2012 (8) TMI 713 - SC - Income Tax

Claim of Depreciation on Stock Exchange Membership Cards - Held that:- As decided in M/s Techno Shares & Stocks Ltd. Versus CIT IV [2010 (9) TMI 6 - SUPREME COURT OF INDIA] by virtue of Explanation 3 to Section 32(1)(ii) the commercial or business right which is similar to a "licence" or "franchise" is declared to be an intangible asset, therefore, the right of membership, which includes right of nomination, is a "licence" or "akin to a licence" which is one of the items which falls in Section 32(1)(ii) of and the Tribunal was right in holding that depreciation was allowable on the cost of the membership card - in favour of assessee.

Claim of Depreciation on goodwill - Scheme of Amalgamation - Held that:- Explanation 3 states that the expression `asset' shall mean an intangible asset, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. A reading the words `any other business or commercial rights of similar nature' in clause (b) of Explanation 3 indicates that goodwill would fall under the expression `any other business or commercial right of a similar nature' - in favour of assessee.

Cancellation of disallowance of bad debt - Held that:- Bad debt claimed by the assessee was incurred in the normal course of business and, therefore, the assessee was entitled to deduction u/s 36(1)(vii)- the manner in which the assessee maintains its accounts is not conclusive for deciding the nature of expenditure - in favour of assessee.