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

ITA 981/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5470 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G G MUNDRA C A DHK
• 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 VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 981/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 A.C.I.T., CIRCLE-5, JAIPUR. CUKE VS. M/S JAI DRINKS PVT. LTD., JAWAHAR LAL NEHRU MARG, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAACJ 4639 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI G.G. MUNDRA (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/01/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/02/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LEARNED C.I.T.(A)-II, JAIPUR DATED 17/09/2013 FOR A. Y. 2008-09. THE SOLE GROUND OF THE APPEAL IS AGAINST DELETING THE A DDITION OF RS. 93,43,872/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF DISALLOWANCE OF DEPRECIATION CLAIM ON INTANGIBLE ASSETS. 2 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. 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 HO NBLE ITAT, JAIPUR BENCH, JAIPUR PASSED IN THE ASSESSEES OWN CASE IN I TA 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 WHEREIN THE HONBLE BENCH HAS BEEN PLEASED TO DELETE SIMILAR ADDITION. THEREFO RE, HE PRAYED TO UPHOLD THE ORDER OF 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 ORD ER OF THE LD CIT(A). 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE I DENTICAL ISSUE INVOLVED IN THIS APPEAL, HAS BEEN DECIDED BY THE CO ORDINATE 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 PORTION 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 PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE OB JECTION 3 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. RAISED BY AO WHICH HAS BEEN REITERATED HERE BEFORE THE TRIBUNAL BY LD. CIT D/R HAS ALREADY BEEN MET WITH BY L D. CIT (A) WHILE DISPOSING THE APPEAL OF THE ASSESSEE. THE OBJECTION RAISED BY AO WERE EXPLAINED BY LD. COUNSEL OF THE ASSESSEE BEFORE LD. CIT (A) IN WRITING AND THEY WE RE TABULATED IN THE ORDER OF TRIBUNAL WHICH ARE ALSO REPRODUCED SOMEWHERE ABOVE IN THIS ORDER. THE LD. CI T (A) HAS TAKEN INTO CONSIDERATION THE AGREEMENT ENTE RED BETWEEN ASSESSEE AND PEPSI FOOD LTD. THEREAFTER, THE LD. CIT (A) HAS TAKEN INTO CONSIDERATION THE QUESTION RA ISED BY THE AO IN RESPECT TO THE ISSUE OF LETTER OF INTENT IF LICENSE AND FRANCHISE RIGHTS DEVOLVED UPON THE ASSESSEE THR OUGH THE BUSINESS TRANSFER AGREEMENT AND THEREAFTER CONS IDERING THE ISSUE IN DETAIL, THE LD. CIT (A) FOUND THAT THE ASSESSEE HAS PURCHASED LICENSE AND FRANCHISE RIGHTS FROM PEP SI FOOD LTD. WHICH ARE INTANGIBLE ASSETS ON WHICH DEPRECIATIO N IS ALLOWABLE AS PER PROVISIONS OF LAW. THE LD. CIT (A) THEREAFTER BY TAKING INTO CONSIDERATION THE DECISIO N OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. (SUPRA) HEL D THAT EVEN IF THE CONTENTION OF THE AO IS ACCEPTED THAT T HIS IS A GOODWILL, EVEN IN GOODWILL THE DEPRECIATION IS ALLOWAB LE AND THIS DECISION HAS BEEN AFFIRMED BY HONBLE DELHI HI GH 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 