Consideration paid for goodwill on acquisition of running business is eligible for depreciation

Background • The taxpayer took over a running business in Assessment Year (AY) 2000-01. The consideration payable towards acquiring the assets and liabilities of the business also included amount attributable towards goodwill. The taxpayer claimed depreciation on goodwill at the rate applicable for intangible assets (25%). The claim for depreciation on goodwill was accepted by the Assessing officer (AO) in AY 2000-01 and subsequent years. • For AY 2003-04, the AO examined the issue of claim for depreciation on goodwill and allowed the claim. • For the year under consideration (AY 2004-05...