Case Law Details
CIT Vs M/s. Radaan Media Works (Madras High Court)
Department fairly admitted that the brand equity of a sum of Rs.75 lakhs valued at a sum of Rs.75 lakhs would be an intangible right coming within the purview of ‘business or commercial rights’ of a similar nature. He also brought to our notice the decision of this High Court in the case of Penta Media Graphics and Delhi High Court in the case of Sharp Business Systems Vs. Commissioner of Income Tax, that support the stand of the assessee.
The substantial questions of law in T.C.No.1175 of 2008 are thus decided in favour of the assessee and against the Revenue holding that brand equity constitutes an intangible asset in terms of Section 32(1)(ii) of the Act upon which depreciation is liable to be granted.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
(Judgment of the Court was delivered by M.M.SUNDRESH, J.)
Aggrieved over the order passed by the Tribunal, by formulating the following substantial questions of law in respect of the assessment year 2005-2006, the Revenue has preferred the present appeal:
“1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was entitled to depreciation on the non- complete fee under Section 32 of the Income Tax Act?
2.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was entitled to depreciation on brand equity under Section 32 of the Income Tax Act?
2.Heard the learned counsels appearing for the parties.
3.When the matter is taken up for hearing, learned counsels appearing for the parties would submit that the issue involved in this appeal is covered by the decision of this Court in Commissioner of Income Tax, Chennai Vs. M/s.Radaan Media Works India Ltd.,Chennai – 17 (T.C.A. No.1175 of 2008 dated 08.08.2017) in favour of the assessee in its own case and against the Revenue. In the said decision, this Court has held as under:
“27. Coming to Tax case (Appeal) No.1175 of 2008, the question before us is whether brand equity would be an intangible asset eligible for depreciation in terms of Section 32(1)(ii) of the Act that defines intangible assets in the following terms;
“(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, Owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed.”
28.The learned Standing counsel for the Department fairly admitted that the brand equity of a sum of Rs.75 lakhs valued at a sum of Rs.75 lakhs would be an intangible right coming within the purview of ‘business or commercial rights’ of a similar nature. He also brought to our notice the decision of this High Court in the case of Penta Media Graphics and Delhi High Court in the case of Sharp Business Systems Vs. Commissioner of Income Tax, that support the stand of the assessee.
29. The substantial questions of law in T.C.No.1175 of 2008 are thus decided in favour of the assessee and against the Revenue holding that brand equity constitutes an intangible asset in terms of Section 32(1)(ii) of the Act upon which depreciation is liable to be granted.”
4.Thus, in view of the same, the Tax Case Appeal stands dismissed. No costs.
