section 32

Depreciation: All You Need to Know

Income Tax - The following essay will explain the meaning of depreciation and all the terms around it through a list and contrast the surrounding terms with the main concept of depreciation....

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S. 32 Understanding Depreciation with case laws

Income Tax - Depreciation – a non-cash expenditure allowed under Income Tax Act, 1961 following block concept. Under the block concept, all the assets falling within the same class and subject to same rate of depreciation are clubbed together and considered as single asset. Any alterations to the value of the block have to be strictly in accordance ...

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Rates of Depreciation as Per Income Tax Act,1961

Income Tax - Block of Assets :-The expressions Assets and Blocks of Assets w.e.f. 1-4-1999 shall mean a group of assets falling within a class of assets comprising:–Tangible Assets being buildings, machinery, plant or furniture;Intangible Assets being knowhow, patents, copyrights, trademarks, licences, franchises or any other business or commercial ...

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Depreciation on goodwill – the perennial debate

Income Tax - Depreciation on goodwill has been a matter of considerable debate. Although the Supreme Court, in its landmark judgment in the case of Smifs Securities, held that goodwill is an intangible asset within the meaning of section 32 of the Income-tax Act, 1961 (the Act) and depreciation on goodwill is allowable under the section, some judgment...

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Depreciation on Land in Case of Composite Purchase Agreements

Income Tax - It is a well known and understood fact that land is not a depreciable asset. By its very definition, depreciation means decrease in the value of an asset through wear and tear, deterioration or obsolescence. While these implications easily apply to buildings or other structures built upon land, the land itself as an asset has no finite li...

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Depreciation in case of slump sale based on proportionate number of days by transferor and transferee company- Clarify legal position- ICAI

Income Tax - The proviso to section 32 provides that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets or know how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor...

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Depreciation on JCB cannot be disallowed merely for Delay in Registration

Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur) - Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur) There is no dispute that the assessee has purchased the JCB machine vide Invoice dated 3rd June, 2011 and delivery was taken on 6th June, 2011. However, the registration of JCB with the RTO was done on 29.08.2011. We further note that in the registration cha...

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Depreciation on Printers, UPS, Scanners, Cash dispenser Hardware & ATM Switch

Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad) - Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad) ATM is a computer telecommunication device that allows Bank Customers to access banking at places other than the normal bank without having to take the trouble to go to the Bank in person and collect the cash as is done under the convention...

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Depreciation Eligible on Intangible asset namely Goodwill

KPIT Cummins Global Business Solutions Ltd. Vs Asstt. CIT (ITAT Pune) - Goodwill is an intangible asset under section 32(1)(ii) covered within the expression 'any other business or commercial rights of similar nature' and, therefore, assessee was entitled to claim depreciation on such goodwill....

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Depreciation on IPR cannot be disallowed merely for non use in Manufacturing

Commissioner of income tax Vs Sinochem india co. Pvt. Ltd. (ITAT Delhi) - CIT Vs Sinochem India co. Pvt. Ltd. (ITAT Delhi) The purchase of intellectual property rights by the assess are not disputed. Consideration paid is also not disputed. The nature and character of the intellectual property rights, as noticed in the order passed by the Commissioner of Income Tax (Appea...

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Non-Competent Fee & Brand Equity eligible for Depreciation

CIT Vs M/s. Radaan Media Works (Madras High Court) - 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...

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Commercial rights in the nature of intangible assets eligible for depreciation

I.T.A. No. 496/Delhi/2014 - (15/04/2015) - A reading of the agreement between STL and the assessee clarifies that a specific amount, i.e., Rs.9 Crores was paid by the assessee to the transferor who owned commercial rights towards the network and the facilities. The consideration was a specific value but for which the network would not have b...

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Amendment in Income Tax Rules Related to Depreciation on Fixed Assets

Notification No. 43/2014-Income Tax - (16/09/2014) - Notification No. 43/2014-Income Tax S.O. 2399(E).—In exercise of the powers conferred by Section 295 read with Section 32 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:— 1. (1) Thes...

