Depreciation on brand names and a commissioned plant was sustained under Section 32(1)(ii) as depreciable intangible assets.

Depreciation was discussed in two contexts: a chemical recovery plant and brand names used in paper manufacturing. The plant depreciation was upheld because the record, including remand verification of excise entries, invoices and gate passes, supported the finding that it was put to use from 21.03.2008. Brand names were treated as trademarks and similar commercial rights within Section 32(1)(ii) read with Explanation 3(b), so they qualified as depreciable intangible assets. The article notes that the appellate challenge failed on both issues and that no substantial question of law arose.

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Issues: (i) Whether depreciation on the chemical recovery plant was rightly allowed on the basis that the plant had been put to use from 21.03.2008; (ii) Whether brand names used in the assessee's paper manufacturing business are intangible assets within Section 32(1)(ii) of the Income-tax Act, 1961 and thus eligible for depreciation.

Issue (i): Whether depreciation on the chemical recovery plant was rightly allowed on the basis that the plant had been put to use from 21.03.2008.

Analysis: The additional material supporting commissioning and use of the plant was admitted at the appellate stage, and the Assessing Officer was given an opportunity to examine it through a remand report. The remand proceedings specifically verified the excise records, Cenvat credit entries, original invoices, and inward gate passes, and no adverse finding was recorded on merits. The appellate finding that the plant had commenced production on 21.03.2008 was therefore supported by the record.

Conclusion: The depreciation claim on the chemical recovery plant was correctly allowed in favour of the assessee.

Issue (ii): Whether brand names used in the assessee's paper manufacturing business are intangible assets within Section 32(1)(ii) of the Income-tax Act, 1961 and thus eligible for depreciation.

Analysis: Section 32(1)(ii) read with Explanation 3(b) covers trademarks and other similar commercial rights as intangible assets. A brand name is a species of trademark, and the definition of "mark" under the Trade Marks Act, 1999 includes a brand. Applying this statutory scheme, brand names confer commercial rights of a kind contemplated by the depreciation provision.

Conclusion: Brand names fall within the scope of intangible assets under Section 32(1)(ii), and depreciation was rightly allowed in favour of the assessee.

Final Conclusion: No substantial question of law arose, and the appellate challenge failed on both issues.

Ratio Decidendi: Where a brand name answers to the statutory concept of a trademark and confers commercial rights of similar nature, it is a depreciable intangible asset under Section 32(1)(ii); and appellate admission of additional evidence is sustainable where the Assessing Officer is afforded examination through remand proceedings.

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