Case Law Details
I&B Seeds Private Limited Vs ACIT ( ITAT Bangalore)
Introduction: The ITAT Bangalore issued a significant order in the case of I&B Seeds Pvt Ltd vs ACIT, directing re-adjudication on the claimed depreciation for goodwill arising from a slump sale. The order addresses various grounds of appeal, challenging the disallowance of depreciation on goodwill.
Detailed Analysis: The appellant, I&B Seeds Pvt Ltd, appealed against NFAC orders for the assessment years 2017-18, 2018-19 & 2020-21. The core issue revolves around the disallowance of depreciation on goodwill arising from the acquisition of Mr. Praveen Noojibail’s proprietary concern and Sasya Gentech Pvt Ltd through a slump sale.
The appellant argued that the claimed goodwill is an intangible asset eligible for depreciation under section 32(1) of the Act. They cited the Hon’ble SC’s precedent in Smifs Securities Ltd. and various other decisions supporting the eligibility of goodwill for depreciation.
The Tribunal referred to its earlier decision in the appellant’s case for the assessment year 2015-16, where it allowed depreciation on goodwill. It emphasized that goodwill arising from a slump sale is akin to any other commercial or business right, eligible for depreciation.
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