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TMI Blog2012 (2) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding that the database price adjustment for the said year and no adverse inferences have been recorded in respect of the same, there could be no good reason for the AO to deviate from the stand of the TPO and substitute his own opinion as to what should be the correct price at which Acquired Business Database should have been purchased. We are of the considered view that the CIT(A) was indeed in error in restricting the value of Acquired Business Database at 3 crores as against 12 crores paid by the assessee. To this extent, we vacate the order of the CIT(A). As per section 32(1)(ii), depreciation is allowable in respect of know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a plant through which the business is carried on by the respondent, without appreciating the facts and circumstances of the case. 2. Without prejudice to above, should have appreciated that in case the same is not considered as an tangible asset i.e. plant, the same would constitute an 'intangible asset' eligible for depreciation under section 32 of the I.T.Act. 3. Without prejudice to ground No.1 to 2, should have appreciated that the amount paid towards acquisition of database is revenue expenditure allowable under section 37(1) of the Act. 4. On the facts and circusmtanes of the case, the CIT(A) erred in confirming the action of the AO in attributing the value to business database at ₹ 3 crores as against the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquired business Data Base Rs.12 crores Net current assets ₹ 5 crores Miscellaneous assets Rs.1.77 crores Balance -Goodwill Rs.8 crores 5. What was termed as 'Acquired Business Database' was a database of customers developed by AEB-India based on its long standing relationship with various travel agencies and corporation, and all other information relating to the customers of the acquired business undertaking. 6. In the course of the assessment proceedings, the Assessing Officer took note of the above facts and opined that "Definitely it is advantageous on the part of the assessee to have this valuable database in it's possession, but so far as payment an exorbitant sum of ₹ 12 crores for this database, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not really press the same. 7. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. 8. We find that it is not in dispute that the transaction between the assessee and American Express Bank, inter alia, including for purchase of Acquired Business Database were subjected to transfer pricing scrutiny and, the Transfer Pricing Officer vide order dated 15.2.2005 has accepted the transaction without making any adjustment to the arms length price. In this view of the matter and as held by Hon'ble Delhi High Court in the case of CIT vs. Oracle India Pvt Ltd (243 CTR 103), when the price fixed is acceptable as arms length price by Transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) was indeed in error in restricting the value of Acquired Business Database at ₹ 3 crores as against ₹ 12 crores paid by the assessee. To this extent, we vacate the order of the CIT(A). We further find that so far as the question about admissibility of depreciation of Acquired Business Database is concerned, this issue is covered in favour of the assessee by the judgment of Hon'ble Delhi High Court in the case of CIT vs. Hindustan Coca Cola Beverages Pvt Ltd (331 ITR 192), wherein, Their Lordships, inter alia, have observed that "It is worth noting, the scope of section 32 has been widened by the Finance (No. 2) Act, 1998 whereby depreciation is now allowed on intangible assets acquired on or after 1st April, 1998. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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