Assessee having recognised goodwill, i.e., excess amount of consideration over the value of net assets of the amalgamating company, in its financial statements following the provisions of AS-14, is entitled to depreciation on the same under s. 32(1)(ii); since the amalgamating company did not have any goodwill recorded in its books of account or as part of a block of depreciable assets, prior to amalgamation, provisions of the sixth proviso to s. 32(1), Expln. 7 to s. 43(1) and Expln. 2(b) to s. 43(6) has no applicability to the facts of the case. The Tribunal also held that the amalgamating company had a vast network of dealers and an existing diversified customer base, which has facilitated the business of the assessee (amalgamated company) pursuant to the amalgamation, and the fair value of these assets viz., “distribution network” and “customer relationship”, has been specifically computed by the independent valuer; depreciation on these assets is allowable. The AO is directed to grant depreciation on “customer relationship” and “distribution network” arising on account of amalgamation.   (AY. 2016-17 & 2018-19)