Sujag Fine Chemicals Pvt.Ltd., Baroda V. The ACIT.,Circle-4, Baroda

ITA 987/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94513 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Depreciation
• Section: 10B; 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.987/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) SUJAG FINE CHEMICALS P.LTD. 42/6 & 7, GIDC INDUSTRIAL ESTATE AT & POST NANDESARI DIST.BARODA / VS. THE ASST.CIT CIRCLE-4 BARODA ' ./ ./ PAN/GIR NO. : AADCS 2989 J ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( / APPELLANT BY : SHRI SUNIL H. TALATI &''% ) ( / RESPONDENT BY : SHRI DINESH SINGH, SR.DR * ) / DATE OF HEARING 08/10/2015 +,-. ) / DATE OF PRONOUNCEMENT 15/10/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-III, BARODA [CIT(A) IN SHORT] DATED 13/02/2012 PERTAINING TO ASSESSMENT Y EAR (AY) 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- YOUR APPELLANT BEING DISSATISFIED WITH THE ORDER PA SSED BY THE HON'BLE CIT(A)-III, BARODA DATED 13/02/12 PRESENTS THIS APP EAL AGAINST THE SAID ORDER ON THE FOLLOWING AMONGST OTHER GROUNDS: ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 2 - 1. THE ORDER PASSED BY THE LEARNED AO IS BAD IN LAW AND BE QUASHED. IT BE HELD SO NOW. 2. THE HON'BLE CIT(A)-III, BARODA HAS ERRED IN CONF IRMING THE ACTION OF AO FOR NOT GRANTING THE EXEMPTION AMOUNTING TO RS.60,0 1,695/- CLAIMED U/S 10B OF THE ACT DESPITE THE FACT THAT THE APPELLANT FILE D FORM 56G CERTIFIED BY CHARTERED ACCOUNTANT AS PRESCRIBED AS PER PROVISION S OF SECTION 10B OF THE ACT AND FURTHER COMPLIED WITH ALL THE CONDITIONS AS PRESCRIBED. IT IS THEREFORE SUBMITTED THAT THE HON'BLE CIT(A)-III HAS ERRED IN NOT GRANTING THE EXEMPTION AS CLAIMED. IT BE HELD SO NOW AND THE AO BE DIRECTE D TO ALLOW THE CLAIM. 3. THE HON'BLE CIT(A)-III, BARODA HAS ERRED IN CONF IRMING THE DISALLOWANCE OF DEPRECIATION ON GOODWILL OF RS.61,768/-. YOUR AP PELLANT SUBMITS THAT THE DISALLOWANCE IS MADE WITHOUT CONSIDERING THE FULL F ACTS OF THE CASE AND LAW. THE AO BE DIRECTED TO ALLOW THE SAME AS CLAIMED. YOUR APPELLANT CRAVES FOR LEAVE TO ALTER/AMEND/WITH DRAW/MODIFY ANY OF THE ABOVE GROUNDS BEFORE DISPOSAL OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 21/12/2010; THEREBY THE ASSESSING OFFICER (AO IN SHORT) DISALLOWED THE CLAIM OF DEDUCTION U/S.10B OF THE AC T ON THE BASIS THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.10B FOR THE FIR ST TIME IN AY 2008-09. THE ASSESSEE HAS NOT FORMED BY SPLITTING UP, OR THE CONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE. THE ASSESSEE HAS NO T FURNISHED COMPLETE DETAILS AND RELEVANT DOCUMENTARY EVIDENCES SATISFYI NG THE CONDITIONS FOR THE PURPOSE OF CLAIM OF EXEMPTION AS PROVIDED IN SE CTION 10B OF THE ACT. THE ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDE R, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 3 - AFFIRMED THE FINDING OF THE AO AND HELD THAT THE AS SESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT. AGGRIEVED BY THI S ORDER, THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. FIRST GROUND OF THIS APPEAL IS GENERAL IN NATURE NEEDS NO INDEPENDENT ADJUDICATION. 