Dabar India Limited v Assistant Commissioner of Income Tax,
Depreciation — Tenancy right — Allowability — Assessee claimed depreciation on tenancy rights — AO rejected claim following view taken in preceding years — CIT(A) confirmed disallowance — Held, perusal of definition of intangible assets on which depreciation is available u/s 32 makes it vivid that intangible assets
are know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature — Expression "any other business or commercial rights" as employed in definition of "intangible" assets, must mean only intangible assets similar to those which precede it, that is, "know-how, patents, copyrights, trademarks, licenses, franchises" — Former category of intangible assets includes such assets with which business is directly carried — Such intangible assets directly facilitate profit earning activity — On other hand, tenancy rights have no significance whatsoever either with right to manufacture or actual manufacture of products or their sale carrying brand name or logo, etc — Tenancy rights simply provide place at which manufacturing or administrative activity is pursued — Legislature made its intention crystal clear by use of words "of similar nature" immediately after words "any other business or commercial rights" — There was vast difference between know-how, patents, copyrights, trademarks, licenses, franchises, etc, on one hand and tenancy rights on other, it was opined that tenancy rights cannot be construed as "intangible" assets falling within meaning of Explanation 3 to section 32(1).
Depreciation — Tenancy right — Allowability — Assessee claimed depreciation on tenancy rights — AO rejected claim following view taken in preceding years — CIT(A) confirmed disallowance — Held, perusal of definition of intangible assets on which depreciation is available u/s 32 makes it vivid that intangible assets
are know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature — Expression "any other business or commercial rights" as employed in definition of "intangible" assets, must mean only intangible assets similar to those which precede it, that is, "know-how, patents, copyrights, trademarks, licenses, franchises" — Former category of intangible assets includes such assets with which business is directly carried — Such intangible assets directly facilitate profit earning activity — On other hand, tenancy rights have no significance whatsoever either with right to manufacture or actual manufacture of products or their sale carrying brand name or logo, etc — Tenancy rights simply provide place at which manufacturing or administrative activity is pursued — Legislature made its intention crystal clear by use of words "of similar nature" immediately after words "any other business or commercial rights" — There was vast difference between know-how, patents, copyrights, trademarks, licenses, franchises, etc, on one hand and tenancy rights on other, it was opined that tenancy rights cannot be construed as "intangible" assets falling within meaning of Explanation 3 to section 32(1).
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