ACIT, Jaipur V. JAI DRINKS PVT. LTD., Jaipur

ITA 785/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5458 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Assessee Lawyers: G G MUNDRA
• Keywords: Depreciation
• Section: 32; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.785/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE ACIT, CIRCLE-5, JAIPUR CUKE VS. M/S JAI DRINKS PVT. LTD. JAWAHARLAL NEHRU MARG, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACJ 4639 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI G.G. MUNDRA (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.02.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 17 /02/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED C.I.T.(A)-II, JAIPUR DATED 29/09/2014 FOR A.Y. 2009- 10. THE SOLE GROUND OF THE APPEAL IS AGAINST DELETING THE ADDITION OF RS. 70,0 7,904/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION C LAIM ON INTANGIBLE ASSETS. 2. IN THIS CASE THE LD AR OF THE ASSESSEE HAS SUBMI TTED THAT THE ISSUE UNDER CONSIDERING IS COVERED BY THE ORDER OF THE HONBLE ITAT, JAIPUR BENCH, JAIPUR PASSED IN THE ASSESSEES OWN CASE IN ITA NOS. 405, 5 03, 504, 505, 506 & ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 2 507/JP/2010, ASSTT. YEARS 2001-02, 07-08, 02-03, 0 3-04, 04-05, 05-06 ORDER DATED 30/09/2011 WHEREIN THE HON BLE BENCH HAS BEE N PLEASED TO DELETE SIMILAR ADDITION. THEREFORE, HE PRAYED TO UPHOLD THE ORDER O F THE LD CIT(A). 3. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE ASSESSING OFFICER AND PRAYED TO REVERSE THE ORDER O F THE LD CIT(A). 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE IDENTICAL ISSU E INVOLVED IN THIS APPEAL, HAS BEEN DECIDED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NOS. 405, 503, 504, 505, 506 & 507/JP/2010, ASSTT. YEARS 2001 -02, 07-08, 02-03, 03-04, 04-05, 05-06 ORDER DATED 30/09/2011. THE OPERATIVE P ORTION OF THE COORDINATE BENCHS ORDER IS REPRODUCED AS UNDER:- 8. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HEM CAREFULLY. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSIN G THE MATERIAL ON RECORD, WE FIND THAT THE OBJECTION RAISED BY AO WHICH HAS BEEN REITERATED HERE BEFORE THE TRIBUNAL BY LD. CIT D/R HA S ALREADY BEEN MET WITH BY LD. CIT (A) WHILE DISPOSING THE APPEAL OF THE ASSESSEE. THE OBJECTION RAISED BY AO WERE EXPLAINED BY LD. COU NSEL OF THE ASSESSEE BEFORE LD. CIT (A) IN WRITING AND THEY WERE T ABULATED IN THE ORDER OF TRIBUNAL WHICH ARE ALSO REPRODUCED SOMEWH ERE ABOVE IN THIS ORDER. THE LD. CIT (A) HAS TAKEN INTO CONSID ERATION THE AGREEMENT ENTERED BETWEEN ASSESSEE AND PEPSI FOOD LT D. ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 3 THEREAFTER, THE LD. CIT (A) HAS TAKEN INTO CONSIDERAT ION THE QUESTION RAISED BY THE AO IN RESPECT TO THE ISSUE O F LETTER OF INTENT IF LICENSE AND FRANCHISE RIGHTS DEVOLVED UPON THE A SSESSEE THROUGH THE BUSINESS TRANSFER AGREEMENT AND THEREAFTER CONS IDERING THE ISSUE IN DETAIL, THE LD. CIT (A) FOUND THAT THE ASSE SSEE HAS PURCHASED LICENSE AND FRANCHISE RIGHTS FROM PEPSI F OOD LTD. WHICH ARE INTANGIBLE ASSETS ON WHICH DEPRECIATION IS ALLOWA BLE AS PER PROVISIONS OF LAW. THE LD. CIT (A) THEREAFTER BY TAKI NG INTO CONSIDERATION THE DECISION OF HINDUSTAN COCA COLA B EVERAGES PVT. LTD. (SUPRA) HELD THAT EVEN IF THE CONTENTION OF TH E AO IS ACCEPTED THAT THIS IS A GOODWILL, EVEN IN GOODWILL THE DEPRECI ATION IS ALLOWABLE AND THIS DECISION HAS BEEN AFFIRMED BY HONBLE DELH I HIGH COURT. THE FINDINGS OF LD. CIT (A) AT PAGES 10 TO 14 OF HIS ORDER ARE AS UNDER:- I HAVE CONSIDERED FACTS OF THE CASE AND ARGUMENTS TAKEN BY SH. RANKA AND SH. MUNDRA QUITE CAREFULLY. THE ASSESSING OFFICER HAS GIVEN THE REASONING TO DISALLOW THE DEPRECIATION CL AIM ON LICENSE AND FRANCHISE RIGHTS THAT NO SUCH RIGHTS WERE DEVOL VED UPON THE ASSESSMENT COMPANY THROUGH BUSINESS TRANSFER AGREEM ENT DATED 26.8.2000 BETWEEN APPELLANT AND M/S DHILLON KOOL DR INKS AND BEVERAGES LTD. BUT THESE WERE THROUGH THE LETTER OF INTENT EXECUTED ON THE SAME DATE I.E. 26.8.2000 GIVEN BY PEPSI FOOD LTD. TO THE APPELLANT COMPANY. THE ASSESSING OFFICER HAS RAISED THE QUESTION OF DESIRABILITY TO ISSUE LETTER OF INTENT IF LICENSE A ND FRANCHISE RIGHTS DEVOLVED UPON THE ASSESSEE THROUGH THE BUSINESS TRA NSFER AGREEMENT ACCORDING TO AO SINCE NO AGREEMENT OF LIC ENSE OR FRANCHISE RIGHTS HAVE DEVOLVED UPON THE ASSESSEE FR OM PEPSI FOOD LTD. THEREFORE, THE DEPRECIATION CLAIM ON LICENSE A ND FRANCHISE RIGHTS WAS HELD AS NOT ADMISSIBLE. THE AO HAD ALSO OBSERVED THAT AS PER LETTER OF INTENT IT WAS TO BE REPLACED WITH APPROPRIATE TRADE MARK LICENSING AGREEMENT AND THE LETTER OF INTENT S HALL TERMINATE IMMEDIATELY ON THE EXECUTION OF THE FRANCHISE AGREE MENT. ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 4 ACCORDING TO AO IT IS IMPLIED THAT THE SAID AMOUNT OF RS.28 CRORE IS NOT LICENSE AND FRANCHISE RIGHTS BUT IT FORMS PART OF GOODWILL DEVOLVED UPON THE ASSESSEE ON WHICH NO DEPRECIATION IS ALLOWABLE. I HAVE ALSO GONE THROUGH THE COPY OF BUSINESS TRANS FER AGREEMENT DATED 26.8.2000 BETWEEN DHILLON KOOL DRINKS AND BEV ERAGES LTD. WITH THE APPELLANT, LETTER OF INTENT ISSUED BY PEPS I FOOD LTD. TO THE APPELLANT ON 26.8.2000 AND AGREEMENT DATED 10.8.200 0 BETWEEN PEPSICO INDIA HOLDING LTD. WITH THE APPELLANT. PEPS ICO INDIA HOLDING LTD. IS A SUBSIDIARY COMPANY OF PEPSICO INC NEW YOR K WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND DISTRI BUTION OF SOFT DRINKS BEVERAGES AND SYRUP MIX SOLD UNDER THE TRADE MARK LEHAR OWNED BY PEPSI FOOD LTD. PEPSI FOOD LTD. AND PEPSIC O INC GRANTED FRANCHISE RIGHTS FOR BOTTLING AND DISTRIBUTION OF T HEIR VARIOUS PRODUCTS TO DHILLON KOOL DRINKS AND BEVERAGES LTD. FOR THE TERRITORIES OF PUNJAB, HIMACHAL PRADESH, CERTAIN PA RTS OF HARYANA, NEW DELHI I DELHI THE BUSINESS OF DHILLON KOOL DRIN KS WAS IN BAD SHAPE AND SINCE THEY HAD TO PAY AN AMOUNT OVER RS.2 0 CRORES TO PEPSICO INDIA HOLDING LTD. AND THEREFORE, THEY WERE INTERESTED IN SELLING THEIR DELHI BUSINESS ALONGWITH RIGHTS, INTE REST, PRIVILEGES, ASSETS AND LIABILITIES IN THE NATIONAL CAPITAL TERR ITORY OF DELHI FOR WHICH THE APPELLANT COMPANY OFFERED TO PURCHASE THE SAID BUSINESS AS A GOING CONCERN SUBJECT TO THE SELLER ARRANGING IN FAVOUR OF APPELLANT COMPANY BY PEPSI FOOD LTD. OF THE LICENSE AND FRANCHISE RIGHTS TO USE THE TRADEMARKS OF PEPSI BRAND OF THE SOFT DRINKS. IN VIEW OF THESE INTENTIONS AN AGREEMENT WAS ENTERED I N BETWEEN PEPSICO INDIA HOLDING LTD. AND THE ASSESSEE ON 10.8 .2000 IN WHICH PIH HAD AGREED TO NOMINATE THE APPELLANT TO ACQUIRE DELHI BUSINESS FROM DKD AND IT WOULD REQUIRE THE AUTHORIZATIONS FR OM PFL & PSI TO UNDERTAKE AND CONDUCT DELHI BUSINESS AND THE FORM A ND NATURE OF SUCH AUTHORIZATION WILL BE AS MAY BE MUTUALLY AGREE D BETWEEN THE APPELLANT AT ONE HAND AND THE PFL I PCI ON THE OTHE R HAND. WITH THIS BACKGROUND AS PER LETTER OF INTENT ISSUED BY P EPSI FOOD LTD. TO THE APPELLANT COMPANY DT. 26.5.2000 I.E. SAME DATE ON WHICH BUSINESS TRANSFER AGREEMENT HAS BEEN EXECUTED BETWE EN THE APPELLANT AND M/S DHILLON KOOL DRINKS AND BEVERAGES LTD. THE APPELLANT COMPANY HAS STEPPED INTO THE SHOES OF THE SELLER AND COMMENCED THE BUSINESS OF MANUFACTURING AND DISTRIB UTION OF SOFT DRINKS BRANDS OWNED BY PEPSI FOOD LTD. WITHOUT PROP ER RIGHTS OF LICENSE / FRANCHISE IT IS IMPOSSIBLE FOR THE APPELL ANT TO CARRY OUT ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 5 SUCH BUSINESS ACTIVITY. FURTHER, PEPSI FOODS PVT. L TD. VIDE THEIR LETTER DATED 29. 3.2004 ADDRESSED TO THE APPELLANT COMPANY HAS REFERRED THEIR EARLIER LETTER OF INTENT DATED 26.8. 