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2015 (3) TMI 308 - AT - Income TaxDepreciation on intangible asset disallowed - Customer Base, Material Suppliers, Technical Manpower,Technology and Patents - assessee was engaged in the business of trading in two wheeler brake systems and components - Held that:- No merit in the plea of the Assessing Officer that the assets were not depreciable assets as the same were not subject to wear and tear due to diminish in value with use and efflux of time. In the case of intangible asset being commercial/business rights diminution in value or physical wear and tear is not an essential condition for admissibility for depreciation under section 32, if the assets used as a business tool for earning the income, was the proposition laid down by Mumbai Bench of the Tribunal in DCIT Vs. Weizmann Forex Ltd. (2012 (5) TMI 162 - ITAT MUMBAI). Following the same, we find no merit in the plea of Assessing Officer in denying the claim of depreciation under section 32(1)(ii) of the Act. Even otherwise, if the same are treated as goodwill of the business acquired by the assessee, then following the ratio laid down by the Hon'ble Supreme Court in CIT Vs. Smifs Securities Limited (2012 (8) TMI 713 - SUPREME COURT), the alternate plea of the assessee is to be allowed vis-à-vis the claim of depreciation on goodwill. Further, there is no merit in the observations of Assessing Officer that the Seller did not possess any intangible assets as the same were not reflected in its Balance Sheet. The assets acquired by assessee were self generated assets of Seller and hence no value reflected in its Balance Sheet. We find no merit in the observations of Assessing Officer in this regard and the same is dismissed. The next observation of Assessing Officer that no separate costs had been attributed to individual assets acquired by assessee have no relevance and the same is dismissed. Accordingly, we direct the Assessing Officer to allow depreciation on the WDV of intangible assets acquired in the preceding year and brought forward in the year under consideration. Thus, the Assessing Officer is directed to allow depreciation on intangible assets - Decided in favour of assessee.
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