Consideration paid for goodwill on acquisition of running business is eligible for depreciation

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Koch Chemical Technology Group India Pvt. Ltd. (ITA No. 2680/Mum/09) dated 28 January 2011

The ruling seems to reiterate the view expressed by the Kerala High Court in the case of B. Raveendran Pillai v. CIT (Kerala) 7 Taxmann.com 92 (ITA No. 1741 of 2009) and by the Delhi High Court that depreciation would be allowable on goodwill where a business is purchased on a going concern basis, leading credence to the claim that depreciation on goodwill may be allowable based on the facts of the case.