2000 AS AMENDED FROM TIME TO TIME AND THE VALIDITY OF THE SAID LETT ER OF INTENT WAS FURTHER EXTENDED UPTO 30.9.2004 UNDER THE SAME TERM S AND CONDITIONS. THE LICENSES AND FRANCHISE RIGHTS EARLI ER WERE WITH DKD AND ATTACHED TO DELHI BUSINESS AND WHEN DELHI BUSIN ESS AS A GOING CONCERN STOOD TRANSFERRED TO THE APPELLANT BY DKD A ND IN TURN THE APPELLANT IS UNINTERRUPTEDLY CARRYING ON THE BUSINE SS OF BOTTLING AND SELLING IN THE SAME TERRITORY AND NECESSARY SUPPLIE S ARE BEING MADE TO THE APPELLANT BY PFL & PEPSICO TO MANUFACTURE TH E NAMED BEVERAGES AND SYRUP MIX SUPPORTED WITH LETTER OF IN TENT ISSUED BY PEPSI. FOOD LTD. THEN OBVIOUSLY THE LICENSES AND FR ANCHISE RIGHTS WERE ALSO DEVOLVED UPON THE APPELLANT. WITH SUCH FA CTUAL DEVELOPMENTS IN MY CONSIDERED VIEW THE ASSESSING OF FICER WAS NOT JUSTIFIED IN HOLDING THAT NO LICENSE AND FRANCHISE RIGHTS WERE DEVOLVED UPON THE APPELLANT COMPANY BECAUSE FOR THI S PURPOSE THERE IS NO AGREEMENT BETWEEN THE APPELLANT AND THE SELLER NAMELY DKD. IN MY CONSIDERED VIEW THE ASSESSING OFFICER WA S ALSO NOT JUSTIFIED IN HOLDING THAT SAID PAYMENT OF RS.28 CRO RE WAS FOR GOODWILL BECAUSE IN THE BUSINESS TRANSFER AGREEMENT BETWEEN THE APPELLANT AND DKD THERE IS NO SUCH MENTION AND IN A NY CASE THE GOODWILL CAN ONLY BE TRANSFERRED WHEN THERE ARE PRO FITS WITH THE TRANSFEROR UNDERTAKING AND UNDISPUTEDLY THE TRANSFE ROR UNDERTAKING. NAMELY DKD WAS IN BAD FINANCIAL SHAPE WHICH COULD N OT PAY MORE THAN RS.20 CRORE TO PEPSICO INDIA HOLDING LTD. AND BECAUSE OF WHICH THEY HAD TO TRANSFER THEIR BUSINESS TO THE AP PELLANT AND THEREFORE, THIS PAYMENT CANNOT BE CONSTRUED AS PAYM ENT FOR GOODWILL AS HELD BY ASSESSING OFFICER WHILE GIVING A FINDING THAT NO DEPRECIATION IS ALLOWABLE ON SUCH PAYMENT SINCE, IT IS A GOODWILL. FURTHER, ON THIS ISSUE THERE IS DIRECT JUDGMENT OF ITAT DELHI BENCH C IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. V/S DCIT CIRCLE 12(1) NEW DELHI DT.25.8.2009 IN WHICH HON BLE ITAT HAS HELD THAT TRUE BASIS OF DEPRECIATION ALLOWANCE IS C HARACTER OF AN ASSET AND NOT ITS DESCRIPTION AND EVEN IF AN ASSET IS DESCRIBED AS GOODWILL BUT IF IT FITS IN THE DESCRIPTION OF S.32( 1)(II) THE DEPRECIATION IS TO BE GRANTED THEREUPON. IN THAT CA SE THE APPELLANT WAS DOMESTIC COMPANY ENGAGED IN THE BUSINESS OF MAN UFACTURING AND DISTRIBUTION OF AERATED AND NON AERATED. BEVERA GES AND IT MADE ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 6 PAYMENT TOWARDS BUSINESS ACQUIRED ON SLUMP PRICE AN D A PART OF PRICE SO PAID WAS ALLOCATED