TaxTMI 
TaxTMI 
2011 (6) TMI 866
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....received certificate of registration to act as Portfolio Manager under the SEBI(Portfolio Managers) Regulations 1993 w.e.f. 16/9/05. 3. On perusal of depreciation chart filed as Annexure to Tax Audit Report in Form No.3CD, the AO noticed that the assessee had claimed depreciation on intangible assets @ 25%. It was further stated by way of note that, the intangible assets comprised of Pre-operative expenses of Rs. 77,58,599/- and SEBI Registration fee of Rs. 25,00,000/-. According to the Assessee, the expenditure incurred in securing registration from SEBI by paying registration fee of Rs. 25,00,000/- was an intangible asset on which the Assessee can claim depreciation u/s.32(1)(ii) of the Act. Further the expenditure incurred prior to ob....
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....epreciation claimed @ 25% for assessment year 2003-04 (relevant to previous year ended Marchg, 2003) (-)25,64,650 WDV as on April 1, 2003 76,93,949 Less: Depreciation claimed @ 25% for Assessment Year 2004-05 (relevant to previous year ended March 31,2004) (-)19,23,487 WDV as on April 1, 2004 57,70,462 The assessee pointed out to the AO that it had commenced its business on April 2, 2002 and that the above mentioned expenses were incurred prior to commencement of the business of the assessee. It was further clarified that the Assessee was a company incorporated as a private company with the main object of carrying on the busines....
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....is an "Intangible Asset" on which depreciation u/s. 32 is allowable viz., a) Techno Shares and Stock Limited vs. ITO (101 TTJ 349)(bom); M/s. Kaynet Capital Ltd. vs. DCIT (ITA No.3870/M/05)(Mum) 4. The AO however was of the view that an amount of Rs. 77,58,599/- was incurred prior to the commencement of business mainly on account of rent & utilities, salaries, administration, etc. According to the AO, the intangible asset contemplated by section 32(1)(ii) should be in the nature of know-how, patent, copyrights, trade marks, licences, commercial rights etc. and the same should have been "acquired" by the assessee on or after 1/4/1998. According to the AO by no stretch of imagination can the expenses like rent & utilities, salaries, admini....
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....ssessee before the Tribunal that depreciation should be allowed treating the SEBI Registration fee as intangible asset or in the alternative the same should be allowed as deduction under section 37(1) of the Act. Further it was submitted that the pre-operative expenses incurred in connection with obtaining registration of the mutual fund from SEBI should be capitalized and treated as part of the block of assets "intangible assets" and depreciation allowed on the same. The learned D.R. relied on the order of the Revenue authorities. 8. We have heard the rival submissions. It is seen from Page No.63 of the assessee's paper book that in A.Y 2003-04 the assessee had claimed depreciation of Rs. 25,64,650/- as allowable as per the provisions o....
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.... (6) of section 43; Explanation 3.--For the purposes of this sub-section, the expressions "assets" and "block of assets" shall mean-- (a) tangible assets, being buildings, machinery, plant or furniture ; (b) intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature. Sec.43(6)( c) of the Act defines written down value and it reads as follows: "43. Definitions of certain terms relevant to income from profits and gains of business or profession.--In section 28 to 41 and in this section, unless the context otherwise requires- (6) "written down value" means-- (a) (b) (c) in ....