ThynkTax /Tax Reference /Case Laws /Ace Builders - Depreciation on goodwill

Ace Builders - Depreciation on goodwill

High Court·2006·ITR
Facts

Goodwill paid on slump sale; depreciation claimed under Section 32.

Issue

Whether goodwill is an "intangible asset" for depreciation?

Held

Yes, goodwill from acquisition is an intangible commercial right depreciable under Section 32(1)(ii).

Ratio

Goodwill of acquired business is a depreciable intangible. (Note: this was reversed by the Finance Act 2021 amendment, prospective only.)

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