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TMI Blog2021 (3) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... firmity in the order passed by the learned Commissioner (Appeals) by allowing the claim of the assessee. We also note that the facts of the decision of the Hon'ble Supreme Court in Techno Shares and Stock Ltd. [ 2010 (9) TMI 6 - SUPREME COURT ] are distinguishable in nature insofar as the facts of the present issue is concerned. Therefore, the case law relied upon by the Revenue is not applicable to the facts of the present appeal. Accordingly, the order of the learned Commissioner (Appeals) is hereby upheld by dismissing the grounds raised by the Revenue. - ITA No. 4928/Mum./2017 - - - Dated:- 5-3-2021 - S. Rifaur Rahman , Member ( A ) And Ravish Sood , Member ( J ) For the Appellant : Tharian Oommen For the Respondents : Rajeev Waglay ORDER S. Rifaur Rahman , Member ( A ) The present appeal has been filed by the Revenue challenging the order dated 20th April 2017, passed by the learned Commissioner of Income Tax (Appeals)-3, Mumbai, pertaining to the assessment year 2009-10. 2. The sole issue in dispute is with regard to the direction of the learned Commissioner (Appeals) in holding that the assessee is entitled for depreciation under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been added back while at the same time an amount of ₹ 4,29,69,47/- has been deducted from the total income under the head Cost on acquisition of SSCBL . The Assessing Officer disallowed the claim of the assessee after relying on the decision of the Hon'ble Mumbai High Court in the case of CIT Vs. Techno Shares Stocks Ltd. (ITA No. 971/2006 and 218/2007), wherein It has been held that the assets in the nature know-how, trade-marks, franchises, copyrights are in the nature of intellectual property right and the asset in the form of license must be in the nature of intellectual property rights only, to fall within the provisions of section u/s. 32(1)(ii) of the Act. It was held that since the stock exchange membership card was not in the nature of intellectual property rights, the same was not eligible for depreciation. The Assessing Officer after considering the submissions of the assessee and relying upon various judicial pronouncements besides the decision of the Hon'ble Supreme Court in Techno Shares Stocks Ltd. v/s CIT, [2010] 327 ITR 323 wherein it has been held that the asset in the nature of know-how, trade-marks, franchises, copyrights are in the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue expenditure but a capital one. The Authorised representative has invited my attention in the case of M/s. Cosmos Co-operative Bank Ltd. Vs DCII (64 SOT 90) in which it was held that the cost of acquisition was intangible in nature. It was on account of business or commercial rights of similar nature' covered u/s. 32(1)(ii). The relevant portion is reproduced as under:- 14. Therefore, the moot question is as to whether the aforesaid business/commercial advantages, namely, taking over of huge client base, licenses, operational bank branches in different areas, etc. can be considered to fall within the expression business or commercial rights of similar nature contained in section 32(1)(ii) of the Act. In this context, one may refer to the judgement of the Hon'ble Delhi High Court in the case of Areva T D India Ltd. Ors.(supra). In the case before the Hon'ble High Court assessee company acquired the business of the transferor lock, stock and barrel under a slump sale agreement. The amount of consideration paid in excess of the net value of tangible assets transferred, was claimed as payment made by the assessee for acquisition of various business and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplated u/s. 32(1)(ii) of the Act. In our considered opinion, the plea of the assessee for allowance of depreciation in terms of section 32(1)(ii) of the Act cannot be faulted either in law or on facts. 16. The other objection of the CIT(A) to the effect that the amalgamation intention is not by way of purchase but is an amalgamation by merger, in our Jew, is no ground to deny the claim of the assessee, which is otherwise well founded. Therefore, having regard to the aforesaid discussion, in our view, on facts and in law the assessee is entitled for deprecation in the impugned sum for acquisition of business of commercial rights contemplated in section 32(1)(ii) of the Act. Thus on the Ground of Appeal No. 3, assessee succeeds. 6.7 In view of the judgment of the ITAT, Pune Bench as well as Bombay Tribunal in case of ACIT vs. Elster Metering Pvt. Ltd., the appellant has entitled for depreciation u/s. 32(1)(ii) of the I.T Act which is to be amortized in the five consecutive years. In view of the same, Ground No. 1, 2 3 are allowed. 6. The Revenue being aggrieved by the aforesaid order of the learned Commissioner (Appeals) is in further appeal before the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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