section 32

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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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 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 on Goodwill arising out of Amalgamation: Tax Impact

Income Tax - The concept of merger and acquisition was not popular until the year 1988 in India. However, in the last five years merger and acquisition has emerged as a very important tool for growth of Indian corporates. Today, many companies are merging with each other in order to generate more revenues that the companies could have earned individua...

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Value of assets & depreciation on it, in the hands of purchaser in case of division purchase (purchaser in case of slump sale)

Income Tax - Ankita Agrawal Income Tax Act, 1961 is quite clear on the tax implications in the hand of purchaser and seller in case of amalgamation or demerger, but when it is a division purchase or slump purchase, there are no specific provisions in the Act in relation to purchaser. Section 50B of the Act clearly specifies […]...

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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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Leasehold Rights not eligible for Depreciation

Mahanadi Coalfields Ltd. Vs DCIT (ITAT Cuttack) - Lease hold rights are not eligible for depreciation u/s.32(1)(ii) of the Act considering it as intangible asset and, hence, dismiss this ground of appeal of the assessee....

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Payment of little higher rate of interest on unsecured loans justified as it involves lesser formalities

DCIT Vs. M/s. Ahmedabad Strips P. Ltd. (ITAT Ahmedabad) - There is no dispute with regard to the fact that creditors do fall within the category of specified persons contemplated in section 40A(2)(b) of the Act. Short question before us is, whether payment of interest at the rate of 18% to such persons on the loans availed from them is excessive or not, ha...

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Re-compute Depreciation as loss on sale of motor car Wrongly debited to P&L account: ITAT

Pearl Freight Services (P) Ltd. Vs. ACIT (ITAT Mumbai) - Where assessee claimed loss on sale of motor car, which was wrongly debited to P&L account, but there were other motor cars also existing in block of assets and the said block of asset of motor car had not ceased to exist, therefore, the assessee was entitled to depreciation under section 32 on the ...

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Depreciation eligible on Right to collect toll for specified period as it is intangible Asset

Ashoka Infrastructure Ltd. Vs. Asst. CIT (ITAT Pune) - As assessee was not the owner of toll road, but had been given the right to develop, maintain and operate the toll road and to further collect the toll for the specified period, then this right was an intangible asset falling under section 32(1)(ii) and expenditure on development, construction and m...

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Depreciation Rate applicable to wind mill would apply to civil foundation and electric turbine generator for wind mill

CIT Vs. Mehru Electricals & Mechanical Engineers (P) Ltd. (Rajasthan High Court) - As civil work and electric generator are taken to be a part of windmill, rate as is applicable for the depreciation for windmill would apply to the civil foundation and electric turbine generator also....

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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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section 32’s Popular Posts

Recent Posts in "section 32"

Leasehold Rights not eligible for Depreciation

Mahanadi Coalfields Ltd. Vs DCIT (ITAT Cuttack)

Lease hold rights are not eligible for depreciation u/s.32(1)(ii) of the Act considering it as intangible asset and, hence, dismiss this ground of appeal of the assessee....

Read More

Payment of little higher rate of interest on unsecured loans justified as it involves lesser formalities

DCIT Vs. M/s. Ahmedabad Strips P. Ltd. (ITAT Ahmedabad)

There is no dispute with regard to the fact that creditors do fall within the category of specified persons contemplated in section 40A(2)(b) of the Act. Short question before us is, whether payment of interest at the rate of 18% to such persons on the loans availed from them is excessive or not, having regard to the fair market value of ...

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Re-compute Depreciation as loss on sale of motor car Wrongly debited to P&L account: ITAT

Pearl Freight Services (P) Ltd. Vs. ACIT (ITAT Mumbai)

Where assessee claimed loss on sale of motor car, which was wrongly debited to P&L account, but there were other motor cars also existing in block of assets and the said block of asset of motor car had not ceased to exist, therefore, the assessee was entitled to depreciation under section 32 on the block of assets consisting of motor car ...

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Depreciation eligible on Right to collect toll for specified period as it is intangible Asset

Ashoka Infrastructure Ltd. Vs. Asst. CIT (ITAT Pune)

As assessee was not the owner of toll road, but had been given the right to develop, maintain and operate the toll road and to further collect the toll for the specified period, then this right was an intangible asset falling under section 32(1)(ii) and expenditure on development, construction and maintenance of infrastructure facility as...

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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

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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Posted Under: Income Tax |

Depreciation Rate applicable to wind mill would apply to civil foundation and electric turbine generator for wind mill

CIT Vs. Mehru Electricals & Mechanical Engineers (P) Ltd. (Rajasthan High Court)

As civil work and electric generator are taken to be a part of windmill, rate as is applicable for the depreciation for windmill would apply to the civil foundation and electric turbine generator also....

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Depreciation on assets allowable to trust despite treatment of same as Income Application : SC

Commissioner of Income tax Vs Rajasthan and Gujarat Charitable Foundation Poona (Supreme Court of India)

Assessing Officer view in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to...

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Depreciation cannot be denied for Breakdown & Technical Snags during Trial runs of Machineries

The Pr. Commissioner of Income­- Tax­ Vs. M/s. Larsen and Toubro Ltd. (Bombay High Court)

Once plant commences operation and even if product is substantial and not marketable, the business can said to have been set up. Mere breakdown of machinery or technical snags that may have developed after the trial run which had interrupted the continuation of further production for a period of time cannot be held ground to deprive the a...

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Additional depreciation allowable to Company in Generation and distribution of electricity even prior to 1-4-2013

Damodar Valley Corporation Vs. Dy. CIT (ITAT Kolkata)

Damodar Valley Corporation Vs. Dy. CIT (ITAT Kolkata) We find that on perusal of section 32(1)(iia) of the Act as it stood upto assessment year 2012-13, it is evident that the additional depreciation is permissible to all assessees who are engaged in the business of manufacture or production of any article or thing. In the […]...

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Depreciation @ 100% on’ Advertisement hoardings treated as temporary structures allowable

D.C.I.T. Vs. M/s. One Ad Display Pvt. Ltd. (ITAT Kolkata)

Depreciation @ 100% on' hoardings treated as temporary structures as against the treatment given by the AO as plant and machinery allowing depreciation @ 15%....

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