THE HONBLE DELHI HIGH COURT. IT MAY BE QUALIFIE D HEREIN ITSELF THAT THE FACTS BEFORE THE HONBLE DELHI HIGH COURT AND T HE FACTS OF THE PRESENT CASE ARE IDENTICAL AND CONSEQUENTLY THE RAT IO LAID DOWN BY THE HONBLE DELHI HIGH COURT SHALL PREVAIL. ACCORDI NGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON GOODWILL . THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 6. BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY BINDI NG DECISION IN ITS SUPPORT NOR HAS POINTED OUT ANY DISTINGUISH ING FEATURE IN THE FACTS OF THE PRESENT CASE AND THAT OF EAR LIER YEAR. WE THEREFORE, FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN EARLIER YEAR AND FOLLOWING THE SAME REASONING, SET ASIDE THE ORDER OF AO AND HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION ON GOODWILL AND DIRECT THE AO TO ALLOW THE SAME. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 20 TH DAY OF DECEMBER, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 20 TH DECEMBER, 2017. YAMINI 8 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, PUNE. PR.CIT-1, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.