4 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. ASSESSING OFFICER HAS GIVEN THE REASONING TO DISALL OW THE DEPRECIATION CLAIM ON LICENSE AND FRANCHISE RIGHTS THAT NO SUCH RIGHTS WERE DEVOLVED UPON THE ASSESSMENT COMPA NY THROUGH BUSINESS TRANSFER AGREEMENT DATED 26.8.2000 BETWEEN APPELLANT AND M/S DHILLON KOOL DRINKS AND BEVERAGES LTD. BUT THESE WERE THROUGH THE LETTER OF INTENT EXECUTED ON THE SAME DATE I.E. 26.8.2000 GIVEN BY P EPSI FOOD LTD. TO THE APPELLANT COMPANY. THE ASSESSING O FFICER HAS RAISED THE QUESTION OF DESIRABILITY TO ISSUE LE TTER OF INTENT IF LICENSE AND FRANCHISE RIGHTS DEVOLVED UPO N THE ASSESSEE THROUGH THE BUSINESS TRANSFER AGREEMENT ACCORDING TO AO SINCE NO AGREEMENT OF LICENSE OR FRANCHISE RIGHTS HAVE DEVOLVED UPON THE ASSESSEE FR OM PEPSI FOOD LTD. THEREFORE, THE DEPRECIATION CLAIM O N LICENSE AND FRANCHISE RIGHTS WAS HELD AS NOT ADMISS IBLE. THE AO HAD ALSO OBSERVED THAT AS PER LETTER OF INTE NT IT WAS TO BE REPLACED WITH APPROPRIATE TRADE MARK LICE NSING AGREEMENT AND THE LETTER OF INTENT SHALL TERMINATE IMMEDIATELY ON THE EXECUTION OF THE FRANCHISE AGREE MENT. 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 WHIC H NO DEPRECIATION IS ALLOWABLE. I HAVE ALSO GONE THROUGH THE COPY OF BUSINESS TRANSFER AGREEMENT DATED 26.8.2000 BETWEEN DHILLON KOOL DRINKS AND BEVERAGES LTD. WITH THE APPELLANT, LETTER OF INTENT ISSUED BY PEPSI FOOD LT D. TO THE APPELLANT ON 26.8.2000 AND AGREEMENT DATED 10.8.200 0 BETWEEN PEPSICO INDIA HOLDING LTD. WITH THE APPELLA NT. PEPSICO INDIA HOLDING LTD. IS A SUBSIDIARY COMPANY OF PEPSICO INC NEW YORK WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND DISTRIBUTION OF SOFT DRINKS BEVER AGES AND SYRUP MIX SOLD UNDER THE TRADE MARK LEHAR OWNED BY PEPSI FOOD LTD. PEPSI FOOD LTD. AND PEPSICO INC GRANTED FRANCHISE RIGHTS FOR BOTTLING AND DISTRIBUT ION OF THEIR VARIOUS PRODUCTS TO DHILLON KOOL DRINKS AND BEVERAGES LTD. FOR THE TERRITORIES OF PUNJAB, HIMAC HAL 5 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. PRADESH, CERTAIN PARTS OF HARYANA, NEW DELHI I DELH I THE BUSINESS OF DHILLON KOOL DRINKS WAS IN BAD SHAPE AN D SINCE THEY HAD TO PAY AN AMOUNT OVER RS.20 CRORES T O PEPSICO INDIA HOLDING LTD. AND THEREFORE, THEY WERE INTERESTED IN SELLING THEIR DELHI BUSINESS ALONGWIT H RIGHTS, INTEREST, PRIVILEGES, ASSETS AND LIABILITIES IN THE NATIONAL CAPITAL TERRITORY OF DELHI FOR WHICH THE APPELLANT COMPANY OFFERED TO PURCHASE THE SAID BUSINESS AS A GOING CO NCERN SUBJECT TO THE SELLER ARRANGING IN FAVOUR OF APPELL ANT COMPANY BY PEPSI FOOD LTD. OF THE LICENSE AND FRANC HISE RIGHTS TO USE THE TRADEMARKS OF PEPSI BRAND OF THE SOFT DRINKS. IN VIEW OF THESE INTENTIONS AN AGREEMENT WA S ENTERED IN BETWEEN PEPSICO INDIA HOLDING LTD. AND T HE ASSESSEE ON 10.8.2000 IN WHICH PIH HAD AGREED TO NOMINATE THE APPELLANT TO ACQUIRE DELHI BUSINESS FR OM DKD AND IT WOULD REQUIRE THE AUTHORIZATIONS FROM PF L & PSI TO UNDERTAKE AND CONDUCT DELHI BUSINESS AND THE FORM AND NATURE OF SUCH AUTHORIZATION WILL BE AS MAY BE MUTUALLY AGREED BETWEEN THE APPELLANT AT ONE HAND A ND THE PFL I PCI ON THE OTHER HAND. WITH THIS