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CLC & Sons Pvt. Ltd vs. ACIT (ITAT Delhi) (Special Bench)

COURT: ,
CORAM: , ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: July 19, 2018 (Date of pronouncement)
DATE: July 21, 2018 (Date of publication)
AY: 2001-02
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CITATION:
S. 32: Goodwill is an intangible asset. It falls under the expression "any other business or commercial rights of similar nature" and is eligible for depreciation u/s 32(1)(ii) of the Act. The question whether when a firm has been succeeded by a company and net assets of the firm have vested in the company, there is any transfer of goodwill in the real sense and whether the valuation of goodwill done by the assessee is erroneous has to be decided by the Division Bench

It is vivid from the discussion made supra that qua the issue of depreciation on goodwill, the authorities below have divided it into two broader compartments by holding that i) no depreciation can be legally allowed on the amount of genuine goodwill in terms of section 32 of the Act; and ii) when a firm is succeeded by a company and all its net assets vest in the company, there is no transfer of goodwill in real sense and further the valuation of goodwill done by the assessee in the instant case is fallacious

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