Assessee a public limited company had acquired and taken over the cement undertakings of J.K. Synthetics Ltd. (‘JKSL’) as a going concern with effect from 4.11.2004, relevant to A.Y. 2005-06, for a purchase consideration of Rs.467.95 crores and also issue of one share of J.K. Cement Ltd. against ten shares of JKSL, aggregating to Rs.7,42,69,500/-, free of cost. The assessee company had issued 74,26,950 equity shares of Rs.10/- each free of cost to the shareholders of JKSL (in terms of rehabilitation scheme and takeover of the cement units) by debiting the goodwill account. It claimed depreciation on the same. AO rejected the assessee’s claim, observing that the assessee had not claimed any depreciation on goodwill, but had allocated the entire amount of share capital issued to the share holders of M/s JKSL free of cost, among all the fixed assets of the assessee company and has thus enhanced the value of the fixed assets, which is not permissible. The ld. CIT(A) reversed the orders of the AO on the ground that issuance of shares was towards part payment of purchase consideration and hence was included in the cost of acquisition of the cement undertaking; that therefore, the assessee could not be deprived of depreciation by merely debiting the issue of shares to the goodwill account. The CIT(A) held in the alternative that even if the consideration in the form of shares was paid for purchase of goodwill, this payment could be considered as payment for acquiring brands of the demerged company, on which depreciation was allowable u/s 32 of the I.T. Act. The Tribunal, following the earlier years Tribunal orders, concurred with the findings of the CIT(A) and allowed the depreciation. (ITA No. 15/LKW/2018, order dt. 07.12.2018) ( AY. 2012-13)