The assessee company acquired a transmission and distribution business as a going concern for a lump sum consideration of Rs.44.7 crores through slump sale agreement.
The net tangible assets were valued at Rs.28.11 crores and the balance Rs. 16.58 crores was allocated by the transferee towards acquisition of bundle of “business and commercial rights” being business information; business records; contracts; employees etc, which had been termed as “goodwill”.
The net tangible assets were valued at Rs.28.11 crores and the balance Rs. 16.58 crores was allocated by the transferee towards acquisition of bundle of “business and commercial rights” being business information; business records; contracts; employees etc, which had been termed as “goodwill”.
The assessee company claimed that the said “business and commercial rights” were an “intangible asset” and eligible for depreciation u/s 32(1)(ii) and claimed depreciation accordiagly but same was rejected by the AO, CIT(A) & Tribunal on the ground that depreciation was not allowable on “goodwill”.
On appeal by the assesseeto the Hon'ble high cour , HELD that the specified intangible assets acquired under slump sale agreement were in the nature of "business or commercial rights of similar nature" specified in Section 32(1)(ii) of the Act and were accordingly eligible for depreciation.
Appeal NO:- ITA’s 315/2010, 1151/2010 & 1152/2010
AREVA T & D INDIA LTD
versus-
THE DEPUTY COMMISSIONER OF INCOME-TAX