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MVAT circular on Issuing of Tax Clearance Certificates

Trade Circular No. 1 T of 2010 - (05/01/2010) - In view of this situation, it is necessary that the procedure for the issuing of such certificates should be standardized. Such certificates are very often required to be produced before various government authorities, local bodies or other bodies etc. for the purpose of tender renewal of licenses e...

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Claim for depreciation- Where required particulars not been furnished

Circular : No. 29-D(XIX-14) [F. No. 45/239/65-ITJ], - (31/08/1965) - Numerous instances have come to the notice of the Board where assessee’s claim for depreciation duly shown in the return was not considered by the Income-tax Officer because books of account produced were not properly maintained and it was necessary to estimate profits by invoking the proviso to ...

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Recent Posts in "section 32"

Depreciation: All You Need to Know

The following essay will explain the meaning of depreciation and all the terms around it through a list and contrast the surrounding terms with the main concept of depreciation....

Read More
Posted Under: Income Tax |

Depreciation on JCB cannot be disallowed merely for Delay in Registration

Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur)

Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur) There is no dispute that the assessee has purchased the JCB machine vide Invoice dated 3rd June, 2011 and delivery was taken on 6th June, 2011. However, the registration of JCB with the RTO was done on 29.08.2011. We further note that in the registration charges, the RTO […]...

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Depreciation on Printers, UPS, Scanners, Cash dispenser Hardware & ATM Switch

Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad)

Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad) ATM is a computer telecommunication device that allows Bank Customers to access banking at places other than the normal bank without having to take the trouble to go to the Bank in person and collect the cash as is done under the conventional method of withdrawing […]...

Read More

Depreciation Eligible on Intangible asset namely Goodwill

KPIT Cummins Global Business Solutions Ltd. Vs Asstt. CIT (ITAT Pune)

Goodwill is an intangible asset under section 32(1)(ii) covered within the expression 'any other business or commercial rights of similar nature' and, therefore, assessee was entitled to claim depreciation on such goodwill....

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Depreciation on IPR cannot be disallowed merely for non use in Manufacturing

Commissioner of income tax Vs Sinochem india co. Pvt. Ltd. (ITAT Delhi)

CIT Vs Sinochem India co. Pvt. Ltd. (ITAT Delhi) The purchase of intellectual property rights by the assess are not disputed. Consideration paid is also not disputed. The nature and character of the intellectual property rights, as noticed in the order passed by the Commissioner of Income Tax (Appeals), are again not disputed. The intelle...

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Non-Competent Fee & Brand Equity eligible for Depreciation

CIT Vs M/s. Radaan Media Works (Madras High Court)

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 Co...

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Depreciation is available on genuine goodwill

M/s CLC & Sons Pvt. Ltd., Vs ACIT (ITAT Delhi)

CLC & Sons Pvt. Ltd Vs. ACIT (ITAT Delhi) (Special Bench) Hon’ble Summit court in CIT vs. Smifs Securities Ltd. (2012) 348 ITR 302 (SC) in which it has been held: “that goodwill will fall under the expression ‘or any other business or commercial rights of similar nature’” and, hence, qualifies for depreciation u/s 32(1)...

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Non-Competent Fee paid is Intangible Asset- Depreciation allowable

The Deputy Commissioner of Income Tax Vs M/s. Sapa Extrusion India Pvt. Ltd. (ITAT Bangalore)

ITAT held that non-compete fee paid is an intangible asset acquired by the assessee on which depreciation has to be allowed u/s. 32(1)(ii) of the act....

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S. 32 Understanding Depreciation with case laws

Depreciation – a non-cash expenditure allowed under Income Tax Act, 1961 following block concept. Under the block concept, all the assets falling within the same class and subject to same rate of depreciation are clubbed together and considered as single asset. Any alterations to the value of the block have to be strictly in accordance ...

Read More
Posted Under: Income Tax | ,

Expenditure incurred on software eligible for depreciation @60%

Make My Trip (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)

Expenditure incurred on the software is eligible for depreciation @60%, depreciation on the block of assets of website development cost eligible @ 60%: Re: appeal A.Y. 2006-07 of Make My Trip (India) Pvt. Ltd....

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