BACKGROU ND AS PER LETTER OF INTENT ISSUED BY PEPSI FOOD LTD. TO T HE APPELLANT COMPANY DT. 26.5.2000 I.E. SAME DATE ON W HICH BUSINESS TRANSFER AGREEMENT HAS BEEN EXECUTED BETWE EN THE APPELLANT AND M/S DHILLON KOOL DRINKS AND BEVER AGES LTD. THE APPELLANT COMPANY HAS STEPPED INTO THE SHO ES OF THE SELLER AND COMMENCED THE BUSINESS OF MANUFACTUR ING AND DISTRIBUTION OF SOFT DRINKS BRANDS OWNED BY PEP SI FOOD LTD. WITHOUT PROPER RIGHTS OF LICENSE / FRANCH ISE IT IS IMPOSSIBLE FOR THE APPELLANT TO CARRY OUT SUCH BUSI NESS ACTIVITY. FURTHER, PEPSI FOODS PVT. LTD. 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 S AID LETTER OF INTENT WAS FURTHER EXTENDED UPTO 30.9.200 4 UNDER THE SAME TERMS AND CONDITIONS. THE LICENSES A ND FRANCHISE RIGHTS EARLIER WERE WITH DKD AND ATTACHED TO 6 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. DELHI BUSINESS AND WHEN DELHI BUSINESS AS A GOING CONCERN STOOD TRANSFERRED TO THE APPELLANT BY DKD A ND IN TURN THE APPELLANT IS UNINTERRUPTEDLY CARRYING ON T HE BUSINESS OF BOTTLING AND SELLING IN THE SAME TERRIT ORY AND NECESSARY SUPPLIES ARE BEING MADE TO THE APPELLANT BY PFL & PEPSICO TO MANUFACTURE THE NAMED BEVERAGES AN D SYRUP MIX SUPPORTED WITH LETTER OF INTENT ISSUED BY PEPSI. FOOD LTD. THEN OBVIOUSLY THE LICENSES AND FRANCHISE 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 FR ANCHISE RIGHTS WERE DEVOLVED UPON THE APPELLANT COMPANY BECAUSE FOR THIS PURPOSE THERE IS NO AGREEMENT BETW EEN THE APPELLANT AND THE SELLER NAMELY DKD. IN MY CONSIDERED VIEW THE ASSESSING OFFICER WAS ALSO NOT JUSTIFIED IN HOLDING THAT SAID PAYMENT OF RS.28 CRO RE WAS FOR GOODWILL BECAUSE IN THE BUSINESS TRANSFER AGREE MENT BETWEEN THE APPELLANT AND DKD THERE IS NO SUCH MENT ION AND IN ANY CASE THE GOODWILL CAN ONLY BE TRANSFERRE D WHEN THERE ARE PROFITS WITH THE TRANSFEROR UNDERTAKING A ND UNDISPUTEDLY THE TRANSFEROR UNDERTAKING. NAMELY DKD WAS IN BAD FINANCIAL SHAPE WHICH COULD NOT PAY MORE THA N RS.20 CRORE TO PEPSICO INDIA HOLDING LTD. AND BECAU SE OF WHICH THEY HAD TO TRANSFER THEIR BUSINESS TO THE AP PELLANT AND THEREFORE, THIS PAYMENT CANNOT BE CONSTRUED AS PAYMENT FOR GOODWILL AS HELD BY ASSESSING OFFICER W HILE GIVING A FINDING THAT NO DEPRECIATION IS ALLOWABLE ON SUCH PAYMENT SINCE, IT IS A GOODWILL. FURTHER, ON THIS I SSUE THERE IS DIRECT JUDGMENT OF ITAT DELHI BENCH C IN THE CAS E OF HINDUSTAN COCA COLA BEVERAGES PVT.LTD. V/S DCIT CIR CLE 12(1) NEW DELHI DT.25.8.2009 IN WHICH HONBLE 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 DESCRIP TION OF S.32(1)(II) THE DEPRECIATION IS TO BE GRANTED THERE UPON. IN THAT CASE THE APPELLANT WAS DOMESTIC COMPANY ENGAGE D IN 7 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. THE BUSINESS OF MANUFACTURING AND DISTRIBUTION OF A ERATED AND NON AERATED. BEVERAGES AND IT MADE PAYMENT TOWARDS BUSINESS ACQUIRED ON SLUMP PRICE AND A PART OF PRICE SO PAID WAS ALLOCATED TO INTANGIBLE ASSETS CO VERED UNDER THE HEAD GOODWILL AND WHEN DEPRECIATION HAS B EEN CLAIMED U/S 32 ON SAID AMOUNT OF GOODWILL THEN DEPRECIATION WAS CORRECTLY ALLOWED BECAUSE EVEN IF AN AMOUNT IS TERMED AS GOODWILL BUT IF IT IS A BUSINES