Case Law Details
S&P Capital IQ (India) Private Limited Vs ACIT (ITAT Hyderabad)
In a landmark decision, the Income Tax Appellate Tribunal (ITAT) Hyderabad has ruled in favor of S&P Capital IQ (India) Private Limited, holding that goodwill, an intangible asset, is eligible for depreciation under Section 32(1) of the Income Tax Act, 1961. This ruling stems from a contentious debate over the treatment of goodwill in the case of amalgamations and acquisitions, specifically addressing the appeal against the order consequent to the directions of the Dispute Resolution Panel (DRP), Bengaluru, for the assessment year 2018-19.
Detailed Analysis
The crux of the appeal was the assessee’s claim for additional depreciation on goodwill amounting to Rs.26,04,06,806/-, inadvertently not claimed in the original return of income for the assessment year 2018-19. The Assessing Officer initially denied the claim, which led to the appeal before the ITAT.
The ITAT’s detailed order traverses the intricate provisions of the Income Tax Act concerning the depreciation on goodwill, drawing heavily on the landmark judgment of the Hon’ble Supreme Court in the case of Smifs Securities Ltd. According to the Tribunal, the decision in Smifs Securities, which recognized goodwill as a depreciable asset, remains binding and applicable.
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