Goodwill represents one of the most significant yet least verifiable components of modern merger and acquisition transactions, arising from expectations of future synergies, brand value, market position, and other intangible benefits. This article examines whether existing legal, financial, and commercial due diligence frameworks in India are capable of adequately assessing the risks associated with goodwill valuation before a transaction is completed. Through an analysis of major transactions such as Vedanta-Cairn, Tata Steel-Corus, and the proposed Zee-Sony merger, it argues that information asymmetry, governance concerns, valuation uncertainty, and promoter-driven market dynamics often result in acquisition premiums that are insufficiently scrutinized and subsequently lead to substantial goodwill impairments. The article further evaluates the limitations of the current regulatory framework under Indian Accounting Standards, SEBI regulations, and the Companies Act, 2013, highlighting its predominantly reactive approach to goodwill risk. It concludes by advocating for dedicated goodwill stress-testing, stronger board oversight, independent valuation review, and enhanced disclosure requirements to improve accountability and risk assessment in Indian M&A transactions.