S OR COMMERCIAL RIGHT IN THE NATURE OF KNOW HOW, PATENT, COPY RIGHT, TRADE MARK, LICENSE, FRANCHISE THEN THE CLAI M OF DEPRECIATION IS INDEED ADMISSIBLE THEREUPON AND FUR THER THE GOODWILL IS NOT SPECIFICALLY EXCLUDED FROM THE INTANGIBLE ASSETS ELIGIBLE FOR DEPRECIATION AND THE REFORE, 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 O F KOTAK FOREX BROKERAGE LTD. V/S ACIT RANGE 3(2) MUMBAI 33 SOT 237 (2009) (MUM.) HAS ALSO HELD THAT WHETHER ANY RIGHT WHICH IS OBTAINED BY A COMPANY FO R CARRYING ON BUSINESS EFFECTIVELY AND PROFITABLY FAL LS WITHIN THE MEANING OF INTANGIBLE ASSETS THEN DEPRECIATION IS ALLOWABLE ON SAME, IT HAS FURTHER HELD THAT GOODWIL L IS A BUNDLE OF RIGHTS WHICH INCLUDE INTER-ALIA PATENTS, TRADEMARKS, LICENSES, FRANCHISE ETC. AND IN VIEW OF ABOVE POSITION GOODWILL IS ALSO TO BE TREATED AS AN INTAN GIBLE ASSETS OF SIMILAR NATURE REFERRED TO IN CLAUSE II O F S.32(1) AND CONSEQUENTLY, DEPRECIATION WOULD BE ALLOWABLE O N SAME. IN THE BACKGROUND OF THESE 2 CASES ALSO IF EV EN THE CONTENTION OF ASSESSING OFFICER IS ACCEPTED THAT SA ID PAYMENT OF RS.28 CRORE WAS MADE FOR GOODWILL THEN A LSO THE APPELLANT 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 AFO RESAID DEPRECIATION CLAIM OF RS.7 CRORE. 8 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. 8.1. AFTER GOING THROUGH THE FINDING OF LD. CIT (A) AND THE ARGUMENTS OF LD. D/R AND ALSO TAKING INTO CONSIDERA TION THE ARGUMENTS OF LD. A/R, WE FIND THAT THE LD. CIT (A ) EXAMINED THE ISSUE AT GREAT LENGTH AND FOUND THAT T HE PEPSICO INDIA HOLDING LTD. WAS INTERESTED IN SELLING THEIR DELHI BUSINESS ALONG WITH RIGHTS, INTEREST, PRIVILEG ES, ASSETS AND LIABILITIES IN THE NATIONAL CAPITAL TERRI TORY OF DELHI FOR LWHICH THE ASSESSEE COMPANY OFFERED TO PURCHASE THE SAID BUSINESS AS A GOING CONCERN SUBJE CT TO THE SELLER ARRANGING IN FAVOUR OF THE ASSESSEE COMP ANY 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 IN BETWE EN PEPSICO INDIA HOLDING LTD. (PIH) AND THE ASSESSEE O N 10.8.2000 IN WHICH PIH HAD AGREED TO NOMINATE THE ASSESSEE TO ACQUIRE DELHI BUSINESS FROM DHILLON KOO L DRINKS & BEVERAGES LTD. (DKD) AND THE FORMAL AUTHORIZATIONS FROM PFL AND PSI TO UNDERTAKE AND CO NDUCT 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 TRANSF ER AGREEMENT WAS EXECUTED BETWEEN THE ASSESSEE AND M/S. DKD, AND THEREAFTER THE ASSESSEE COMPANY HAS STEPPE D INTO THE SHOES OF SELLER AND COMMENCED THE BUSINESS OF MANUFACTURING AND DISTRIBUTION OF SOFT DRINKS BRAND S 9 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. OWNED BY PFL. IT IS FURTHER NOTED THAT M/S. DKD WAS IN BAD SHAPE AND THEY HAD TO PAY AN AMOUNT OF RS. 20 CRORES TO M/S. PEPSICO INDIA HOLDING LTD. AND, THER EFORE, THEY WERE INTERESTED IN SELLING THEIR DELHI BUSINESS ALONG WITH RIGHTS, INTEREST, PRIVILEGES, ASSETS AND LIABIL ITIES IN THE NATIONAL CAPITAL TERRITORY OF DELHI FOR WHICH THE ASS ESSEE COMPANY OFFERED TO PURCHASE THE SAID BUSINESS. S INCE THERE WAS A LIABILITY OF MORE THAN 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 LIABILITIES ETC. FROM M/S. DKD. THE LD. CIT (A) HAS EXAMINED THIS ASPECT THOROUGHLY AND THEN ONLY HELD THAT