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TMI Blog2018 (7) TMI 2071X X X X Extracts X X X X X X X X Extracts X X X X ..... as relied upon the decision of M/s.Areva T D India Ltd.[ 2012 (4) TMI 79 - DELHI HIGH COURT] Assessee is entitled to the depreciation on the intangible asset viz., goodwill/customer list as claimed by him - Our view is also on account of the fact that Sec.92B in respect of international transactions under the Explanation thereto has provided that the expression intangible property would include under clause-(f) customer related intangible assets such as customer list, customer contacts , thus, the legislature in its wisdom in respect of the international transactions provided for the expression intangible property to include intangible assets such as customer list in Sec.92B then an interpretation difference from the same cannot be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r list / goodwill in its books of accounts in accordance with recognition criteria laid down for intangibles in Accounting Standard 26 on Intangible Assets (AS - 26) issued by the Institute of Chartered Accountants of India. However, from an income tax perspective, it has claimed depreciation on customer lists and Goodwill under the block Intangible assets at the rate of 25% as specified in the Act. Further, Explanation 3 to section 32(1) of the Act defines intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature.Therefore, payments for any business or commercial rights would fall under the definition of Intangible Assets. The assessee also has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a submission that during the AY 2009-10, the assessee had with the objective of expanding its business, had acquired the businesses of 7 other companies under Business Transfer Agreements (BTA). The assessee company had capitalized the payments in respect of the payment for the goodwill/customer list and the assessee had claimed depreciation on the same. It was a submission that for the AY 2009-10, the assessee had claimed the depreciation and the return filed by the assessee had been accepted and there was no scrutiny assessment on the same. It was a submission that for the AY 2011-12 being the AY under dispute, the AO had denied the assessee s claim of depreciation. For the AY 2010-11 the assessment have been re-opened and was pending. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tangible assets, in view of the provisions of Sec.32, the assessee was entitled to the claim of depreciation. 4. In reply, the Ld.DR vehemently supported the order of the Ld.CIT(A) the AO. It was a submission that Sec.92B was in relation to international transactions and Sec.32 did not include customer list or non-compete fee. 5. We have considered the rival submissions. A perusal of the provisions of Sec.32(1) Explanation-3 shows that the expression asset meant to include intangible assets being knowhow, patents, copyrights, trademarks .. any other business or commercial rights of similar nature. A perusal of the decision of the Hon ble Madras High Court in the case of M/s.Pentasoft Technologies Ltd., shows that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible assets such as customer list, customer contacts, . , thus, the legislature in its wisdom in respect of the international transactions provided for the expression intangible property to include intangible assets such as customer list in Sec.92B then an interpretation difference from the same cannot be taken that under the same applicable act and that too to the detriment of local business and citizens. In these circumstances, we are of the view that the assessee is entitled to the claim of depreciation on the intangible assets, being the goodwill/customer list, as claimed by the assessee. In the result, Ground Nos.2 to 2.5 of the assessee s appeal stand allowed. The other grounds have not been pressed by the assessee and consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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