4. SECOND GROUND OF APPEAL IS AGAINST DISALLOWING T HE CLAIM OF THE ASSESSEE FOR EXEMPTION OF RS.60,01,6795/- CLAIMED U /S.10B OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN NOT GRANTING THE EXEMPTION. HE S UBMITTED THAT THE EXEMPTION U/S.10B OF THE ACT IS AVAILABLE FOR 10 YE ARS FROM THE INITIAL YEARS IN WHICH THE UNDERTAKING BEINGS MANUFACTURING . IT IS SUBMITTED THAT THE MANUFACTURING WAS STARTED IN FEBRUARY-1999. T HE AUTHORITIES BELOW WERE NOT CORRECT IN HOLDING THAT THE MANUFACTURING WAS STARTED IN AY 1998-99. HE SUBMITTED THAT THE PERIOD OF 10 YEAR S IS TO BE RECKONED FROM AY 1999-2000, BUT NOT FROM AY 1998-99. THE LD .COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REGISTRATION AS 100% EO U WAS RECEIVED ON 05/04/2007 (AY 2008-09) AND THE EXEMPTION WAS CLAIM ED FIRST TIME IN THE AY 2008-09. THE LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ASSESSEE FULFILLED ALL THE CONDITIONS AS ENVISAGED U/S.10B(2) OF THE ACT, SINCE THE UNDERTAKING MANUFACTURES CHOLINE DICHLORI DE AND PYRIDYNYLOXY OCTYL ACETATE FOR EXPORT SINCE FEBRUARY-1999. THE UNDERTAKING WAS NOT ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 4 - FORMED BY THE SPLITTING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE. THE UNDERTAKING WAS NOT FORMED BY THE T RANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. 4.1. ON THE CONTRARY, LD.SR.DR OPPOSED THE SUBMISSI ONS OF THE LD.COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT THE SUBMISSIONS OF THE LD.COUNSEL FOR THE ASSESSEE ARE NOT CORRECT. HE DREW OUR ATTENTION TOWARDS THE ORDER OF THE LD.CIT(A), WHEREIN HE HAS RECORDED THAT AS PER BALANCE-SHEET OF THE FIRM, NAMELY, SUJAG FINE CHEMI CALS AS ON 01/04/1998 SHOWS THAT THE TOTAL INVESTMENT IN FIXED ASSETS INCLUDING PLANT AND MACHINERY WAS RS.1,25,15,844/-, THE TOTAL INVES TMENT IN FIXED ASSETS AS ON 18.02.1999 IS RS.1,47,03,122/-. THEREFORE, HE SUBMITTED THAT THE ENTIRE SUBMISSIONS OF THE ASSESSEE IS MISPLACED. THE UNDERTAKING HAD, IN FACT, COMMENCED THE COMMERCIAL PRODUCTION EVEN P RIOR TO ITS CONVERSION INTO PRIVATE LIMITED COMPANY. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE TO BE EXAMINED IS WHETHER THE ASSESS EE IS ENTITLED FOR EXEMPTION U/S.10B OF THE ACT FOR THE YEAR UNDER APP EAL OR NOT. FOR THE SAKE OF CLARITY, SECTION 10B OF THE ACT IS REPRODUC ED HEREUNDER:- SECTION-10B :- SPECIAL PROVISIONS IN RESPECT OF NE WLY ESTABLISHED HUNDRED PER CENT EXPORT-ORIENTED UNDERTAKINGS. ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 5 - (1) SUBJECT TO THE PROVISIONS OF THIS SECTION, A DEDU CTION OF SUCH PROFITS AND GAINS AS ARE DERIVED BY A HUNDRED PER CENT EXPORT-ORIENTED UNDERTAKING FROM THE EXPORT FOR ARTICLES OR THINGS OR COMPUTER SOFTWARE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE, AS THE CASE MAY BE, SHALL BE AL LOWED FROM THE TOTAL INCOME OF THE ASSESSEE: [PROVIDED THAT WHERE IN COMPUTING THE TOTAL INCOME OF THE UNDERTAKING FOR ANY ASSESSMENT YEAR, ITS PROFITS AND GAINS HAD NOT BEEN INCLUDED BY APPLICATION OF THE PROVISIONS OF THIS SECTION AS IT STOOD IMMEDIATELY BEFOR E ITS SUBSTITUTION BY THE FINANCE ACT, 2000, THE UNDERTAKING SHALL BE ENTITLE D TO THE DEDUCTION REFERRED TO IN THIS SUB-SECTION ONLY FOR THE UNEXPIRED PERIOD OF AFORESAID TEN CONSECUTIVE ASSESSMENT YEARS : [PROVIDED [FURTHER] THAT FOR THE ASSESSMENT YEAR