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2017 (10) TMI 926 - AT - Income TaxDepreciation on tenancy rights - whether the tenancy rights fall within the definition of intangible assets for the purpose of depreciation allowance u/s 32(1)(ii)? - Held that:- In the present case, it is undisputed that the amount of ₹ 21,65,629/- was paid to the legal heirs of a former partner as a consequence to an arrangement to settle the dispute between the firm and the deceased partner. The payment so made was capitalised under the head goodwill and tenancy rights in the books of the assessee firm and depreciation was claimed on such amortised amount. However, it is very much apparent that the payment was made to the legal heirs of the deceased partner and thus, the payment was towards the capital/outstanding dues of the deceased partner. It is also apparent that the firm was not a tenant/had not paid for acquisition of tenancy right but has made payments to the legal heirs of the deceased partners and has reflected the same as payment made for acquisition of tenancy rights in its books of account. In such a situation, it cannot be said that the payment was made for acquisition of tenancy rights and accordingly, the question as to whether tenancy rights would fall under the definition of intangible assets for the purpose of claiming depreciation u/s 32 of the Act does not arise in the present appeal - Decided against assessee.
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