TaxTMI 
TaxTMI 
2023 (9) TMI 616
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.... 6. Via this appeal, the appellant/revenue seeks to assail the order dated 11.05.2017, passed by the Income Tax Appellate Tribunal [in short, "Tribunal"]. 7. Insofar as this appeal is concerned, the following two issues arise for consideration: (i) Whether the respondent/assessee has rightly claimed depreciation amounting to Rs.7,44,36,019/- concerning the chemical recovery plant? (ii) Whether the claim for depreciation on the brands used by the respondent/assessee, concerning its paper manufacturing business, were intangible assets within the meaning of Section 32(1)(ii) of the Income Tax Act, 1961 [in short, "Act"] and hence, amenable to the claim of depreciation? 8. Insofar as the first issue is concerned, the entire controversy veers around one single aspect i.e., whether or not the respondent/assessee has commenced the use of the chemical recovery plant as of 21.03.2008. Qua this aspect, the Assessing Officer (AO) has held against the respondent/assessee, which triggered the respondent/assessee"s appeal before the Commissioner of Income Tax-Appeals [in short, "CIT(A)"]. 9. While the appeal was in progress before the CIT(A), the respondent/assessee filed certain addit....
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....copy of the reports I certificates dated 30.04.2008 issued by the above Chartered Engineer firm certifying that the said project was commissioned on 21.03.2008 was filed before the AO during the assessment proceeding, copy of which is filed by the appellant as part of the Paper Book. It is further argued by the ld. AR that a copy of the publication regarding status of implementation of the above project as per the Stock Exchange and SEBI guidelines was also submitted before the AO. Further, copy of Board Resolution of the assessee company dated 29.04.2008 stating that the date of commissioning of the Chemical Recovery Plant was 21.03.2008 was also filed before the AO. The assessee has also charged in its book an amount of Rs. 19,98,0901- as depreciation on the above plant for the period of one month as per the Companies Act Copies of all the bills relating to addition to fixed assets including machineries for the above plant were produced before the AO. It is submitted by the ld. AR that the AO's observation that some assets were still under construction I testing stage based on some samples of bills is completely erroneous as the said bills nowhere mentioned that the assets we....
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....ention of Mr Menon is that once the additional evidence is taken out of the equation, the claim of deprecation on the chemical recovery plant cannot be sustained. In support of his plea, Mr Menon relied upon the judgment of the Madras High Court rendered in Narendra Kumar Sakaria vs. Assistant Commissioner of Income-Tax (2018) SCC OnLine Mad 13781. 15. Regarding the other issue, Mr Menon relies upon the AO"s order to contend that since brand name is not referred to in clause (ii) of Sub-section (1) of Section 32 of the Act, the respondent/assessee could not have claimed depreciation qua the same. 16. We have heard the learned counsel for the parties and perused the record. 17. According to us, both the CIT(A) and the Tribunal were correct. The argument raised by Mr Menon that the additional evidence could not have been admitted by the CIT(A) is nothing but a red herring. Clearly, even according to him, the respondent/assessee furnished sufficient cause as to why the additional evidence ought to be admitted. 18. The CIT(A) noted the fact that the AO had flagged the issue concerning depreciation at the fag end of the assessment proceedings, which, in a sense, did not provide eno....
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....ies of YSN Shares and Securities (P) Ltd. were transferred to and vest in the company. In the process goodwill has arisen in the books of the company." It was further explained that excess consideration paid by the assessee over the value of net assets acquired of YSN Shares and Securities (P) Ltd. (amalgamating company) should be considered as goodwill arising on amalgamation. It was claimed that the extra consideration was paid towards the reputation which the amalgamating company was enjoying in order to retain its existing clientele. 7. The assessing officer held that goodwill was not an asset falling under Explanation 3 to Section 32(1) of the Income Tax Act, 1961 ("the Act", for short). 8. We quote hereinbelow Explanation 3 to Section 32(1) of the Act: "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, trademarks, licences, franchises or any other business or commercial rights of similar nature." Explanation 3 states that the expression "asset" shall mean an intangibl....
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....mes are a specie of the trademark. This is evident upon reading the definition of "trademark" and "mark" provided in the allied statute i.e., Trademarks Act, 1999 [in short, "TM Act"]. The relevant provisions are extracted hereafter: "2. Definitions and interpretation. (1) In this Act, unless the context otherwise requires,- xxx xxx xxx "(n)"mark" includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof;" xxx xxx xxx (zb) "trade mark" means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and..." 24. A perusal of the definition would show that the trademark means a mark which is capable of being represented graphically, and is capable of distinguishing the goods or services of one person from those of others, and may include the shape of goods, their packaging, and combination of colours. 25. The expression "mark" which is defined in Section 2(m) of the TM Act, includes, among others,....