Section 32(1)(ii) Depreciation On "Intangible Assets": High Court Explains Law

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Mon, Apr 2, 2012 at 2:53 PM
Subject: Message from EGroup of SolapurCAs S. 32(1)(ii) Depreciation On "Intangible Assets": High Court Explains Law
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Areva T&D India Ltd vs. DCIT (Delhi High Court)

S. 32(1)(ii): Business information, contracts, records etc are "intangible assets" & eligible for depreciation

 

The assessee, vide slump sale agreement, acquired a transmission and distribution business as a going concern for a lump sum consideration of Rs.44.7 crores. The net tangible assets were valued at Rs.28.11 crores and the balance Rs. 16.58 crores was allocated by the transferee towards acquisition of bundle of "business and commercial rights" being business information; business records; contracts; employees etc, compendiously termed as "goodwill". The assessee claimed that the said "business and commercial rights" were an "intangible asset" and eligible for depreciation u/s 32(1)(ii). The assessee's claim was rejected by the AO, CIT(A) & Tribunal on the ground that depreciation was not allowable on "goodwill". On appeal by the assessee, HELD reversing the lower authorities:

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Regards,

Editor,

itatonline.org

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