Depreciation on goodwill
Case: Dy. CIT vs Ebix Software India Pvt Ltd, Delhi ITAT
Outcome: Assessee
Facts
- During the course of the assessment proceedings, the Assessing Officer had disallowed depreciation claimed by the Assessee on goodwill recorded pursuant to a business transfer agreement.
Key points
- Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., wherein it was concluded that goodwill was an intangible asset as defined under section 32(1)(ii) of the Act, hence, eligible for depreciation.
- Hence, it was inferred that depreciation was allowable on goodwill.