THE ASSESSEE HAD ACQUIRED LICENSE, RIGHTS, INTEREST , PRIVILEGES ETC. WHICH ARE INTANGIBLE ASSETS IN VIEW OF PROVISIONS OF SECTION 32(1)(II) OF THE ACT AND HELD THAT ASSESSEE IS ENTITLED FOR DEPRECIATION. THIS FINDIN G OF LD. CIT (A) REMAINED UNCONTROVERTED. HOWEVER, THE LD. CI T D/R HAS ARGUED THAT IT WAS A GOOD WILL AND THE AO WAS RIGHT IN DENYING THE DEPRECIATION BEING PURCHASE OF GOOD WILL BY THE ASSESSEE. THE LD. CIT D/R HAS STATED THAT THE DECISION IN CASE OF HINDUSTAN COCA COLA (SUPRA) IS NOT APPLICABLE AS FACTS OF THE PRESENT CASE AS IN THIS CASE THE PROCEEDINGS UNDER SECTION 263 WERE INITIATED. WE H AVE GONE THROUGH THIS ORDER OF THE TRIBUNAL IN CASE OF HINDUSTAN COCA COLA WHICH HAS BEEN APPROVED BY HONB LE 10 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. DELHI HIGH COURT ALSO AND FOUND THAT THOUGH THE APP EAL BEFORE TRIBUNAL WAS AGAINST ORDER UNDER SECTION 263, BUT TRIBUNAL HAS DECIDED THE ISSUE ON MERITS ALSO BY WHIC H IT WAS HELD THAT ON GOOD WILL, THE DEPRECIATION IS ALLOWA BLE AND THE AO WAS CORRECT IN ALLOWING THE DEPRECIATION. THE LD. D/R HAS ALSO PLACED RELIANCE IN CASE OF BORKAR PACKAGING (P) LTD, 131 TTJ 99 (PANAJI), IN CASE OF BHARATBHAI J. VYAS, 279 ITR 41 (AT PORTION) AND IN C ASE OF R.G. KESWANI, 308 ITR 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, DEPRECIA TION 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 HEL D THAT EVEN ON GOOD WILL THE DEPRECIATION IS ALLOWABLE. THER E ARE DIFFERENT VIEWS OF THE BENCHES OF THE TRIBUNAL BUT TH ERE IS NO DECISION OF ANY HIGH COURT THAT DEPRECIATION ON GOOD WILL CANNOT BE ALLOWED WHEREAS THERE IS A DECISION OF HONBLE KERALA HIGH COURT IN FAVOUR OF THE ASSESSEE I.E. IN CASE OF B. RAVEENDRAN PILLAI (SUPRA) WHEREIN IT IS H ELD THAT DEPRECIATION IS ALLOWABLE ON GOOD WILL. THE LD. A/R HAS ALSO INFORMED THAT THE DECISION OF THE TRIBUNAL IN CASE OF HINDUSTAN COCA COLA HAS BEEN AFFIRMED BY THE HONBL E 11 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. DELHI HIGH COURT. THEREFORE, IN VIEW OF THE DECISION OF HONBLE HIGH COURT, THE DEPRECIATION HAS TO BE ALLO WED ON GOOD WILL ALSO. HOWEVER, WE ARE NOT INCLINED TO GO IN TO DETAIL WHETHER DEPRECIATION ON GOOD WILL IS ALLOWABLE OR NOT BUT THE FACT REMAINS THAT THE ASSESSEE HAS NOT PURCHASED ANY GOOD WILL BUT HAS PURCHASED LICENSE, INTEREST, PRIVILEGE, FRANCHISE ETC. FROM M/S. DKD WH ICH ARE UNDISPUTEDLY COVERED BY SECTION 32(1)(II) AND, THER EFORE, THE DEPRECIATION IS ALLOWABLE AND THE LD. CIT (A) HAS ALLOWED THE DEPRECIATION ON THESE INTANGIBLE ASSETS, AND WE HAVE NO HESITATION IN 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 UPHOLD THE ORDER OF THE LD CIT(A) AND DISMISS THE REVENUES APP EAL. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 12/02/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 TH FEBRUARY, 2016 12 ITA NO. 981/JP/2013 ACIT VS M/S JAI DRINKS PVT. LTD. RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- A.C.I.T., CIRCLE-5, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S JAI DRINKS PVT. LTD., JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.981/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR