Intangible assets classification affects depreciation eligibility under Income Tax law for commercial rights and concession agreements and licensing arrangements. The definition of Assets for depreciation under section 32(1)(ii) separates tangible (buildings, machinery, plant, furniture) and intangible assets (know how, patents, copyrights, trademarks, licences, franchises or other business or commercial rights of similar nature). The phrase 'business or commercial rights of similar nature' is to be construed by nocitur a sociis with the listed categories, restricting depreciation to rights analogous to those categories. Rights under concession agreements were found not to be depreciable intangible assets where they do not fall within that genus, while brand names and comparable commercial rights may qualify when they function as tools of trade.
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Intangible assets classification affects depreciation eligibility under Income Tax law for commercial rights and concession agreements and licensing arrangements.
The definition of Assets for depreciation under section 32(1)(ii) separates tangible (buildings, machinery, plant, furniture) and intangible assets (know how, patents, copyrights, trademarks, licences, franchises or other business or commercial rights of similar nature). The phrase "business or commercial rights of similar nature" is to be construed by nocitur a sociis with the listed categories, restricting depreciation to rights analogous to those categories. Rights under concession agreements were found not to be depreciable intangible assets where they do not fall within that genus, while brand names and comparable commercial rights may qualify when they function as tools of trade.
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