TO INTANGIBLE ASSETS CO VERED UNDER THE HEAD GOODWILL AND WHEN DEPRECIATION HAS BEEN CLAIME D U/S 32 ON SAID AMOUNT OF GOODWILL THEN DEPRECIATION WAS CORRE CTLY ALLOWED BECAUSE EVEN IF AN AMOUNT IS TERMED AS GOODWILL BUT IF IT IS A BUSINESS OR COMMERCIAL RIGHT IN THE NATURE OF KNOW HOW, PATENT, COPY RIGHT, TRADE MARK, LICENSE, FRANCHISE THEN THE CLAIM OF DEPRECIATION IS INDEED ADMISSIBLE THEREUPON AND FUR THER THE GOODWILL IS NOT SPECIFICALLY EXCLUDED FROM THE INTA NGIBLE ASSETS ELIGIBLE FOR DEPRECIATION AND THEREFORE, EVEN IF AN ASSET IS DESCRIBED AS GOODWILL THEN ALSO DEPRECIATION IS TO BE GRANTED ON THE SAME U/S 32(1)(II) OF L.T. ACT. HONBLE ITAT MUMBAI BENCH F IN THE CASE OF KOTAK FOREX BROKERAGE LTD. V/S ACIT RANGE 3(2) MU MBAI 33 SOT 237 (2009) (MUM.) HAS ALSO HELD THAT WHETHER ANY RI GHT WHICH IS OBTAINED BY A COMPANY FOR CARRYING ON BUSINESS EFFE CTIVELY AND PROFITABLY FALLS WITHIN THE MEANING OF INTANGIBLE A SSETS THEN DEPRECIATION IS ALLOWABLE ON SAME, IT HAS FURTHER H ELD THAT GOODWILL IS A BUNDLE OF RIGHTS WHICH INCLUDE INTER-ALIA PATE NTS, TRADEMARKS, LICENSES, FRANCHISE ETC. AND IN VIEW OF ABOVE POSIT ION GOODWILL IS ALSO TO BE TREATED AS AN INTANGIBLE ASSETS OF SIMIL AR NATURE REFERRED TO IN CLAUSE II OF S.32(1) AND CONSEQUENTLY, DEPREC IATION WOULD BE ALLOWABLE ON SAME. IN THE BACKGROUND OF THESE 2 CAS ES ALSO IF EVEN THE CONTENTION OF ASSESSING OFFICER IS ACCEPTED THA T SAID PAYMENT OF RS.28 CRORE WAS MADE FOR GOODWILL THEN ALSO THE APP ELLANT IS ENTITLED FOR DEPRECIATION @ 25% OF THE SAME WITHIN THE MEANING OF S.32(1)(II) OF I.T ACT. WITH THIS DISCUSSION THE AO IS DIRECTED TO ALLOW THE AFORESAID DEPRECIATION CLAIM OF RS.7 CROR E. 8.1. AFTER GOING THROUGH THE FINDING OF LD. CIT (A) AND THE ARGUMENTS OF LD. D/R AND ALSO TAKING INTO CONSIDERATION THE ARGU MENTS OF LD. A/R, WE FIND THAT THE LD. CIT (A) EXAMINED THE ISSUE AT GREAT LENGTH AND FOUND THAT THE PEPSICO INDIA HOLDING LTD . WAS INTERESTED IN SELLING THEIR DELHI BUSINESS ALONG WIT H RIGHTS, INTEREST, PRIVILEGES, ASSETS AND LIABILITIES IN THE NATIONAL CAPITAL TERRITORY OF DELHI FOR WHICH THE ASSESSEE COMPANY OFFERED TO PURC HASE THE SAID BUSINESS AS A GOING CONCERN SUBJECT TO THE SELLER A RRANGING IN ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 7 FAVOUR OF THE ASSESSEE COMPANY BY PEPSI FOOD LTD. O F THE LICENSE AND FRANCHISE RIGHTS TO USE THE TRADEMARKS OF PEPSI BRAND OF THE SOFT DRINKS. IN VIEW OF THESE INTENTIONS AN AGREEME NT WAS ENTERED IN BETWEEN PEPSICO INDIA HOLDING LTD. (PIH) AND THE