In the absence of specific valuation of assets/liabilities and goodwill, depreciation on goodwill created in the books of account at the time of amalgamation not allowable

ITAT Mumbai in this case was of the view that the perusal of AS 14 does not support the contention of the taxpayer that the investment by the taxpayer over the net assets taken over should be treated as goodwill. It was held that unless the fair valuation of assets, including any goodwill, is carried out and investment is earmarked towards purchase of goodwill, there is no question of apportioning any amount of consideration towards purchase of goodwill. The consideration in the form of cancellation of investments cannot be said to have been made for purchase of assets at book value, when the ...