CIT v. Smifs Securities Ltd.

348 ITR 302Supreme Court of India2012#119 most cited

What is CIT v. Smifs Securities Ltd. authority for?

Goodwill, whether arising from an amalgamation or a slump sale, is an intangible asset eligible for depreciation under Section 32(1) of the Income-tax Act. While the assessee must prove the existence and valuation of such goodwill, it is recognized as a depreciable asset.

540

judgments rely on this decision, according to BharatTax’s citation analysis of 367,837 Indian tax judgments — from 2011 to 2026.

Also referred to as

Smifs Securities Ltd. · depreciation on goodwill · Section 32(1) · intangible asset · goodwill on amalgamation · slump sale · business acquisition · commercial rights · Section 32(1)(ii) · excess consideration · Section 43(1) · CIT v. Smifs Securities Ltd.

Also reported as

24 Taxmann.com 222210 Taxmann 42813 SCC 488252 CTR 233

Sections most often in play

Section 143(3)Section 32(1)Section 115JBSection 32Section 32(1)(ii)Section 14ASection 143(2)Section 43(1)

Issues it is cited on

goodwill arising on amalgamationdepreciation on goodwillbusiness transfer agreementsection 43(6)(c)section 32(1)(ii)commercial rightstransferor companysection 43(6)transferee companyslump salesection 32(1)section 170

Judgments citing CIT v. Smifs Securities Ltd.

M/S. V.V.V. & Sons Edible Oils Ltd., Virudhunagar vs. DCIT, Central-1, Madurai

In the result, the appeals of the assessee in ITA Nos

ITA 2280/CHNY/2019[2015-16]Status: DisposedITAT Chennai05 Aug 2022AY 2015-16

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

M/S. V.V.V. & Sons Edible Oils Ltd., Virudhunagar vs. DCIT, Central-1, Madurai

In the result, the appeals of the assessee in ITA Nos

ITA 2279/CHNY/2019[2014-15]Status: DisposedITAT Chennai05 Aug 2022AY 2014-15

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

M/S. V.V.V. & Sons Edible Oils Ltd., Virudhunagar vs. DCIT, Central-1, Madurai

In the result, the appeals of the assessee in ITA Nos

ITA 2278/CHNY/2019[2013-14]Status: DisposedITAT Chennai05 Aug 2022AY 2013-14

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

M/S. V.V.V. & Sons Edible Oils Ltd., Virudhunagar vs. DCIT, Central-1, Madurai

In the result, the appeals of the assessee in ITA Nos

ITA 2277/CHNY/2019[2012-13]Status: DisposedITAT Chennai05 Aug 2022AY 2012-13

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

M/S. V.V.V. & Sons Edible Oils Ltd., Virudhunagar vs. DCIT, Central-1, Madurai

In the result, the appeals of the assessee in ITA Nos

ITA 2276/CHNY/2019[2011-12]Status: DisposedITAT Chennai05 Aug 2022AY 2011-12

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

M/S. V.V.V. & Sons Edible Oils Ltd., Virudhunagar vs. DCIT, Central-1, Madurai

In the result, the appeals of the assessee in ITA Nos

ITA 2275/CHNY/2019[2010-11]Status: DisposedITAT Chennai05 Aug 2022AY 2010-11

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

M/S. V.V.Vanniaperumal & Sons, Virudhunagar vs. PCIT-2, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 1765/CHNY/2019[2009-10]Status: DisposedITAT Chennai05 Aug 2022AY 2009-10

Bench: Shri Mahavir Singhand Shri G. Manjunatha

For Appellant: Shri P. G. Sekar, C.A ""For Respondent: Dr. S. Palani Kumar,CIT
Section 143(3)

…ssets transferred and hence, the AO estimated the goodwill of the assessee company as on 01.04.2009 at Rs.14,56,16,817/- and allowed depreciation at the rate of 25% relying on the decision of Hon’ble Supreme Court in the case of CIT vs. Smifs Securities Ltd., 348 ITR 302(SC)and also Co- ordinate Bench of ITAT in the case of DCIT vs. Toyo Engineering India Ltd., ITA No.3279/Mum/2008. 4.6 The AO by applying the above ratio, recomputed the depreciation being difference between the book value of the asset and the liabilities transferred to goodwill account of the assessee company which worked out to Rs.14,56,16,817/-…

