Case Law Details
Dadha Pharma Distribution Pvt. Ltd. Vs DC/ACIT (OSD) (ITAT Chennai)
The only grievance of the assessee is denial of depreciation on goodwill which has arisen pursuant to business acquisition made by the assessee from M/s. Dadha Pharma Private Limited (DPPL).
In this case it could be seen that the assessee has acquired distribution business of DPPL w.e.f. 30.09.2015 on slump sale basis which postulate passing of consideration without assigning any values to individual assets and liabilities.
It could be seen that the assets and liabilities have been taken over at values as appearing in the financial statements as on 30.09.2015. The excess payment made by the assessee over the book-value of assets and liabilities has been treated as goodwill which is correct accounting treatment and is in accordance with applicable accounting standards. The assessee has paid lump sum consideration of Rs.735 Lacs. Therefore, the observation of Ld. CIT(A) that the assessee has not purchased the goodwill, is not a correct observation. The case law of Hon’ble Delhi High Court in Triune Energy Services (P.) Ltd. V/s DCIT (65 Taxmann.com 288) squarely apply to the facts of assessee’s case. In this case, it was held by Hon’ble Court that where the assessee purchased business as going concern, consideration paid in excess of value of tangible assets was classifiable as goodwill eligible for depreciation.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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