Case Law Details
DCIT Vs Aichelin Unitherm Heat Treatment Systems India Pvt Ltd (ITAT Pune)
ITAT noted that that the assessee has shown goodwill for Rs.7,02,53,750/-on which claimed depreciation @ 25% to an extent of Rs.1,75,63,438/-.
The AO issued show cause notice dated 07-03-2014 requesting the assessee as to why the depreciation charged on goodwill should not be disallowed which is reproduced at page 2 of the assessment order.
The assessee replied to such show cause notice contending that the assessee was formed as a result of joint venture agreement between Unitherm Engineers Limited and Aichelin GMBG Austria. The assessee purchased furnace division of Unitherm Engineers Limited by way of slump sale for a consideration of Rs.14,28,89,936/- and value of net tangible assets at Rs.2,15,99,936/-. The balance amount of Rs.12,12,90,000/-(Rs.14,28,89,936/- – Rs.2,15,99,936/-) was shown as intangible assets. According to the assessee, the value of goodwill is the amount paid over and above the tangible assets and after reducing there from the values assigned to other intangible assets and placed reliance on the decision of Hon’ble Supreme Court in the case of Smifs Securities Ltd. reported in 348 ITR 302 (SC).
According to the AO, the goodwill is commercial benefit and the assessee is not entitled to depreciation u/s. 32(1)(ii) of the Act.
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