Geodis Overseas Pvt. Ltd., Gurgaon vs. DCIT, Circle-10(1), New Delhi

In the result, the appeals of the assessee for both the AYs 2014-15

ITA 2742/DEL/2019[2014-15]Status: DisposedITAT Delhi29 Jul 2022AY 2014-15

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Vishal Kalra, AdvocateFor Respondent: Ms. Anupama Singla, Sr. DR
Section 32Section 32(1)(ii)

…to be not includible in the expression used in the provision to explain the unspecified intangible assets. In our considered opinion, this issue is no more res integra in view of the judgment of the Hon'ble Summit court in CIT vs. Smifs Securities Ltd. (2012) 348 ITR 302 (SC) in which it ITA No. 1976/Del/2006 has been held: "that goodwill will fall under the expression 'or any other business or commercial rights of similar nature'" and, hence, qualifies for depreciation u/s 32(1) of the Act. We, therefore, answer the legal issue raised in the question before the Special bench in affirmative by holding, in princip…

Geodis Overseas Pvt. Ltd., Gurgaon vs. DCIT, Circle-10(1), New Delhi

In the result, the appeals of the assessee for both the AYs 2014-15

ITA 2741/DEL/2019[2015-16]Status: DisposedITAT Delhi29 Jul 2022AY 2015-16

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Vishal Kalra, AdvocateFor Respondent: Ms. Anupama Singla, Sr. DR
Section 32Section 32(1)(ii)

…to be not includible in the expression used in the provision to explain the unspecified intangible assets. In our considered opinion, this issue is no more res integra in view of the judgment of the Hon'ble Summit court in CIT vs. Smifs Securities Ltd. (2012) 348 ITR 302 (SC) in which it ITA No. 1976/Del/2006 has been held: "that goodwill will fall under the expression 'or any other business or commercial rights of similar nature'" and, hence, qualifies for depreciation u/s 32(1) of the Act. We, therefore, answer the legal issue raised in the question before the Special bench in affirmative by holding, in princip…

ACIT 13 (3)(2), Mumbai vs. M/S Zelle Biotechnology Pvt Ltd., Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 7675/MUM/2019[2016-17]Status: DisposedITAT Mumbai27 Jul 2022AY 2016-17

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleacit-13(3)(2) V. M/S. Zelle Biotechnology Pvt. Ltd., Room No. 229/219, 2Nd Floor 110, Udyog Bhavan Aayakar Bhavan, M.K. Road Sonawala Road, Goregaon (E) Mumbai - 400020 Mumbai – 400063 Pan: Aaacz2106R (Appellant) (Respondent) Assessee By : Shri Meet Shah Department By : Shri Hoshang B. Irani

For Appellant: Shri Meet ShahFor Respondent: Shri Hoshang B. Irani
Section 143(2)Section 143(3)Section 32Section 32(1)

…or acquiring the net assets of the company (JSCPL). So the difference in the purchase price of shares and value of assets has to be recorded in books is the goodwill amount paid for the business and further, assessee relied on CIT v. SMIFS Securities Limited [348 ITR 302], Jeypore Sugar Co. Ltd. v. ACIT [(2011) 44 SOT 625]. 5. After considering the submissions of the assessee Assessing Officer rejected the claim of the assessee, the Assessing Officer proceeded to disallow the claim of the assessee of the depreciation on goodwill with the following observations: - 4 M/s. Zelle Biotechnology Pvt. Ltd., (i). the g…

Altimetrik India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 477/BANG/2021[2016-17]Status: DisposedITAT Bangalore27 Jul 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Smt. Rashmi R., AdvocateFor Respondent: Shri Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)

…that the Tribunal in assessee’s own case for AY. 2015- 16 has allowed this claim of the assessee and directed the AO to compute depreciation in accordance with the principles laid down in the Supreme Court ruling in the case of Smifs Securities Ltd. — (2012) 348 ITR 302 (SC). 28. We have considered the rival submissions and perused the material on record. We notice the coordinate Bench of this Tribunal in the assessee’s own case for AY 2015-16 in IT(TP)A No.2511/Bang/2019 dated 03.02.2022 has dealt with this issue and held as follows:- “9. The decision relied by the Ld.DR does not support the case of revenue fo…

DCIT, Circle-10(1), New Delhi vs. Glf Lifestyle Pvt. Ltd., New Delhi

In the result, the appeals of the Revenue for the AY 2013-14 and AY

ITA 381/DEL/2018[2014-15]Status: DisposedITAT Delhi25 Jul 2022AY 2014-15

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Ms. Anupama Singla, Sr. DR
Section 143(2)Section 32(1)(ii)

