Treatment of farm in expenditure as intangible asset allows depreciation after deducting the tangible asset component for tax purposes. The amount paid for acquiring a Participating Interest (PI) in an E&P contract approved by the Government of India represents payment to acquire underlying rights, licences and obligations, not a partnership share; after reducing the component attributable to tangible assets, the residual amount shall be treated as an intangible asset (a business or commercial right akin to a licence) and is eligible for claim of depreciation under clause (ii) of sub section (1) of section 32 of the Income tax Act.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Treatment of farm in expenditure as intangible asset allows depreciation after deducting the tangible asset component for tax purposes.
The amount paid for acquiring a Participating Interest (PI) in an E&P contract approved by the Government of India represents payment to acquire underlying rights, licences and obligations, not a partnership share; after reducing the component attributable to tangible assets, the residual amount shall be treated as an intangible asset (a business or commercial right akin to a licence) and is eligible for claim of depreciation under clause (ii) of sub section (1) of section 32 of the Income tax Act.
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