Compensation to Retiring Partners as Goodwill is Eligible for Depreciation

PCIT Vs Swastik Industries (Gujarat High Court) The issue under consideration is whether the ITAT was right in treating the payments made to retiring partners in the nature of compensation can be termed as goodwill and subsequently eligible for depreciation? High Court states that, the question as to whether ‘goodwill’ is an asset within the meaning of section 32 of the Income-tax Act, 1961, and whether depreciation on ‘goodwill’ is allowable under the said section. The Assessing Officer had held that ‘goodwill’ is not an asset falling under Explanation 3 to section 32(1) of the Ac...