TMI Blog2012 (6) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The previous year relevant for the assessment year being the 3rd year of business, the assessee is entitled to depreciation at 25% of the written down value after reckoning depreciation for the preceding years. appeal is accordingly allowed - IT Appeal No. 379 of 2010 - - - Dated:- 24-6-2011 - C.N. Ramachandran Nair and Bhabani Prasad Ray, JJ. Anil K. Narendran for the Appellant. P.K.R. Menon and Jose Joseph for the Respondent. JUDGMENT Ramachandran Nair, J. The sole question raised in the appeal filed by the assessee is whether assessee is entitled to depreciation on the purchase value of abkari licence under Section 32(1)(ii) of the Income-tax Act. The assessee purchased a Bar attached hotel in November 2000 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , counsel for the assessee relied on Division Bench judgment of this court in B. Raveendran Pillai v. CIT [2010] 194 Taxman 477/[2011] 332 ITR 531 wherein this court held that evidence of actual depreciation in the form of erosion in value is not required to be proved to entitle the assessee for eligibility for depreciation which is an allowance under the statutory provision. This court while holding so took into account the scheme of the Act provided under Section 41(2) and Section 50 providing for assessment of profit arising on sale of depreciable assets. In view of the above decision, we cannot uphold the basis on which Tribunal sustained the disallowance. So far as the claim on merits is concerned, counsel for the assessee has relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is entitled to depreciation. For easy reference, we extract hereunder Section 32(1)(i) (ii) of the IT Act. "32(1)(i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998" 4. The question whether an FL-3 licence is covered by Section 32(1)(ii) has to be considered with reference to the provisions in the Abkari laws. Admittedly, Rule 19(i) (ii) of the Foreign Liquor Rules which provides for transfer of licence is as follows:- "19.(i) under no circumstances shall any licence obtained under this notification be sold, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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