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TMI Blog2012 (7) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... ins tax only with effect from AY 2002-03 onwards in this case AY is 1999-2000 and therefore, the amendment would not have any effect - in favour of assessee. - ITA No.5615 of 2010 - - - Dated:- 12-6-2012 - S J Vazifdar and M S Sanklecha, JJ. For Appellant: Mr Suresh Kumar For Respondents: Mr K B Bhujle Mr Padmanabh Bhujle ORDER Per: M S Sanklecha: This is an appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the said Act ) challenging the order dated 6/7/2009 passed by Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal). 2) In this appeal, the Revenue has formulated the following questions as substantial questions of law: a) Whether on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the transfer took place prior to 1/4/2002? 4. The appeal is admitted on the aforesaid reframed question of law. However, at the request of the Advocates for the appellant and the Advocate for the respondent, the appeal itself is taken up for final disposal. 5. Briefly, the facts leading to the present appeal are as under: a) The respondent-assessee was the owner of trade mark Colin . On 21/10/1998 the respondent-assessee under an agreement sold to M/s. Reckitt Colman ltd. the following rights: i) Transfer of ownership and assignment of the trade mark. Rs.1500 lakhs ii) Transfer of ownership in the goodwill of the relating to the trade mark Rs. 50 lakhs iii) Transfer of ownership a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its costs was Nil. In view thereof it was not possible to compute the capital gains under Section 48 of the said Act resulting in the charge of tax also failing as held by the Apex Court in the matter of B. C. Srinivasa Shetty (supra). Further, the Tribunal also held that the trade mark became chargeable to tax with effect from 1/4/2002 by virtue of amendment to Section-55(2)(a) of the said Act with effect from 1/4/2002. However, the aforesaid amendment according to the Tribunal was only prospective. f) Being aggrieved by the order of the Tribunal dated 6/7/2009 the revenue-appellant is in appeal before this Court. 6. In support of the appeal Mr. Suresh Kumar, Advocate for the Appellant submits that the sale of trademark and designs wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sign by the respondent-assessee is not subject to capital gains tax as the cost of acquisition of self generated designs have not been defraud under Section- 55 of the said Act even today. 8. We have considered the rival submissions. Section 45 of the Act is a charging section for the purpose of levying capital gains. However to impose the charge, parliament has enacted provision to compute profits or gains under that head. Section 48 of the said Act provides the manner in which the income chargeable under the head capital gains is to be computed i.e. by deducting costs of acquisition of the capital asset from the full consideration received on the transfer of the capital asset. The Supreme Court in the matter of B. C. Srinivasa Shetty (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of certain intangible capital asserts under section 55 42.1 Under the existing provisions of subsection (2) of section 55 of the Income tax Act, the cost of acquisition of an intangible capital asset, being goodwill of a business or a right to manufacture, produce or process any article or thing, tenancy rights, stage carriage permits or loom hours, is the purchase price in case the asset is purchased by the assessee from a previous owner, and nil in any other case. It was pointed out that certain similar self generated intangible assets like brand name or a trademark may not be considered to form part of the goodwill of a business and consequently it may not be possible to compute capital gains arising from the transfer of such assets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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