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TMI Blog2023 (9) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of colours. The expression mark which is defined in Section 2(m) of the TM Act, includes, among others, a brand - a conjoint reading of these Sections would clearly point in the direction that the expression trademark under Section 32(1)(ii) and in the appended Explanation i.e., Explanation 3(b) would clearly include brand names. A careful perusal of clause (b) of Explanation 3 extracted hereinabove shows that the definition of assets, as explained in the Explanation, includes commercial rights of similar nature. Brand names certainly invest in the owner commercial rights, and therefore, will fall within the scope of intangible assets, which are amenable to depreciation u/s 32(1)(ii) - No substantial question of law. - HON'BLE MR. JUSTICE RAJIV SHAKDHER AND HON'BLE MR. JUSTICE GIRISH KATHPALIA For the Appellant Through: Mr Sanjeev Menon, Sr Standing Counsel. For the Respondent Through: Mr Rohit Jain with Mr Aniket D. Agarwal, Advs. RAJIV SHAKDHER, J.: (Oral) CM Appl. 24044/2019 1. Allowed, subject to just exceptions. CM Appl.24043/2019 [Application filed on behalf of the appellant/revenue seeking condonation of delay of 50 days in filing the appeal] 2. This is an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant was not put to use during the year under consideration as certain parts were still under construction I testing stage as per details retrieved from details of addition of fixed assets submitted by the assessee on sample basis. However, as argued by the Id. AR, the total depreciation (including additional depreciation) claimed by the assessee for the above plant was Rs.7,67,09,4811- which included depreciation on factory building at Rs.22,73,462/- and depreciation on plant and machinery at Rs.7,44,36,109/-. The AO has disallowed the depreciation on plant and machinery, but has allowed depreciation on the factory building which is part and parcel of the same Chemical Recovery Plant. It is argued by the Id. AR, both the building and plant and machinery were compositely completed and put to use together in March 2008. It is argued that the AO's action in partly allowing depreciation on the above factory while disallowing depreciation on the remaining part is bad in law and facts. Further, it is argued by the Id. AR that the said Chemical Recovery Plant was fully commissioned on 21.03.2008 and it started its operations from the said date. The said plant generated 1823 tonnes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Department alongwith Cenvat credit records wherein the said Cenvat credit pertaining the Chemical Recovery Plant (CRP) was entered and also its corresponding entries in the Excise records - RG 23 C Part II (Entry book of duty credit of capital goods) and tallied the same with the Central Excise records, original invoices, and original IGPs. The original IGPs which are made at the time receipt of the material were also produced before the AO during the remand proceeding and were duly verified by him and tallied with the relevant invoices. The AO has not made any adverse comment whatsoever on merit. Considering the above, I find that the impugned addition of Rs.7,44,36,1091- made by the AO cannot be sustained on facts or in law. The same is, therefore, deleted. 11. Likewise, insofar as the second issue is concerned, the CIT(A) ruled in favour of the respondent/assessee and sustained the claim of depreciation on the brand names by treating the same as intangible assets, which, according to him, fell within the purview of Section 32(1)(ii) of the Act. Being aggrieved, the appellant/revenue carried the matter in appeal to the Tribunal. The Tribunal, via the impugned order, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this behalf, the least that could have been done, by the appellant/revenue, then, was to raise a specific ground in the appeal preferred before the Tribunal. 21.1 The record seems to disclose that no such ground was raised; a broad and omnibus ground was raised, which simply said that the order passed by the CIT(A) was erroneous. 21.2 This which brings us to the decision that Mr Menon has placed before us in support of his submissions. According to us, the judgment of the Madras High Court in Narendra Kumar Sakaria is clearly distinguishable as in this case an opportunity was granted to the AO to submit a remand report. 22. As regards the other aspect, which is whether the respondent/assessee could claim depreciation qua brand names, in our view, is no longer res integra, in view of the judgment of the Supreme Court in Commissioner of Income-Tax vs. Smifs Securities Ltd. (2012) 348 ITR 302 (SC). The Supreme Court s observations are as under: [Question (b) 5. Whether goodwill is an asset within the meaning of Section 32 of the Income Tax Act, 1961, and whether depreciation on goodwill is allowable under the said section? Answer 6. In the present case, the assessee had claimed deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income Tax (Appeals) [ CIT (A) , for short] has come to the conclusion that the authorised representatives had filed copies of the orders of the High Court ordering amalgamation of the above two companies; that the assets and liabilities of M/s YSN Shares and Securities (P) Ltd. were transferred to the assessee for a consideration; that the difference between the cost of an asset and the amount paid constituted goodwill and that the assessee Company in the process of amalgamation had acquired a capital right in the form of goodwill because of which the market worth of the assessee Company stood increased. This finding has also been upheld by the Income Tax Appellate Tribunal ( ITAT , for short). We see no reason to interfere with the factual finding. 11. One more aspect which needs to be mentioned is that, against the decision of ITAT, the Revenue had preferred an appeal to the High Court in which it had raised only the question as to whether goodwill is an asset under Section 32 of the Act. In the circumstances, before the High Court, the Revenue did not file an appeal on the finding of fact referred to hereinabove. 12. For the aforestated reasons, we answer Que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed; (ii) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed: Provided that no deduction shall be allowed under this clause in respect of (a) any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28th day of February, 1975 but before the 1st day of April, 2001, unless it is used (i) in a business of running it on hire for tourists ; or (ii) outside India in his business or profession in another country ; and (b) any machinery or plant if the actual cost thereof is allowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42 : Provided further that where an asset referred to in clause (i) or clause (ii) or clause (iia) or the first proviso to clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall ..... 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