Restricted meaning of intangible assets under depreciation law excludes stock exchange membership cards from eligible business rights.

Section 32(1)(ii) was read as allowing depreciation only for specified intangible assets within a restricted class. Applying noscitur a sociis, "licences" was confined to permissions linked to intellectual property rights, and the residual phrase "any other business or commercial rights of similar nature" was limited to rights akin to know-how, patents, copyrights, trade marks and franchises. A stock exchange membership card was therefore not treated as an eligible intangible asset, and depreciation was not allowable on that card.

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Issues: Whether depreciation under section 32(1)(ii) of the Income-tax Act, 1961 is allowable on a stock exchange membership card acquired on or after 1 April 1998 as a "licence" or as a "business or commercial right of similar nature".

Analysis: The amended provision extends depreciation to specified intangible assets only, and the listed items form a restricted class. The expression "licences" appears in a group of intangible assets closely associated with intellectual property rights, namely know-how, patents, copyrights, trade marks and franchises. Applying the principle of noscitur a sociis, the expression "licences" was held to bear a restricted meaning confined to licences relatable to acquisition or use of intellectual property rights, not to all permissions or regulatory privileges. The further phrase "any other business or commercial rights of similar nature" was read as limiting the scope to rights akin to the specified categories. A stock exchange membership card was therefore not treated as falling within the contemplated class of intangible assets.

Conclusion: Depreciation was held not allowable on the stock exchange membership card, and the question was answered in favour of the Revenue and against the assessee.

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