BEG INNING ON THE 1ST DAY OF APRIL, 2003, THE DEDUCTION UNDER THIS SUB-SECTION SH ALL BE NINETY PER CENT OF THE PROFITS AND GAINS DERIVED BY AN UNDERTAKING FROM THE EXPORT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE;] PROVIDED ALSO THAT NO DEDUCTION UNDER THIS SECTION S HALL BE ALLOWED TO ANY UNDERTAKING FOR THE ASSESSMENT YEAR BEGINNING ON THE [1ST DAY OF APRIL, [2012]] AND SUBSEQUENT YEARS : [PROVIDED ALSO THAT NO DEDUCTION UNDER THIS SECTION SH ALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETURN OF HIS INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139.] (2) THIS SECTION APPLIES TO ANY UNDERTAKING WHICH FU LFILS ALL THE FOLLOWING CONDITIONS, NAMELY : (I) IT MANUFACTURES OR PRODUCES ANY ARTICLES OR THING S OR COMPUTER SOFTWARE; (II) IT IS NOT FORMED BY THE SPLITTING UP, OR THE REC ONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE : PROVIDED THAT THIS CONDITION SHALL NOT APPLY IN RESPE CT OF ANY UNDERTAKING WHICH IS FORMED AS A RESULT OF THE RE-ESTABLISHMENT, RECONSTRUC TION OR REVIVAL BY THE ASSESSEE OF THE BUSINESS OF ANY SUCH UNDERTAKING AS IS REFERRED TO IN SECTION 33B, IN THE CIRCUMSTANCES AND WITHIN THE PERIOD SPECIFIE D IN THAT SECTION; (III) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUSIN ESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 6 - EXPLANATION : THE PROVISIONS OF EXPLANATION 1 AND EXPLANATION 2 OF S UB-SECTION (2) OF SECTION 80-I SHALL APPLY FOR THE PURPOSES OF C LAUSE (III) OF THIS SUB-SECTION AS THEY APPLY FOR THE PURPOSES OF CLAUSE (II) OF THAT SUB-SECTION. 5.1. AS PER THIS PROVISION, THE EXEMPTION WOULD BE AVAILABLE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BEGINNIN G WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE, AS THE CASE MAY BE. AS PER SECTION 10B(2)(III), TH E EXEMPTION WOULD NOT BE AVAILABLE IF THERE IS A TRANSFER TO A NEW BUSINE SS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. AS PER THE FINDI NG OF THE LD.CIT(A) THAT THE MACHINERY WAS USED PREVIOUSLY AND THE UNDE RTAKING HAD COMMENCED THE COMMERCIAL PRODUCTION PRIOR TO FEBRUA RY-1999. THIS FINDING OF THE LD.CIT(A) IS NOT CONTROVERTED BY THE ASSESSEE BY PLACING ANY CONTRARY MATERIAL ON RECORD. IN OUR CONSIDERED VIEW, THE ASSESSEE WOULD BE ENTITLED TO CLAIM FOR DEDUCTION U/S.10B OF THE ACT, FOR A PERIOD OF 10 CONSECUTIVE YEARS FROM THE DATE OF COMMENCEME NT OF ITS MANUFACTURE AS ENVISAGED IN THE SECTION. IN THE CASE IN HAND, THE ASSESSEE HAS NOT DEMONSTRATED THE ACTUAL DATE OF CO MMENCEMENT OF THE COMMERCIAL PRODUCTION. HOWEVER, THE AO AND THE LD .CIT(A) HAVE GIVEN FINDING THAT THE COMMERCIAL PRODUCTION WAS COMMENCE D EVEN PRIOR TO THE PERIOD CLAIMED BY THE ASSESSEE. UNDER THESE FACTS , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AS THE FIRST REQUIREMENT IS THE COMMENCEMENT OF MANUFACTURING OR PRODUCTION OF UNDERTAKING. WE ARE SUPPORTED OF THE JUDGEMENT OF HONBLE HIGH C OURT OF KARNATAKA ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 7 - IN THE CASE OF SAMI LABS LTD. VS. ACIT REPORTED AT (2012) 20 TAXMANN.COM 785 (KAR.). THUS, GROUND NO.2 OF ASS ESSEES APPEAL IS REJECTED. 6. THIRD GROUND OF THIS APPEAL IS AGAINST CONFIRMAT ION OF DISALLOWANCE OF DEPRECIATION ON GOODWILL OF RS.61,768/-. