Commissioner Of Income Tax vs M/S. Smifs Securities Ltd. (Presently ... on 9 June, 2010
4.3.6. In the light of the above discussion it can be said goodwill is
generated with the business. That the business was conducted in an
unorganized sector would be of no relevance. Similarly, that the
impugned transaction was between two related entities cannot be
reason, against the existence or transfer of goodwill. And goodwill
need not be reflected in the balance sheet unless paid for,
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ITA No.267/Viz/2015
M/s Cresa Financial Services Pvt. Ltd., Rajahmundry
4.3.7. The next issue arises whether the impugned intangible rights
acquired under the Business Transfer Agreement would be eligible for
depreciation under section 32(1). In this regard, it is relevant to refer to the
discussion of the Hon'ble Apex Court on the issue whether goodwill is an
asset within the meaning of Sec.32 of the I.T.Act. The Hon'ble Apex Court in
the case of CIT Vs. Smifs Securities 348 ITR 302 discussed as under :