Goodwill Depreciation: ITAT allows Depreciation Claims for AYs 2016- 18 Despite 2021 Finance Bill Exclusion

The ITAT ruled that depreciation claims on goodwill for the assessment years 2016-18 can still be claimed, despite the exclusion of goodwill from the scope of depreciation under the 2021 Finance Bill. The ruling came as a relief to taxpayers who had earlier relied on depreciation claims for goodwill, which was recognized under the Income Tax Act. The court clarified that the amendment in the Finance Bill does not apply retrospectively, meaning taxpayers can still claim depreciation for goodwill for previous years. This judgment underscores the importance of clarity on tax laws and their impact on businesses, particularly regarding intangible assets like goodwill.