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TMI Blog2018 (8) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sinochem India Company Private Limited relates to Assessment Year 2010-11 and impugns order dated 13th December, 2017 passed by the Income Tax Appellate Tribunal (Tribunal, for short) in ITA No. 3927/Del/2014. 3. Question of law raised relates to the claim for depreciation on intellectual property rights acquired and purchased by the assessee from Monsanto India Limited. 4. During the period relevant to the assessment year, the assessee had made an addition of Rs. 17,88,300/- on account of acquisition of intellectual property rights to the existing assets in the form of intellectual property rights acquired earlier for Rs. 34.37/- crores. 5. The assessee had claimed depreciation of Rs. 3,44,37,935/- on the said block of assets. On bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded in paragraph 3.1, which we would like to reproduce:- "3.1 The assessee in its reply above is incorrect to state that the asset is being used by the assessee. During the year assessee has only purchased finished products from M/s. Monsanto USA in bulk and has sold in India in the convenient packagings. Thus it is evidently clear that assessee has not used its assets towards manufacturing activities. Under these facts & circumstances deprecation claimed on account affixed assets in the category on intellectual property for Rs. 3,44,37,935/- is disallowed and added back to the total income of the assessee." (Addition of Rs. 3,44,37,935/-) (emphasis supplied) Thus, the claim for depreciation was disallowed on the ground that the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment year 2009-10. Business and market intelligence information acquired was put to use in the sales and marketing activities. Section 32 of the Act does not make any distinction between trading business or manufacturing business. As long as the intellectual property rights were used for the purpose of business, condition of Section 32 that the asset should be used for business would be satisfied and met. In the alternative, reference was made to the decision of Delhi High Court in Capital Bus Service Private Limited versus CIT, (1980) 123 ITR 404 that depreciation could be allowed even if the assets are kept ready for actual use the moment the need arises. 9. Aggrieved, the Revenue had preferred an appeal before the Tribunal, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Delhi High Court in case of Capital Bus Services Private Ltd Vs. CIT, wherein it is held that the allowance of depreciation does not depend upon the actual use of the assets but it is sufficient if the asset in question is By the appellant ―ready for actually using, the profit making apparatus the movement a need arises. However, he has held that appellant case is on stronger footing since the business intellectual property rights were in hand with the appellant for manufacturing the products and also the appellant has used it for the trading purposes under the seal of its own by using the brand name of Monsanto. In view of the above facts we do not find any infirmity in the order of the Ld. CIT (A) and none has been point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f intellectual property rights for sales and marketing was not questioned and commented upon in the assessment order. Depreciation was disallowed as the asset had not been put to use for manufacturing activities. This cannot be a ground and reason to hold that the assessee had not "put to use" the intellectual property rights assets in the year in question. Mere purchase of the products, from third party or the fact that assessee was not engaged in manufacturing activity, would not make any difference.
11. In view of the aforesaid position, we are not inclined to issue notice on the application for condonation of delay. Consequently, the said application and as a sequitur the appeal would be treated as dismissed. No costs. X X X X Extracts X X X X X X X X Extracts X X X X
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