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(x) The CIT(A) repelled the contention of the assessee Company vide order dated 4th April, 2008 thereby reaffirming the stand of the AO on the ground that goodwill has not been specifically included under Section 32(1)(ii) of the Act.

(xi) Being aggrieved by the order of the CIT(A), the assessee Company preferred an appeal before the Income Tax Appellant Tribunal (ITAT), which deliberated on the rival contentions of the parties. The ITAT dismissed the appeal of the assessee Company by the impugned order dated 24 th April, 2009. The impugned order held that the statutory expression of the provision granting depreciation on intangible assets does not include all the intangible assets and that the residual clause, viz., "any other business or commercial rights of similar nature"

"Whether ITAT erred in deleting the addition of Rs.71,40,000/- made by the assessing officer on account of depreciation on goodwill?"

5. To appreciate the question of law involved in these two appeals the relevant facts necessary for disposal of ITA No.1151/2010 and ITA No.1152/2010 are enumerated as below:-

(i) The present appeals by Revenue challenge the orders of the ITAT whereby the ITAT held that the assessee was entitled to depreciation for acquiring marketing and territorial rights to sell through dealers and distributors i.e. the network created by the seller for sale in India.
(vii) The Revenue carried the matter in appeal before the ITAT. The ITAT dismissing the appeal of the Revenue held that "the assessee has not claimed depreciation on goodwill. It acquired commercial rights to sell products under the trade name and paid consideration in dispute for acquiring marketing and territorial rights to sell through dealers and distributors i.e. the network created by the seller for sale in India. Under the agreement, it became entitled to use infrastructure developed by the seller. Rights were acquired since 1.4.1998 and these rights have all along been treated as an asset entitled to depreciation and depreciation was actually allowed in the past. The learned Assessing Officer, in our view, was not correct in making a departure from the past and in holding that payment was made for acquisition of "goodwill". Payment had been made for acquisition of commercial rights on which depreciation is permissible. The Assessing Officer was further not justified in treating entries in the books of account as conclusive and in taking payment in dispute as consideration for acquisition of goodwill. It is now more or less settled that entries in books cannot be treated as conclusive and true nature of transaction has to be determined with reference to law. The learned CIT (Appeals) in the impugned order examined the issue with reference to agreement and found that payment was made for acquisition of commercial rights. On facts and circumstances of the case, we do not find any error in the approach of the learned CIT(Appeals)."

(viii) Aggrieved by the said impugned order rendered by the ITAT the Revenue has preferred the present appeals under Section 260A of the Act.

6. On behalf of the assessee it was urged that Section 32(1)(ii) of the Act enlist certain intangible assets eligible for depreciation which comprises knowhow, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature. It was urged that the rule of ejusdem generis being applied the phrase "any other business or commercial rights of similar nature" would mean rights similar in nature as specified assets, viz., intangible, valuable and capable of being transferred. It was argued that conversely depreciation under the said Section cannot be restricted only to six specified intangible assets. In support of this submission the assessee relied on the decision of the Supreme Court in the case of Techno Shares and Stocks Ltd. v. CIT, 327 ITR 323. It was alternatively argued on behalf of the assessee that goodwill per se is eligible for depreciation under Section 32(1)(ii) of the Act. Counsel for the assessee relied on the decision of this Court in the case of CIT v. Hindustan Coco Cola Beverages (P) Ltd., 331 ITR 192 in this behalf.