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TMI Blog2018 (6) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... per the agreement and as such depreciation of 25% is admissible." 2. Today before us assessee preferred appeal for AYs 2007-08 and 2008-09 on identical grounds of appeal. For the sake of convenience, grounds of appeal for A.Y. 2007-08 are reproduced hereinabove and facts relating to A.Y. 2007-08 are being dealt with as under. 3. Return declaring income of Rs. 4,92,63,05,249/- was filed on 30.10.2007. The original assessment was completed u/s 143 (3) of the Act on income of Rs. 8,38,00,90,942/-on 16.12.2009. The Assessee is a Government of India Undertaking working under the administrative control of Ministry of Railways. It is engaged in the business of handling and transportation of containerized cargo. Its operating activities are mainly carried out at its Inland Container Depots (ICDs), Container Freight Stations (CFS) and Port Side Container Terminals (PSCTS) spread all over the country. Its wagons are running on Indian Railways System for carriage of container traffic. 3.1. Assessee had claimed depreciation on intangible assets of licence for the years under consideration which was granted to assessee for running container trains on Indian Railways Network for twenty years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that an identical issue arose for A.Y. 2008-09 in ITA No.1876/2012 wherein the issue was decided as under. "14. We have carefully considered the rival contentions. In the present case undisputedly the assessee has paid Rs. 50 crores to the Ministry of Railway as non refundable registration fee for 20 years towards license for running container trains on Indian Railways facilities in terms of policy statement dated 09.01.2006. According to that policy it was permitted to move various operators container trains on Indian Railways. The registration fee of applicants who are not eligible would be refundable without interest. No such refund has been received by the assessee and therefore, it is apparent that appellant has been granted that new license. According to that license , it is flexible permission to run trains between any pairs of trains to any points in the entire country and there will be no limit on number of trains on any of the routes. The above permission was valid for a period of 20 years and further extendable by 10 years. Such permission is transferable from one operator to another operator subject to rules and conditions. On reading of the above policy doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation in terms of section 32(1)(ii) of the Act was not, in law, available on goodwill. The Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal approved the reasoning of the Assessing Officer thereby holding disallowance of depreciation on the amount described as goodwill. It was thus argued on behalf of the assessee-company that section 32(1)(ii) would mean rights similar in nature as the specified assets, viz., intangible, valuable and capable of being transferred and that such assets were eligible for depreciation. On behalf of the respondent it was argued that applying the doctrine of noscitur sociis the expression "any other business or commercial rights of similar nature" used in Explanation 3(b) to section 32(1) has to take colour from the preceding words "know-how, patents, copyrights, trade marks, licences, franchises". It was urged that the Supreme Court had clearly held in Techno Shares and Stocks Ltd. [2010] 327 ITR 323 (SC) that "Our judgment should not be understood to mean that every business or commercial right would constitute a "licence" or a "franchise" in terms of section 32(1)(ii) of the 1961 Act". 13. In the present case, apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... station period whereas by acquiring the aforesaid business rights along with the tangible assets, the assessee got an up and running business. This view is fortified by the ratio of the decision of the Supreme Court in Techno Shares and Stocks Ltd. [2010] 327 ITR 323 (SC) wherein it was held that intangible assets owned by the assessee and used for the business purpose which enables the assessee to access the market and has an economic and money value is a "licence" or "akin to a licence" which is one of the items falling in section 32(1)(ii) of the Act. 14. In view of the above discussion, we are of the view that the specified intangible assets acquired under slump sale agreement were in the nature of "business or commercial rights of similar nature" specified in section 32(1)(ii) of the Act and were accordingly eligible for depreciation under that section." 15. As Assessee has earned a benefit of enduring nature of plying on Indian Railway tracks for a period of 20 years , we do not have any hesitation to hold that it is a capital asset in the form of right to operate. It is a valuable commercial right available to the assessee for a considerable long period therefore, followi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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