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"3.3. The reply filed by the assessee company has been duly considered. Goodwill of a business or profession has not been specifically provided as an asset either in the definition under clause 11 of section 2 of the Act or in section 32 of the Act. Probably, what is described as "goodwill" in the balance sheet of business need not always be an intangible asset entitled to depreciation. It should be capable of independent evaluation. Further , in order that an asset may be depreciable , it should lose its value by use. With due respect to the decision of the Hon‟ble Supreme Court in the case of CIT v Smifs Securities Ltd [2012] 348 ITR 302 (SC) reliance is placed on the decision of Delhi High Court in the case of Sharp Business Systems in ITA No. 492/2012 wherein the Hon‟ble High Court has held that " but for the ownership of intellectual property or knowhow or license or franchise, it would be unable to either access the advantage or asset the right and the nature of the right mentioned or spelt out in the C.O .No . 9 9/M u m/ 2 0 2 4 provision as against the word „ at large‟ or in legal parlance „ in rem‟. The Hon‟ble Delhi Court also distinguished the term goodwill considered as intangible asset by the Hon‟ble Supreme Court in the case of Smifs Securities Pvt Ltd by stating that every species of right spelt out expressly by the statue- i.e. of the intellectual property right and other advantages such as knowhow, franchise, license etc can be said to be alienable (Transferable). Thus the court has emphasized that, the intangible asset should be the one which is alienable , failing which it cannot be termed as intangible.

5. It can be noticed that the AO had placed reliance on the decision rendered by the Hon‟ble Delhi High Court in the case of Sharp Business Systems (supra) and the Bangalore Bench of Tribunal in the case of United Breweries Vs. ACIT (76 taxmann.com103). Before the Ld.CIT(A), the assessee contended that both the above said decisions are not applicable to the facts of the present case. With regard to the decision rendered in the case of Sharp Business Systems (supra), the assessee contended as under:-

"3.27. In the case of Sharp Business System Vs CIT (211 taxman 576) on which the Ld AO has placed reliance, the question arose whether the payment of non-compete fees paid amounts revenue expenditure or capital expenditure. The Hon'ble Delhi High Court held that the non- compete fees paid by the assessee as a consideration for not setting up or undertaking or assisting in the setting up or undertaking any business in India, of selling, marketing and trade of electronic office products for seven years amounted to capital expenditure. It held that such non-compete fees being a right in persona would not fall within the definition of "any other business or commercial right". The present case, relates to acquiring goodwill and distinguishable to the said case relating to payment of non-compete fees....."

8. Convinced with the contentions of the assessee, the Ld.CIT(A) allowed the depreciation claimed on the goodwill. The Revenue is aggrieved.

9. We heard the parties and perused the record. We notice that the two decisions relied upon by the AO, viz., Sharp Business Systems (supra) and United Breweries (supra) were found to be distinguishable on facts. The first decision was related to non-compete fee and the second decision was related to amalgamation of wholly owned subsidiary company. Hence, we are of the view that the AO was not right in placing reliance on the above said two case laws. The amendment brought in by Finance Act, 2021 denying depreciation on goodwill was rightly held by the Ld.CIT(A) to be prospective in nature. Hence, the AO could not take support of the said amendment.