TaxTMI 
TaxTMI 
2016 (4) TMI 587
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....m 7th September 2006, with all its assets and liabilities, benefits and obligations, employees and customers, as a going concern. One of the assets which was transferred to the assessee as such was trademark which was assigned a value of Rs. 2,00,00,000 in this agreement. The assessee claimed depreciation of Rs. 50 lakhs on the asset so acquired. During the course of scrutiny assessment proceedings, the Assessing Officer noted that the assessee is not yet registered owner of the trademark and was not therefore eligible for claim of depreciation. The Assessing Officer was further of the opinion that since the assessee is not a registered owner of the trademark, he is not entitled to the use of the trademark, nor can the assessee bar any other person from using the same trademark. He further noted that in terms of section 28 (1) of the Trade Marks Act, 1999 it is only on it's registration that the proprietor of the trademark gets the exclusive right to use the trademark and to obtain relief in respect of infringement of the trademark. It was in the backdrop of these observations that the Assessing Officer declined the claim of depreciation in respect of trademark by observing, inter ....
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.... furnished in accurate particulars of income penalty proceeding u/s. 271(1)(c) is being initiated separately." 3. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success. Learned CIT(A) upheld the order by observing as follows: "I have carefully considered the assessment order and the submission filed by the appellant. The appellant has purchased the business of M/s. Alps Technologies Pvt. Ltd. including its assets and liabilities, benefits and obligations, employees etc. as a ongoing concern. The total value of the slump say was Rs. 7.25 crores out of which Rs. 2 crores were provided for trademark. The appellant has claimed that the depreciation on the trade mark subsequently transferred in his name should be allowed to him as the business was taken over by him on 07/09/2006, income earned after such takeover has been declared in the return of income, the application was made for registration of trade mark in its name on 27/08/2009 and the books of the account of the appellant showed the trade mark as intangible assets. The claim of the appellant that the trade mark has been shown in the books of account and the business was taken ove....
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....claim of depreciation on the trade mark by the A. O. is upheld and the ground of appeal is dismissed." 4. The assessee is not satisfied and is in further appeal before us. 5. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 6. We have noted that the underlying assumption in the approach of the authorities below is that unless a trademark is a registered trademark, it cannot be considered to be an asset worth any value so as to entitle assessee to claim the depreciation in respect of the same. This assumption is, however, clearly fallacious. Hon'ble Supreme Court, in the case of Cadila Health Care Limited Vs. Cadila Pharmaceuticals Limited [(2001) 5 SCC 73] observed as follows:- Under Section 28 of the Trade and Merchandise Marks Act on the registration of a trade mark in Part-A or B of the register, a registered proprietor gets an exclusive right to use the trade mark in relation to the goods in respect of which trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by the Act. In the case of un-registered trade mar....
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....NDIA) LTD., having its Registered Office at 404, Shivam Complex, Bhuyangdev Cross Road, Sola Road, Ghatlodia, Ahmedabad - 380 061, Gujarat State, India by virtue of the Deed Of Assignment Dated 31st day of Aug 2007. Accordingly, all rights stated therein such as Trade Mark, Copyright and goodwill and/or other Intellectual Properties now belong to M/s. TRIO ELEVATORS COMPANY (INDIA) LTD., having its Registered Office at 404, Shivam Complex, Bhuyangdev Cross Road, Sola Road, Ghatlodia, Ahmedabad-380 061, Gujarat State, India. 3. I say that I have no objection if the Rights of the Trade Mark in respect of the above said application is transferred in the name of M/s. TRIO ELEVATORS COMPANY (INDIA) LTD., having its Registered Office at 404, Shivam Complex, Bhuyangdev Cross Road, Sola Road, Ghatlodia, Ahmedabad-380 061, Gujarat State, India 4. I submit that the above application is made for change in the name of the Registered Proprietor. I also state that no litigation in respect of the said subject matter of trademark is pending in any Court or Tribunal. 5. This Affidavit is therefore sworn to carryout necessary changes in the name of Registered Proprietor on record with the T....