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARE LY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF THE TRIBUNAL (ITAT C BENCH AHMEDABAD) IN ASSESSEES OWN CASE IN ITA NO.2497/AHD/2011 FOR AY 2006-07, ORDER DATED 12/06/2015 AND THE COPY OF THE ORDER PLACED A T PAGE NOS.47 TO 49 OF THE PAPER-BOOK. 7. THE LD.SR.DR FAIRLY CONCEDED THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF TRIBUNAL PASSED IN ITA NO.2497/AHD/2011 FOR AY 2006-09. 8. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.2497/AHD/2011 FOR AY 200 6-07 VIDE ITS ORDER DATED 12/06/2015 THE ISSUE HAS DECIDED BY OBSERVING AS UNDER:- 6. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMST ANCES, WE FIND THAT ISSUE IN DISPUTE IS SQUARELY COVERED BY THE ORDER O F ITAT PASSED IN ASSESSMENT YEAR 2003-04. THE DISCUSSION MADE BY THE TRIBUNAL IN ASSESSMENT YEAR 20034)4 ON THIS ISSUE READS AS UNDER: - '6. WE HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE REVENUE, LEARNED DR, MR. O.K. SINGH HAS ARGUED THAT SECTION 32 ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 8 - PRESCRIBES THAT AN ASSET IS REQUIRED TO BE ACQUIRED ON OR AFTER 1 ST DAY OF APRIL 1998 IN THE NATURE OF COPY RIGHT, LICENCES, KNOW HOW ETC. HE HAS RAISED TWO ARGUMENTS. THE FIRST ARGUMENT WAS THAT 'GOODWILL' IS NOT IN THE NATURE OF THE ASSETS AS DEFINED U/S. 32(1)(II) OF THE IT ACT. HIS SECOND OBJECTION WAS T HAT THE ASSET IN QUESTION, I.E., GOODWILL WAS NOT IN EXISTENCES WHEN THE ASSESSEE COMPANY HAD TAKEN OVER THE ERSTWHILE FIRM. HE HAS A LSO PLACED RELIANCE ON VYOMIT SHARES, STOCKS & INVESTMENTS P. LTD. VS. DCI7, 106, ITD 408 (MUM). 7. ON THE OTHER HAND, FROM THE SIDE OF THE RESPONDE NT ASSESSEE, LEARNED AR, MR. SUNIL TOLOTI APPEARED AND PLACED RE LIANCE ON SMIFS SECURITIES, 348 ITR 302 (SC), B. RAVEENDRAN F ILIAL VS. CIT, 332 ITR 531 (2011) (KER) AND CIT VS. HINDUSTAN COCA COLA BEVERAGES (P) LTD. (DELHI), 331 ITR 192 (2011) . 8. FACTS OF THE CASE HAVE REVEALED THAT THE ASSESSE E HAD TAKEN OVER THE BUSINESS OF A PARTNERSHIP FIRM, NAMELY, SU JAG FINE CHEMICALS. THE ASSESSEE COMPANY WAS FORMED ON 19.2. 1999. IN SUPPORT A CERTIFICATE OF INCORPORATION IS PLACED ON RECORD. THE GOODWILL WAS ACQUIRED BY THE ASSESSEE IN THE ASSESS MENT YEAR 1999-2000 WHEN THE FIRM, AS A GOING CONCERN, WAS TA KEN OVER BY THE COMPANY/ APPELLANT ALONG WITH ALL THE ASSETS. A T THE TIME OF ACQUISITION, THE GOODWILL AS AN ASSET WAS PURCHASED FROM THE FIRM FOR A CONSIDERATION OF RS.24,67,926/-. THEREAF TER FOR A.Y. 1999-00, 2000-01 AND 2001-02, THE ASSESSEE COMPANY HAD CLAIMED DEPRECIATION @ 25% AS INFORMED BY LEARNED A R, MR. SUNIL TALATI. THE WDV FOR THE YEAR UNDER CONSID ERATION IS RS.10,47,157/- OVER WHICH THE DEPRECIATION @ 25% AM OUNTING TO RS.2,60,289/- WAS CLAIMED. ON ACCOUNT OF THESE FACT S, WE HEREBY HOLD THAT THE GOODWILL WAS ACQUIRED AFTER 1 ST DAY OF APRIL, 1998 AS REQUIRED U/S. 32(1 )(II) OF THE ACT. NOW THE ONLY QUESTION LEFT FOR OUR CONSIDERATION IS THAT WHETHER GOODWILL CAN BE CONSIDERED FOR GRANT OF DEPRECIATIO N. IN THIS REGARD, A LATEST DECISION OF HON'BLE HIGH COURT PRO NOUNCED IN ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 9 - THE CASE OF CIT VS. SMIFS SECURITIES, 348 ITR 302 IS RELEVANT WHEREIN IT WAS HELD AS UNDER: 