ASSESSEE ON 10.8.2000 IN WHICH PIH HAD AGREED TO NOMINATE THE AS SESSEE TO ACQUIRE DELHI BUSINESS FROM DHILLON KOOL DRINKS & B EVERAGES LTD. (DKD) AND THE FORMAL AUTHORIZATIONS FROM PFL AND P SI TO UNDERTAKE AND CONDUCT DELHI BUSINESS WAS ALSO TO BE OBTAINED FROM THE RESPECTIVE PARTIES. IN THIS BACKGROUND A LETTER OF INTENT WAS ISSUED BY PEPSI FOOD LTD. TO THE ASSESSEE COMPAN Y ON 26.5.2000 I.E. THE DATE ON WHICH BUSINESS TRANSFER A GREEMENT WAS EXECUTED BETWEEN THE ASSESSEE AND M/S. DKD, AND THER EAFTER THE ASSESSEE COMPANY HAS STEPPED INTO THE SHOES OF SELL ER AND COMMENCED THE BUSINESS OF MANUFACTURING AND DISTRIB UTION OF SOFT DRINKS BRANDS OWNED BY PFL. IT IS FURTHER NOTED THA T M/S. DKD WAS IN BAD SHAPE AND THEY HAD TO PAY AN AMOUNT OF RS. 2 0 CRORES TO M/S. PEPSICO INDIA HOLDING LTD. AND, THEREFORE, THE Y WERE INTERESTED IN SELLING THEIR DELHI BUSINESS ALONG WIT H RIGHTS, INTEREST, PRIVILEGES, ASSETS AND LIABILITIES IN THE NATIONAL CAPITAL TERRITORY OF DELHI FOR WHICH THE ASSESSEE COMPANY OFFERED TO PURC HASE THE SAID BUSINESS. SINCE THERE WAS A LIABILITY OF MORE THA N RS. 20 CRORES, IN OUR CONSIDERED VIEW, THERE CANNOT BE ANY GOOD WILL AND, THEREFORE, AOS PRESUMPTION THAT THEY HAD PURCHASED GOOD WILL AND NOT THE RIGHTS, INTEREST, PRIVILEGES, ASSETS AND LI ABILITIES ETC. FROM M/S. DKD. THE LD. CIT (A) HAS EXAMINED THIS ASPECT T HOROUGHLY AND THEN ONLY HELD THAT THE ASSESSEE HAD ACQUIRED L ICENSE, RIGHTS, INTEREST, PRIVILEGES ETC. WHICH ARE INTANGIBLE ASSET S IN VIEW OF ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 8 PROVISIONS OF SECTION 32(1)(II) OF THE ACT AND HELD THAT ASSESSEE IS ENTITLED FOR DEPRECIATION. THIS FINDING OF LD. CIT ( A) REMAINED UNCONTROVERTED. HOWEVER, THE LD. CIT D/R HAS ARGUED THAT IT WAS A GOOD WILL AND THE AO WAS RIGHT IN DENYING THE DEPRECI ATION BEING PURCHASE OF GOOD WILL BY THE ASSESSEE. THE LD. CIT D/ R HAS STATED THAT THE DECISION IN CASE OF HINDUSTAN COCA COLA (S UPRA) IS NOT APPLICABLE AS FACTS OF THE PRESENT CASE AS IN THIS CASE THE PROCEEDINGS UNDER SECTION 263 WERE INITIATED. WE HA VE GONE THROUGH THIS ORDER OF THE TRIBUNAL IN CASE OF HINDUS TAN COCA COLA WHICH HAS BEEN APPROVED BY HONBLE DELHI HIGH COURT ALSO AND FOUND THAT THOUGH THE APPEAL BEFORE TRIBUNAL WAS AGAI NST ORDER UNDER SECTION 263, BUT TRIBUNAL HAS DECIDED THE ISSU E ON MERITS ALSO BY WHICH IT WAS HELD THAT ON GOOD WILL, THE DEPRE CIATION IS ALLOWABLE AND THE AO WAS CORRECT IN ALLOWING THE DEPRE CIATION. THE LD. D/R HAS ALSO PLACED RELIANCE IN CASE OF BORK