section 32

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 ...

Read More

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 ...

Read More

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...

Read More

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...

Read More

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...

Read More

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...

Read More

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...

Read More

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...

Read More

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, hen...

Read More

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....

Read More

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....

Read More

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...

Read More

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...

Read More

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...

Read More

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 ...

Read More

section 32’s Popular Posts

Recent Posts in "section 32"

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...

Read More

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...

Read More

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)...

Read More

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....

Read More

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....

Read More

Depreciation allowable on Assets ready to use but not put to use

Betterman Engineers Pvt. Ltd. Vs I.T.O. (ITAT Kolkata)

Betterman Engineers Pvt. Ltd. Vs I.T.O. (ITAT Kolkata) In the instant case the assessee has acquired certain fixed assets on lease and has charged depreciation on the same. The assets being the godown building, office building, power house building, Weigh Bridge room and machinery. The ld. AO on the basis of the statement made by [&hellip...

Read More

Mere wrong claim of depreciation would not invite penalty U/s. 271(1)(c)

Chambal Fertilizers & Chemicals Ltd. Vs Asstt. CIT (Rajasthan High Court)

A mere making of a wrong, though bona fide claim of depreciation, which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars of income and therefore, such wrong claim will not automatically invite penalty under section 271(1)(c)....

Read More

Batteries used with UPS and forming system for power back up qualifies for depreciation at 60%

DCIT Vs M/s. Lotwin Online Lottery Pvt. Ltd (ITAT Mumbai)

In view of CIT v. BSES Yamuna Powers Ltd. (2013) 358 ITR 47 (Delhi), batteries which were used along with UPS and which formed a system for power back up in case of power failure qualified for depreciation at 60 per cent....

Read More

UPS is Integral part of Computer and eligible for 60% Depreciation

ACIT Vs M/s. Caparo Engineering India Pvt. Ltd. (ITAT Delhi)

The aforesaid appeal has been filed by the Revenue against the impugned order dated 12.09.2014, passed by the Ld. CIT(Appeals)-XX, New Delhi for the quantum of assessment passed u/s.144C(3) for the Assessment Year 2007-08. In the grounds of appeal, following grounds have been raised....

Read More

Browse All Categories

CA, CS, CMA (3,827)
Company Law (4,005)
Custom Duty (7,033)
DGFT (3,742)
Excise Duty (4,154)
Fema / RBI (3,505)
Finance (3,715)
Income Tax (27,898)
SEBI (2,937)
Service Tax (3,394)

Featured Posts

Search Posts by Date

September 2018
M T W T F S S
« Aug    
 12
3456789
10111213141516
17181920212223
24252627282930