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TMI Blog2014 (1) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... – Thus, the assessee is entitled for depreciation on the distribution rights ie marketing network – Decided against Revenue and in favour of Assessee. Allowability of Depreciation on Trademark rights and Intangible asset – Held that:- Following B. Raveendran Pillai vs. CIT [2010 (9) TMI 434 - Kerala High Court] - Payment made towards goodwill for ensuring retention and continued business in the hospital acquired by assessee on going concern basis is comparable with trademark, franchise, copyright etc referred to in sub-clause (ii) of section 32(1) entitling the assessee for depreciation – Decided against Revenue and in favour of Assessee. Allowability of deduction – Held that:- Following Balmukund Acharya Vs Deputy Commissioner of Income-tax [2008 (12) TMI 88 - BOMBAY HIGH COURT] - only real income should be taxed and the AO should allow the deduction permissible under the law – matter remitted back to the AO for fresh adjudication – Decided partly in favour of Revenue. - ITA No.6806,6807/M/2011 - - - Dated:- 3-4-2013 - D Karunakara Rao and Vivek Varma, JJ. For the Appellants : Shri Sunil M Lala Mr Varun Sankhesara For the Respondent : Shri A P Singh, CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. In support of the same, Ld Counsel mentioned that these issues are decided by the Coordinate Bench of this Tribunal in the case of M/s. Jyoti (India) Metal Industries Pvt. Ltd., vs. ACIT vide ITA No.181/M/2008 (AY:2004-05); Hon ble Kerala High Court judgment in the case of B. Raveendran Pillai vs. CIT [2011] 332 ITR 531 and the Hon ble Delhi High Court judgment in the case of Areva T D India Ltd. Ors vs. DCIT Ors [2012] 70 DTR (Del) 233. In this regard, we have perused the decision of this Tribunal in the case of M/s. Jyoti (India) Metal Industries Pvt. Ltd., vs. ACIT (supra) and find that the distribution rights, which is in the nature of marketing network are eligible for depreciation being a intangible asset eligible for depreciation u/s 32(1) of the Act. Para 7 8 of the said Tribunal s order is relevant in this regard and the same read as under: 7. We have heard both the parties and perused the orders of the Revenue as well as the documents filed before us including the case laws. On perusal, we find that the decision in the case of Weizmann Forex Ltd. vs. DCIT (supra) was decided in the context of distribution network relating to the money transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avail the infrastructure of the networking. By this acquisition, assessee gets the rights to have access with the marketing network consisting of representative, having infrastructure, customer lists, marketing strategies etc. It is a settled issue that the meaning of business or commercial rights of similar nature mentioned in section 32 of the Act has to be understood in the context of purpose of such rights obtained as for effectively carrying on the business and commerce. We find that the said decision was taken after considering the decision of the Tribunal, Mumbai Bench in the case of Skyline Caterers (P) Ltd. vs. ITO (2008) 20 SOT 266 (Mum) (SMC) and other reported decisions in the cases of CIT vs. Hindustan Coca Cola Beverages (P) Ltd (2011) 331 ITR 192 and CIT vs. Elecon Engg. Co. Ltd (1974) 96 ITR 672, which was subsequently upheld by the Hon ble Supreme Court in 166 ITR 66 for the proposition that diminution in value of the asset is not a relevant factor for allowing the depreciation u/s 32 of the Act. Thus, the facts of the instant case of the assessee are comparable to the case of Weizmann Forex Ltd (supra). In the present case also assessee acquired the marketing net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-09 and the grounds raised in this appeal read as under: 1. On the facts and in the circumstances of the case and in law, the CIT (A) erred in directing the AO to grant depreciation of Rs. 29,03,90,427/- on goodwill. 2. On the facts and in the circumstances of the case and in law, the CIT (A) erred in not appreciating the ratio of the judgment of the Mumbai ITAT s decision in the case of R.G. Keshwani vs. ACIT (2009) 120 TTJ 1081, wherein it is held that goodwill is not an intangible asset within the meaning of section 32(1)(ii) and accordingly not entitled for depreciation. 3. On the facts and in the circumstances of the case and in law, the CIT (A) erred in directing the AO to allow the claim of deduction of Rs. 63,00,000/- on the account of provision for expected sales return, though the same was not claimed in the return of income and was therefore not allowable in terms of the ratio of the judgment of the Hon ble Apex Court in the case of Goetze (India) vs. CIT (2006) 284 ITR 323, wherein it is held that a fresh claim before the Assessing Officer can be made only by filing a revised return, not otherwise. 4. On the facts and in the circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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