TMI Blog2015 (5) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent : Shri Hormuzd Jamshedji ORDER Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 27/07/2010 of the ld. First Appellate Authority, Mumbai, deleting the penalty of ₹ 10,72,500/-, imposed u/s 271(1)(c) of the Act. 2. At the time of hearing, Shri Vivek Batra, ld. DR, advanced his arguments which are identical to the ground raised by submitting that the assessee furnished inaccurate particulars of his income by claiming deduction on the basis of incorrect facts, therefore, the penalty was rightly levied by the Assessing Officer. Plea was also raised that the ld. Commissioner of Income Tax (Appeals) deleted the penalty ignoring the factual matrix. On the other hand, the ld. counsel for the assessee, Shri Hormuzd Jamshedji, defended the conclusion arrived at in the impugned order by submitting that neither there is concealment of income nor furnished inaccurate particular of such income. It was also pleaded that the impugned issue is covered in favour of the assessee in his own case for AY 2006-07 and 2007-08 (ITA no.4564/Mum/2009 and 7464/Mum/2010) order dated 26/02/2015. This factual matrix was not controverte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets. Further, the CIT(A) after giving a thoughtful consideration to the facts of the case allowed depreciation at the rate applicable to the buildings. However, the CIT(A) allowed the claim of depreciation @10% on and from A.Y. 2007-08. 4. Aggrieved by this finding of the CIT(A) both the revenue and the assessee are in appeal. The grievance of the revenue is that the CIT(A) ought not to have allowed depreciation @10%. The assessee's grievance is twofold. Firstly, it is the claim of the assessee that tenancy right should be treated as intangible asset and depreciation @25% should be allowed. Secondly, in alternative, the CIT(A) erred in not allowing depreciation @1O% on and from A.Y. 2006-07. In so far as the first claim of the assessee that tenancy right is akin to intangible asset therefore [depreciation @25% should be allowed is concerned, it has been decided by the Tribunal in favour of the revenue and against the assessee in the case of Dabur India Limited in ITA No. 4679jMum/2012 for A.Y. 2009-10, vide order dated 23.08.2013 While dismissing the claim of the assessee, the Tribunal at para 4 of Its order held as under: Shri Burgis Keki Daruwalla 5 4. We are not convi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hises etc. can be brought within the ambit of any other business or commercial right . The legislature has made its intention crystal clear by the use of words of similar nature immediately after the words any other business or commercial rights . This makes the position beyond any pale of doubt that any other business or commercial rights would only be such which are of the nature of know-how, patents, copyrights, trademarks, licences, franchises etc. As noticed supra, there is a vast different between know-how, patents, copyrights, trademark, licences, franchises etc. on one hand and tenancy rights on the other, we are of the considered opinion that tenancy rights cannot be construed as intangible assets falling within the meaning of Explanation 3 to section 32(1). The reliance of the Id. DR on the judgment of the Hon'ble Supreme Court in Techno Shares (supra) is of no consequence. In that case the question was whether depreciation can be granted on the Bombay Stock Exchange Membership card. As the ownership of such Membership Card is sine qua non to conduct the business on the floor of stock exchange, the Hon'ble Supreme Court held it to be an intangible asset el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tenancy rights of the Prospective Tenants in respect of the said premises. Shri Burgis Keki Daruwalla 8 c) The Landlords are also not allowed to terminate the lease agreement for any reason except for the non payment of monthly rent for a continuous period of six months. The relevant para of the said agreement reads as under (Pg. 17 of the comp.): 10. The Prospective Landlords shall not be entitled to terminate the tenancy of the Prospective Tenants under this agreement for any reason whatsoever save and except for non- payment of the reserved monthly rent for a continuous period of not less than six months and that too after giving the Prospective Tenants notice, in writing of not less than two calendar months calling upon the Prospective Tenants to make payments of the rent in arrears, d) On going through the above para, it is clear that the appellant has full dominion over the property and the lease in perpetuity is irrevocable. While allowing the claim of depreciation at the rates applicable to a building, the CIT(A) has considered the decision of the Honble Supreme Court in the case of Mysore Minerals Ltd, 239 ITR 775 and the decision of the Hon'ble Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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