2018 (7) TMI 2071

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....ntokil India Private Limited, the assessee, is engaged in the business of providing pest control services. It claimed depreciation on intangible assets @ 25%. While making the assessment for assessment years 2010-11 & 2014-15, the Assessing Officer required the assessee to explain its claim. The assessee submitted that as a long term envisioned strategy, the it wanted to expand its pest management and control service operations . In this regard, it acquired several business entities, which were established players in the same field and entered into several Business Transfer Agreement ('B TA ) to acquire the business of various enterprisers over the years with DPCPL, IIPCL, Pestec, Pestology, Sajan, Titan and Velvin. Based on the BTA, the co....

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....allowed the case. Per contra, the DR supported the orders of the lower authorities. 4. We heard the rival submissions. Since, there is no change in the factual and legal matrix, the relevant portion of the order of the co-ordinate bench in ITA No. 2660/Mds/2016 for assessment year 2011-12 is extracted as under: "3. It was submitted by the Ld.AR that the assessee has raised 5 grounds in its appeal. It was a submission that the assessee was only pressing Ground Nos.2 to 2.5 which was against the action of the Ld.CIT(A) in confirming the disallowance made by the AO in relation to claim of depreciation on intangible asset representing the goodwill/customer list. It was a submission that the assessee is in the business of providing P....

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.... clause in the Business Transfer Agreement, no amount was quantified for the same. It was a further submission that even assuming the amount was non-compete fee still in view of the decision of the Hon'ble Madras High Court in the case of M/s.Pentasoft Technologies Ltd., reported in 264 CTR 187, non-compete fee has been held to be a right as an intangible asset entitled to depreciation u/s.32. It was a further submission that neither the term customer list nor noncompete fee was defined in Sec.32. It was a submission that Sec.92B(2)(ii)(f) however defined intangible asset to include the customer list and sub-clause (g) to include non-compete fee. It was a submission that as the customer list as claimed by the assessee and non-compete fee as....

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.... Ltd., shows that even the customer list has been treated as falling within the expression "business or commercial rights of similar nature" contained in Sec.32(1)(ii) of the Act. For this purpose, the Co-ordinate Bench of this Tribunal has relied upon the decision of the Hon'ble Delhi High Court in the case of M/s.Areva T & D India Ltd., reported in [2012] 20 taxmann.com 29 (Delhi). In these circumstances, we are of the view that the assessee is entitled to the depreciation on the intangible asset viz., goodwill/customer list as claimed by him. Our view is also on account of the fact that Sec.92B in respect of international transactions under the Explanation thereto has provided that the expression intangible property would include under c....