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TMI Blog2016 (4) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation on the trademark. - Decided in favour of assessee. - I.T.A. No.2477/Ahd/2011 - - - Dated:- 8-3-2016 - Pramod Kumar AM and S S Godara JM For The Appellant : Saurabh N Soparkar For The Respondent : A K Pandey ORDER Per Pramod Kumar, AM: 1. This appeal is directed against the order dated 27th July, 2011, passed by the learned CIT(A), in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2007-08. The short issue that we are required to adjudicate in this appeal is whether or not the learned CIT(A) was justified in confirming the disallowance of depreciation of ₹ 50,00,000 on acquisition of trade mark during the year . 2. The issue in appeal lies in a rather narrow compass of material facts. The assessee before us is a company incorporated on 10th August, 2006. Pursuant to slump sale agreement dated 31. 08. 2007 with Alps Technologies Pvt. Ltd., the assessee company had purchased the business of selling, installation, commissioning and repairs and maintenance of elevators with effect from 7th September 2006, with all its assets and liabilities, benefits and obligations, employees and customers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s already been discussed in the preceding para there cannot be two owners of the same property having the same rights. As per the Trade Marks Act it is only upon the registration of the Trade Marks that the proprietor gets an exclusive right to the use of Trade Mark, to exclusion of others. It is also only upon registration of the Trademark that the proprietor can obtain relief as and when the Trade mark has been infringed upon. These characteristics are sine qua non for ownership over any property. 4.2 In view of the facts and circumstance of the case, the Trade Marks Act, 1999 and the above discussion, the assessee cannot be held to be the owner of the Trade Mark under any law in force. The assessee therefore cannot be termed as the owner of the Trade Mark upon which it has claimed deprecation as per section 32 of the I.T. Act. 4.3 On the basis of the above facts and circumstances it is held that the assessee is not the owner of the Trade Mark and so is not entitled to its claim of depreciation. The depreciation claimed by the assessee is therefore disallowed. As the assessee has furnished in accurate particulars of income penalty proceeding u/s. 271(1)(c) is being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned. It appears that the trade mark has been transferred later somewhere around in the month of March, 2010 as the letter from the Deputy Registrar of Trade Mark allowing the transfer of trade mark shows the date of 16/03/2010. The observation made by the A. O. that as per the trade mark, if someone is not registered user of the trade mark, he will not be entitled to use it is also relevant. As the trade mark was not transferred in the name of the appellant he could not use it, and therefore, he has not been able to furnish any evidence regarding use of the trade mark. I have also perused the judicial pronouncement relied upon by the appellant. The same are not applicable in the case of the appellant as the judgments indicates the basic test of use by the owner. The depreciation will be allowable if the person was a beneficial owner which means he could establish before the authority that he was actually using it and had the control over the same. In the case of the appellant, the appellant has not been able to establish the same. Considering the above mentioned facts and circumstances, the disallowance of claim of depreciation on the trade mark by the A. O. is uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id, therefore, have the rights to use the trademark as these rights were assigned to the assessee by the person who had these legal rights. The registered owner of the trademark, while initiating the process for registration of trademark in the name of the assessee company, has given an affidavit which states as follows: I, Chirag S. Patel, An Indian National, Aged 32 Years, being the Managing Director of M/s. M/S. ALPS TECHNOLOGIES PVT. LTD., (FORMERLY KNOWN AS M/S. TRIO ELEVATORS PVT. LTD.,) having its Registered Office at Plot No,824, Nr. Kothari Industrial Estate, PO Santej, Taluka-Kalol, Dist: Gandhinagar, Gujarat State, India, do hereby solemnly affirm as under. 1. I say and submit that, my company is the original adopter and Registered Proprietor of the Trade Mark TRIO which is Registered Under Trade Mark Nos.789945 961083. 2. I say and submit that, my company has assigned the present Trade Mark TRIO to M/s. TRIO ELEVATORS COMPANY (INDIA) LTD. I say and submit that, my company has released all the rights towards Intellectual property such as Trade Mark, Copyright and other goodwill in favour of M/s. TRIO ELEVATORS COMPANY (INDIA) LTD., having its Register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aluable rights which make it an intangible asset eligible for depreciation. In any event, the admissibility of depreciation on trademark is not contingent upon its registration inasmuch as the description of intangible asset in Part B of the deprecation schedule describes the same merely as know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature . The only thing that the assessee did not have right for, as the trademark was not registered in the name of the assessee at that point of time, was the right to obtain relief in respect of infringement of the trade mark in the manner provided by the Act, but then this limitation of right was only transitory as the process of transfer of trademark was already initiated. 9. We have noted that the learned CIT(A) has raised an issue about the trademark not being actually used by the assessee. It is difficult to understand, much less approve, his inference. When the business is transferred on a going concern basis and the trademark is an integral part of the business transferred, and the assessee has carried on the business as such, there is no reason to even suspect, muc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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