AR PACKAGING (P) LTD, 131 TTJ 99 (PANAJI), IN CASE OF BHARATBHAI J. VYAS, 279 ITR 41 (AT PORTION) AND IN CASE OF R.G. KESWANI, 308 I TR 271 (AT ). NO DOUBT, IN THESE CASES VARIOUS BENCHES OF THE TRIBUNAL HAS HELD THAT THE WORD GOOD WILL IS NOT PROVIDED IN THE PROVISIONS OF SECTION 32(1)(II) BY THE LEGISLATURES WHILE MENTIONI NG VARIOUS INTANGIBLE OTHER ASSETS. THEREFORE, DEPRECIATION IS NOT ALLOWABLE. 8.2. HOWEVER, WE FIND THAT IN CASE OF B. RAVEENDRAN P ILLAI, 237 CTR 80 (KER.), THE HONBLE KERALA HIGH COURT HAS HELD THAT EVEN ON GOOD WILL THE DEPRECIATION IS ALLOWABLE. THERE ARE DIFFERE NT VIEWS OF THE BENCHES OF THE TRIBUNAL BUT THERE IS NO DECISION OF ANY HIGH COURT THAT DEPRECIATION ON GOOD WILL CANNOT BE ALLOWED WHERE AS THERE IS A DECISION OF HONBLE KERALA HIGH COURT IN FAVOUR O F THE ASSESSEE ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 9 I.E. IN CASE OF B. RAVEENDRAN PILLAI (SUPRA) WHEREI N IT IS HELD THAT DEPRECIATION IS ALLOWABLE ON GOOD WILL. THE LD. A/R H AS ALSO INFORMED THAT THE DECISION OF THE TRIBUNAL IN CASE O F HINDUSTAN COCA COLA HAS BEEN AFFIRMED BY THE HONBLE DELHI HI GH COURT. THEREFORE, IN VIEW OF THE DECISION OF HONBLE HIGH CO URT, THE DEPRECIATION HAS TO BE ALLOWED ON GOOD WILL ALSO. HO WEVER, WE ARE NOT INCLINED TO GO INTO DETAIL WHETHER DEPRECIATION ON GOOD WILL IS ALLOWABLE OR NOT BUT THE FACT REMAINS THAT THE ASSES SEE HAS NOT PURCHASED ANY GOOD WILL BUT HAS PURCHASED LICENSE, I NTEREST, PRIVILEGE, FRANCHISE ETC. FROM M/S. DKD WHICH ARE UN DISPUTEDLY COVERED BY SECTION 32(1)(II) AND, THEREFORE, THE DE PRECIATION IS ALLOWABLE AND THE LD. CIT (A) HAS ALLOWED THE DEPRECIA TION ON THESE INTANGIBLE ASSETS, AND WE HAVE NO HESITATION I N CONFIRMING THE ORDER OF LD. CIT (A) ON THIS ASPECT. ACCORDINGLY WE CONFIRM THE ORDER OF LD. CIT (A). BY RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINAT E BENCH IN ASSESSEES OWN CASE FOR THE ABOVE RESPECTIVE ASSESSMENT YEARS, WE U PHOLD THE ORDER OF THE LD CIT(A) AND DISMISS THE REVENUES APPEAL. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 17 /02/2016. SD/- SD/ - ( R.P. TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 785/JP/14 ACIT, CIRCLE-5, JAIPUR VS. M/S JAI DRINKS (P) LTD. JAIPUR 10 JAIPUR DATED:- 17/ 02 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT, CIRCLE-5, JAIPUR 2. THE RESPONDENT- M/S JAI DRINKS (P) LTD., JAIPUR 3. THE CIT(A)-II, JAIPUR 4. THE CIT-II, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO785 /JP/14) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR