TMI Blog2007 (9) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... ights, trademarks, franchises which are in the nature of business or commercial rights. The tenancy rights acquired by the assessee cannot be equated with the licence provided u/s 32 so as to qualify it as an intangible asset eligible for depreciation. Therefore, we find that the lower authorities are justified in treating the premium amount not eligible for depreciation. The assessee has paid the premium to the vacating tenants. When the assessee is vacating the premises and giving it to new tenants, the assessee can collect the premium from the new tenants as the assessee had paid premium to the former tenants. That is the way of recovery, if at all necessary for the assessee to get back the amount of premium paid. It cannot be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of premium paid for acquiring office premises amounting to Rs. 1,40,31,000." 3. The assessee had acquired office premises during the previous year under appeal, at Barodawala Mansion, Worli. The premises were acquired as tenants. As part of the deal, the assessee had paid the amount of Rs. 1,40,31,000 for acquiring the premises on perpetual lease. The amount was paid by the assessee to the outgoing tenants for vacating the premises earlier held by them. The owners of the property are not liable to return the said amount or any part thereof to the assessee on vacating the premises. In fact, premium was paid by the assessee to the erstwhile tenants upon which the landlords do not have any liability to account for. 4. The case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partakes the character of a transferable right in the form of licence which is classified under intangible assets for the purpose of depreciation allowance. 7. The learned counsel also argued that the term owned as occurring in section 32 must be assigned a meaning to cover any one in possession of the property in his own exercising such domicile over the property as would enable others being excluded therefrom. The concept of depreciation suggests that tax benefit legitimately belongs to one who invested in the capital asset and utilized the asset thereby losing the investment by wear and tear. He also submitted that the owners of building have furnished a certificate to the effect that they had not claimed depreciation on the build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It means know-how, patents, copyrights, trademarks, licence, franchises etc. need to be similar in nature pertaining to business or commercial rights. It follows that all the above expressions are placed at a same level with similar nature and relating to business or commercial rights. In that sense, the expression "licence" cannot be singled out from business or commercial nature of rights and held as a right referable to tenancy of immovable property. If one applies the principle of " ejusdem generis ", the term "licences" has to be read in the company of the preceding terms like know-how, patents, copyrights and trademarks and also the following words franchises or any other business or commercial rights of similar nature. The ejusdem g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound raised by the assessee reads as below : "The learned CIT(A) erred in confirming that out of the total expenditure of Rs. 20,58,374 a sum of Rs. 15,44,079 incurred by the appellants on repairs and maintenance was required to be considered as capital expenditure and not revenue expenditure." 14. We have gone through the details of expenses incurred by the assessee in repairing and maintaining the premises acquired on lease. In fact, those expenses were incurred by the assessee to make the premises suitable for accommodating the office and functioning of the assessee. Those expenses could not be held as capital expenditure. The expenses were incurred by the assessee for updating the facilities of water supply, electricity supply an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has not maintained meticulous details of running of cars through log books. The general contention of the assessee is that motor cars were not used for the personal use except for a sum of Rs. 65,000 already disallowed by the assessee. So the personal user is already established. The assessee itself has disallowed the amount of Rs. 65,000. This has been increased to Rs. 1,47,252 by the assessing authority. We are of the considered view that the quantum of disallowance made out by the Assessing Officer is just and proper in the present case. This ground is, therefore, dismissed. 17. The fourth and last ground raised by the assessee is as follows : "The learned CIT(A) erred in confirming the disallowance to the extent of Rs. 27,966 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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