'THE ASSESSING OFFICER HELD THAT GOODWILL WAS NOT A N ASSET FALLING UNDER EXPLANATION 3 TO SECTION 32(1) OF THE INCOME TAX, ACT, 1961 ('THE ACT', FOR SHORT). WE QUOTE HEREINBELOW EXPLANATION 3 TO SECTION 32(1) OF THE ACT: 'EXPLANATION 3- FOR THE PURPOSES OF THIS SUB-SECTIO N, THE EXPRESSIONS 'ASSETS' AND 'BLOCK OF ASSETS' SHALL ME AN - (A) TANGIBLE ASSETS, BEING BUILDINGS, MACHINERY, PL ANT OR FURNITURE; (B)INTANGIBLE ASSETS, BEING KNOW-HOW, PATENTS, COPY RIGHTS, TRADE- MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS O R COMMERCIAL RIGHTS OF SIMILAR NATURE:' EXPLANATION 3 STATES THAT THE EXPRESSION 'ASSET' SH ALL MEAN AN INTANGIBLE ASSET, BEING KNOW-HOW, PATENTS, COPYRIGH TS, TRADE MARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS O R COMMERCIAL RIGHTS OF SIMILAR NATURE. A READING THE WORDS 'ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE' IN CLAUSE ( B) OF EXPLANATION 3 INDICATES THAT GOODWILL WOULD FALL UN DER THE EXPRESSION 'ANY OTHER BUSINESS OR COMMERCIAL RIGHT OF A SIMILAR NATURE:. THE PRINCIPLE OF EJUSDEM GENERIC WOULD STR ICTLY APPLY WHILE INTERPRETING THE SAID EXPRESSION WHICH FINDS PLACE IN EXPLANATION 3(B). IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT 'GOOD WILL' IS AN ASSET UNDER EXPLANATION 3(B) TO SECTION 32 (1) OF T HE ACT.' 9. EARLIER IN THE CASE OF B. RAVEENDRAN PILLAI, 332 ITR 531 (KERALA), THE HON'BLE HIGH COURT HAS ALSO HELD THAT THE GOODWILL IS CERTAINLY COMPARABLE WITH TRADE MARK, FRANCHISEE , COPY RIGHT, ETC., HENCE, ENTITLED FOR THE DEPRECIATION. RESPECT FULLY FOLLOWING THESE DECISIONS WHEREIN THE DOCTRIN OF EJUSDEM GENE RIC IS APPLIED AND HELD THAT THE GOODWILL IS OF LIKE NATURE OF INT ANGIBLE ASSET AS ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 10 - PRESCRIBED, THEREFORE, WE HEREBY HOLD THAT UNDER TH E TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSE E IS ENTITLED FOR THE CLAIM OF DEPRECIATION ON THE DWV OF THE GOO DWILL FOR THE YEAR UNDER CONSIDERATION. GROUND RAISED IN THIS REG ARD IS HEREBY ALLOWED.' 7. THERE IS NO DISPARITY ON FACTS, THEREFORE, WE ALLOW THE APPEAL OF THE ASSESSEE ON THIS ISSUE AND DELETE THE DISALLOWA NCE. NO OTHER GROUND WAS PRESSED, HENCE ALL OTHER GROUNDS ARE REJECTED. 8.1. SINCE THE FACTS OF THE CASE ARE IDENTICAL TO THAT OF AY 2006-07 IN ASSESSEES OWN CASE, TAKING A CONSISTENT VIEW, WE H EREBY ALLOW THE GROUND OF ASSESSEES APPEAL FOR THIS YEAR ALSO AND DIRECT THE AO TO ALLOW THE DEPRECIATION ON GOOD WILL. THUS, GROUND NO.3 O F ASSESSEES APPEAL IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 15 TH DAY OF OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 15/ 10 /2015 2.., .../ T.C. NAIR, SR. PS ITA NO.987/AHD/ 2012 SUJAG FINE CHEMICALS P.LTD. VS. ACIT ASST.YEAR 2008-09 - 11 - !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-III, BARODA 5. 7 8 &45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:; <* / GUARD FILE. ! / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 08.10.2015 (DICTATION-PAD 1 0+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.10.2015 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.15.10.2015 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.10.2015 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER