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2019 (3) TMI 1254 - HC - Income TaxRevision u/s 263 - debatable issue - non-compete and trademarks - capital receipt - erroneous or prejudicial to the interest of the Revenue - intangible assets like trademark, brand names etc. were self-generated and not acquired from others could be brought to tax only with effect from 1st April, 1998 - Applicability of amendment u/s 55(2)(a) - ITAT held that The non-compete fee was not taxable in law and the trademark was ‘self generated’is not taxable in AY 1995-96 - HELD THAT:- Section 55(2) (a) of the Act was amended by the Finance Act, 2001 with effect from 1st April, 2002 whereby there was deemed to be a nil cost of acquisition in respect of a self-generated trademark. Consequently, from AY 2002-03 onwards any amount received for assignment/transfer of a trademark would be taxable under ‘capital gains’. This amendment was clearly prospective. Both receipts i.e. the ‘non-compete fee’ and the payment towards assignment of trademark were disclosed by the Assessee in Part-IV of the return for the AY in question. With the trademark being ‘self-generated’ and not acquired for consideration, the cost of acquisition of the said marks could not be substituted as the market value as on 1st April, 1981 so as to attract ‘capital gains.’ PNB Finance Limited v. CIT [2008 (11) TMI 7 - SUPREME COURT]followed - decided in favour of the Assessee The view taken by the AO on the nature of the non-compete fee and the consideration for assignment of trademark was a plausible one. There was no occasion for the CIT to assume jurisdiction under Section 263 of the Act. In PCIT v. Delhi Airport Metro Express Pvt. Ltd. [2017 (9) TMI 529 - DELHI HIGH COURT] it was held that the CIT had to come to a prima facie finding as regards the merits of an issue before seeking to set aside the same and remanding it to the AO for de novo adjudication. That is absent in the case on hand - answered in favour of the Assessee
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