Assessee developed intangible assets by incurring expenditure...

Assessee developed intangible assets by incurring expenditure and valued them based on historical cost as per Accounting Standard (AS)-26, which prescribes cost basis for internally generated intangible assets. Commissioner of Income Tax (CIT) erroneously believed assessee did not follow AS-26 and valuation method was incorrect. Tribunal held assessee's valuation method complied with AS-26, CIT's assumption of jurisdiction u/s 263 was flawed and based on incorrect understanding of AS-26. Regarding depreciation, expenses incurred for intangible assets were genuine business expenses. Disallowing depreciation would result in allowing expenses u/s 37(1), benefiting assessee. CIT did not address assessee's contentions properly. Tribunal set aside CIT's revisionary order as unsustainable in law.