Income Tax Act, 1961

--DepreciationAllowability Goodwill--Assessee has agreed in the sale agreement the value of the SMU agency rights. On the very next day, assessee has chosen to revalue such rights and claimed depreciation on the revalued rights. Assessing officer held that the excess consideration paid over the value of the net assets was in the nature of goodwill paid for the future' profits of the business. Therefore, he allowed the depreciation only on the value mentioned in the agreement. Held: Not rightly so, as in the case of CIT v. SMIFS Securities Ltd. 2012 TaxPub(DT) 2430 (SC) : (2012) 210 Taxman 428 (SC) it had been held that Explanation 3 to section 32(1), which defines the expression 'asset' includes intangible asset like goodwill. Therefore, the goodwill was an asset under Explanation 3(b) to section 32(1) and the depreciation was leviable even on the goodwill.