…he assessee got an up and running business. The assessee has relied upon various case laws wherein, intangible assets acquired out of slump sale are treated as goodwill. In the judgement delivered by Hon'ble Supreme Court in ClT v. Smifs Securities ltd (2012) 348 ITR 302 (SC) excess consideration paid by the assessee over the value of net assets acquired has been considered as goodwill. The assessee also relied upon the following decisions of jurisdictional High Court/ Tribunal wherein, the balance payment over and above the book value of net tangible assets, was allocated by the assessee towards acquisition of b…

DCIT, Circle-10(1), New Delhi vs. Glf Lifestyle Pvt. Ltd., New Delhi

In the result, the appeals of the Revenue for the AY 2013-14 and AY

ITA 380/DEL/2018[2013-14]Status: DisposedITAT Delhi25 Jul 2022AY 2013-14

Bench: Shri Shamim Yahya & Ms. Astha Chandra

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Ms. Anupama Singla, Sr. DR
Section 143(2)Section 32(1)(ii)

…he assessee got an up and running business. The assessee has relied upon various case laws wherein, intangible assets acquired out of slump sale are treated as goodwill. In the judgement delivered by Hon'ble Supreme Court in ClT v. Smifs Securities ltd (2012) 348 ITR 302 (SC) excess consideration paid by the assessee over the value of net assets acquired has been considered as goodwill. The assessee also relied upon the following decisions of jurisdictional High Court/ Tribunal wherein, the balance payment over and above the book value of net tangible assets, was allocated by the assessee towards acquisition of b…

M/S Arkema Peroxides India Ltd., Chennai vs. The Asstt. Comissioner of Income Tax, Corporate Circle1(1), Chennai

In the result, appeal filed by the assessee is dismissed

ITA 897/CHNY/2020[2016-13]Status: DisposedITAT Chennai13 Jul 2022AY 2016-13

Bench: Shri V. Durga Rao & Shri G. Manjunatha

For Appellant: Mr. R.Vijayaraghavan, Advocate
Section 32(1)(ii)

…आयकर अपील"य अ"धकरण, ‘सी ’ "याय पीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI "ी वी. दुगा" राव, "या"यक सद"य एवं "ी जी. मंजुनाथ, लेखा सद"य के सम$ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A. No. 897/Chny/ 2020 ("नधा"रणवष" /Assessment Year: 2016-17) M/s.Arkema Peroxides India Pvt.Ltd. Vs The Assistant Commissioner of 1st floor, Balmer Laurie House, Income Tax 628, Anna Salai, Teynampet, Corporate Circle-1(1) Chennai-18. Chennai. PAN: AAACE 1713F (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ"क"ओरसे/ Appellant by : Mr. R.Vijayaraghavan,…

ACIT Central Circle 2(1), Chennai vs. Anjana Medicare Services P. Ltd., Trichy

In the result, the revenue’s appeal stand dismissed

ITA 3144/CHNY/2017[2009-10]Status: DisposedITAT Chennai13 Jul 2022AY 2009-10

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: S/Shri G. Baskar & I. Dinesh (Advocates)-Ld. ARsFor Respondent: Shri M. Rajan (CIT) –Ld. DR
Section 143(3)

…as well as consequential depreciation as granted by Ld. CIT(A) is in order. It is settled law that the goodwill is an intangible asset and is eligible for depreciation as per the decision of Hon’ble Supreme Court in the case of CIT V/s Smifs Securities Ltd. (348 ITR 302). Pertinently, depreciation on goodwill has been allowed by the revenue in subsequent years also. 12. The last issue that form subject matter of appeal is addition of Rs.223.84 Lacs which has been added on the allegation that it represents unexplained cash payment. From the facts, it emerges that the Chairman of the assessee Company was the chair…

Zuari Cement Limited, Kadapa vs. Asst. Commissioner of Income Tax, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 66/HYD/2019[2014-15]Status: DisposedITAT Hyderabad27 Jun 2022AY 2014-15

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…ch that the Assessing submitted by the Officer (“AO”) has erred in not allowing the claim of depreciation on goodwill in terms of the judgment of the Hon'ble Supreme Court in the case of Smifs Securities Limited vs. Commissioner of Income-tax, Kolkata (2012) (348 ITR 302). In view thereof, a query was raised by the Hon'ble Bench as to whether the allowability of the said claim was affected by the amendments brought about in section 2(11) (definition of block of assets) and Section 32(1)(ii) of the Income Tax Act, 1961 (“the Act”) vide Finance Act, 2021. 37 Zuari Cement Limited, Kadapa In connection with the ab…

