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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 ..... led for depreciation under section 32(1)(ii) of the Act which is to be amortized in the five consecutive years. 3. Before us, this is the second round of appeal. The facts of the case are, the assessee is a Co-operative Bank engaged in the Co- operative Banking business. During the second round of proceedings before the Assessing Officer, as it appears from the assessment order dated 30th March 2016, the assessee for the year under consideration filed its return of income on 30th September 2009, declaring total income of Rs. 31,06,87,200. Subsequently, the return of income was processed under section 143(1) of the Income Tax Act, 1961 (for short "the Act") and the case was selected for scrutiny which was assessed under section 143(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, considering the growth of bank for the year, the entire amount was debited in the Profit & Loss Account during the year itself. In the computation of income the cost has been added back while at the same time an amount of Rs. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter was remand back to the A.O. with the direction to examine the claim of the appellant by duly considering the submissions made and information furnished by the appellant and take appropriate decision in accordance with the law. However, the A.O. has made the assessment u/s. 143(3) r.w.s. 254 of the I.T. Act on 30.03.2016 maintaining the status of the assessment order dated 21.11.2011 at Rs. 36,61,48,880/-. 6.5 As regard, the A.O. relied on the judgement of M/s. Techno Shares and Stock Ltd. is concerned, my attention was invited by the appellant and submitted that "The appellant would like to submit that while relying on the Bombay High Court judgment in the case of Techno Shares, the assessing officer has shown ignorance about the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 commercial rights, which comprised of business claims; business information; business records; contracts; skilled employees; ad, knowhow. Such acquisition was claimed to be an asset in the nature of 'business or commercial rights' contained in section 32(1)(ii) of the Act. The Hon'ble High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration paid included, sum paid for acquiring the client base of the transferor. The acquisition of rights over the assets of the transferor, inclusive of its customers base was held to be an 'intangible asset' being 'business or commercial rights of similar nature' contemplated in section 32(1)(ii) of the Act and was held eligible for depreciation. Following the aforesaid discussion, in the present case, the business advantages detailed earlier, are liable to be considered as an intangible asset, being 'business or commercial rights of similar nature' contemplated 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and had to be treated on account of intangible asset being on account of business or commercial rights of similar nature covered under section 31(1)(ii) of the Act and the depreciation should be allowed on the same. 9. Considered the rival submissions and perused the material on record. We find that the Assessing Officer was not justified in applying the ratio laid down by the Hon'ble Jurisdictional High Court in Techno Shares & Stock Ltd. The expenditure claimed by the assessee on acquisition of the Bank is capital in nature which is corroborated by the decision of the Tribunal, Pune Bench, in M/s. Cosmos Co-operative Bank Ltd. v/s DCIT, 64 SOT 90 (Pune), wherein it has been held that the cost of acquisition was intangible in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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