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alok arunkumar bhagat (PRACTICING LAWYER)     24 November 2008

goodwill-depreciation?

can goodwill paid to retiring partner for acquiring business/commercial rights from him be depreciated??? is goodwill a  depreciable asset?



 7 Replies

Sunny Honey (Student)     25 November 2008

 


Goodwill is never subject to depreciation. For reference see Accounting Standard 6 Issued by the ICAI on  Depreciation Accounting, which clarifies that concept of Goodwill is not subject to depreciation.

Sunny Honey (Student)     25 November 2008

However the rule of ejusdem generis can be made applicable to the said concept. The scope of the rule is that words of a general nature following specific and particular words shoud be construed as limited to things which are of the same nature as those specified. The expression in section 32(1)(ii) of the IT Act, 1961 specifies "any other business or commercial rights of similar nature" would include such rights which can be used as a tool to carry on the business. If this test is applied then rights acquired by the assessee under the agreement would fall within the expression mentioned above. Refer for more :- SKYLINE CATERERS (P) LIMITED vs INCOME TAX OFFICER, ITAT, MUMBAI, ITA NO.2965/MUM/2007; ASST YEAR 2003-04, 28TH DECEMBER, 2007 (2008) 13 DTR (MUMBAI) TRIBUNAL 150.

Sunny Honey (Student)     25 November 2008

However the rule of ejusdem generis can be made applicable to the said concept. The scope of the rule is that words of a general nature following specific and particular words shoud be construed as limited to things which are of the same nature as those specified. The expression in section 32(1)(ii) of the IT Act, 1961 specifies "any other business or commercial rights of similar nature" would include such rights which can be used as a tool to carry on the business. If this test is applied then rights acquired by the assessee under the agreement would fall within the expression mentioned above. Refer for more :- SKYLINE CATERERS (P) LIMITED vs INCOME TAX OFFICER, ITAT, MUMBAI, ITA NO.2965/MUM/2007; ASST YEAR 2003-04, 28TH DECEMBER, 2007 (2008) 13 DTR (MUMBAI) TRIBUNAL 150.

alok arunkumar bhagat (PRACTICING LAWYER)     25 November 2008

thank you.

K.C.Suresh (Advocate)     27 November 2008

Thanjs sameer a good work.

K.C.Suresh (Advocate)     27 November 2008

Thanks sameer a good work.

Akanksha   15 May 2020

Sunny Honey

Thanks for sharing your knowledge with us


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