Pune ITAT allows
depreciation claim for AYs 2004-05 and 2005-06 on intangible assets, viz.
know-how, trademark and patents, goodwill acquired by assessee-company pursuant
to takeover of the catalyst business on a going-concern basis (during preceding
AY 2003-04 at a slump sale price of Rs.153.18 cr.), also allows depreciation on
non-compete fees payment; Rejects Revenue's stand that valuer had not correctly
allocated slump sale consideration to various assets as valuer did not
attribute any cost to most important asset acquired by assessee i.e. land at
Panki and Taloja, perusing various agreement, ITAT holds that no land was
transferred to assessee, also rejects Revenue's stand that no ‘substantial’
part of slump price can be attributed to the know-how, patents and
trademarks; Further, remarks that “ultimately after the slump
price has been attributed first to the value of tangible assets, then the
balance is to be attributed to intangible assets and once the same is done and
whether it is under the umbrella of know-how, trademarks, patents or goodwill,
it makes no difference since all these are covered under the umbrella of
intangible assets, which are eligible for claim of depreciation u/s. 32(1)(ii)”,
relies upon SC ruling in Smif Securities; Further, ITAT rejects
Revenue’s stand that slump price paid for acquiring bundle of rights /
assets cannot be apportioned amongst the individual assets for the purpose of
depreciation, relies on Punjab & Haryana HC ruling in Shreyans
Industries Ltd., Delhi HC rulings in Triune Energy Services (P.) Ltd. and DE
Nora India Ltd.; Referring to the co-ordinate bench ruling in assessee’s own
case for preceding AY whereby the sum of Rs.153.18 crores was first allocated
to cost of tangible assets, further to the value of trademarks, patents and
know-how and the balance to the goodwill based on the values assigned by an
independent Valuer and depreciation was allowed to assessee, ITAT remarks that
“Once the asset has entered into ‘block of assets’ and thereafter, depreciation
has been allowed ….the WDV of such asset is to be accepted as sacrosanct and
depreciation has to be allowed on the same.”, relies on Bombay HC ruling in
HSBC Asset Management (I) (P.) Ltd. :ITAT
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