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2020 (2) TMI 936 - AT - Income TaxDeduction u/s 36(1)(v) on payment basis - Gratuity contribution to the unapproved fund - claim was basically denied on account of non approval of the scheme by CIT - HELD THAT:- We find that subsequently the CIT vide order dated 21.09.2016 has granted the approval to the gratuity scheme and it is effective from 27.03.2012, being the date falling in the assessment year. In such a situation we are of the view that the assessee is eligible for deduction. We therefore, direct the Assessing Officer to consider the claim of assessee on merits and allow the same in accordance with law. Thus, the ground Nos.1 and 2 are allowed. Denial of claim of deduction on intangible assets - HELD THAT:- It is an undisputed fact that the assessee had acquired electroplating business of Chemetall India Pvt. Ltd. vide agreement dated 15.12.2011 for total consideration of ₹ 11.80 crores which included ₹ 11.51 crores on account of various intangibles, which were valued as per independent valuation. It is Revenue’s case that intangibles cannot be considered to be intangible assets so as to eligible for depreciation. As far as the issue of allowing Non compete fee is considered, we find that the Hon’ble Bombay High Court in the case of Pr.CIT Vs. Piramal Glass Limited [2019 (6) TMI 891 - BOMBAY HIGH COURT] on an identical issue it was held that, ".....It can thus be seen that the rights acquired by the assessee under the said agreement not only give enduring benefit, protected the assessee's business against competence, that too from a person who had closely worked with the assessee in the same business. The expression "or any other business or commercial rights of similar nature" used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include the present situation" Hon’ble Delhi High Court in the case of Areva T&D India Ltd. Vs. DCIT [2012 (4) TMI 79 - DELHI HIGH COURT] has held that specified intangible assets, viz. business claims, business information, business records, contracts, employees and know-how acquired by assessee under slump sale agreement are in nature of ‘business or commercial rights of similar nature’ specified in section 32(1)(ii) of the Act and are accordingly eligible for depreciation under that section. Thus the assessee is eligible for the claim of depreciation and therefore, be allowed and thus, the ground No.3 raised by the assessee is allowed.
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