Avis Hospitals India Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-1(1), Hyderabad

In the result, the appeal filed by the assessee is allowed

ITA 1390/HYD/2019[2016-17]Status: DisposedITAT Hyderabad27 Jun 2022AY 2016-17

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Charyassessment Year: 2016-17 M/S. Avis Hospitals India Vs. The Acit,Circle-1(1) Limited Hyderabad-500 029 8-3-598/A/5, Road No.10 Banjara Hills Hyderabad-500 033

For Appellant: Shri M.V.PrasadFor Respondent: Shri Rohit Mujumdar
Section 32Section 32(1)(ii)Section 43(1)

…tion of Depreciation made by the Assessing Officer of Rs. 99,21,802/- claimed on Goodwill, the AO disallowed the depreciation @25% on entire goodwill of Rs. 3,965,87,209/-. Further, the Supreme court in the case of CIT vs.Smifts Securities Limited, 210 Taxman 348 ITR 302 as relied by the appellant as discussed supra speaks about goodwill acquired on amalgamation. As per this, depreciation allowed on recognized as per Accounting Standards and not on self-generated goodwill. Therefore, since this good will of Rs. 3,96,87,209/- is internally generated goodwill, hence, the case laws relied upon by the appellant is no…

Zuari Cement Limited, Kadapa vs. Asst. Commissioner of Income Tax, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 2169/HYD/2018[2012-13]Status: DisposedITAT Hyderabad27 Jun 2022AY 2012-13

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…ch that the Assessing submitted by the Officer (“AO”) has erred in not allowing the claim of depreciation on goodwill in terms of the judgment of the Hon'ble Supreme Court in the case of Smifs Securities Limited vs. Commissioner of Income-tax, Kolkata (2012) (348 ITR 302). In view thereof, a query was raised by the Hon'ble Bench as to whether the allowability of the said claim was affected by the amendments brought about in section 2(11) (definition of block of assets) and Section 32(1)(ii) of the Income Tax Act, 1961 (“the Act”) vide Finance Act, 2021. 37 Zuari Cement Limited, Kadapa In connection with the ab…

Zuari Cement Limited, Kadapa vs. Asst. Commissioner of Income Tax, Circle-1(1), Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 182/HYD/2018[2013-14]Status: DisposedITAT Hyderabad27 Jun 2022AY 2013-14

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…ch that the Assessing submitted by the Officer (“AO”) has erred in not allowing the claim of depreciation on goodwill in terms of the judgment of the Hon'ble Supreme Court in the case of Smifs Securities Limited vs. Commissioner of Income-tax, Kolkata (2012) (348 ITR 302). In view thereof, a query was raised by the Hon'ble Bench as to whether the allowability of the said claim was affected by the amendments brought about in section 2(11) (definition of block of assets) and Section 32(1)(ii) of the Income Tax Act, 1961 (“the Act”) vide Finance Act, 2021. 37 Zuari Cement Limited, Kadapa In connection with the ab…

Zuari Cement Limited, Kadapa vs. ACIT, Circle-1, Kadapa

Accordingly, this issue is allowed for statistical purposes

ITA 254/HYD/2017[2012-13]Status: DisposedITAT Hyderabad27 Jun 2022AY 2012-13

Bench: Shri Laliet Kumar & Shri Laxmi Prasad Sahusl.

For Appellant: Shri Deepak Chopra and Shri Nitin Narang, AdvocatesFor Respondent: Shri Rajendra Kumar, CIT-DR
Section 143(3)

…ch that the Assessing submitted by the Officer (“AO”) has erred in not allowing the claim of depreciation on goodwill in terms of the judgment of the Hon'ble Supreme Court in the case of Smifs Securities Limited vs. Commissioner of Income-tax, Kolkata (2012) (348 ITR 302). In view thereof, a query was raised by the Hon'ble Bench as to whether the allowability of the said claim was affected by the amendments brought about in section 2(11) (definition of block of assets) and Section 32(1)(ii) of the Income Tax Act, 1961 (“the Act”) vide Finance Act, 2021. 37 Zuari Cement Limited, Kadapa In connection with the ab…