Trio Elevators Company(India) Ltd., Ahmedabad V. The ACIT.,Circle-8, Ahmedabad

ITA 2477/AHD/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9772 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 03-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K
• Assessee Lawyers: SAURABH N SOPARKAR
• Keywords: Depreciation; Valuation report
• Section: 143(3); 32; 28

Judgement Text

I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM ] I.T.A. NO. 2477/AHD/ 20 11 ASSESSMENT YEAR : 2007 - 08 TRIO ELEVATORS CO MPANY (INDIA) LTD . . .APPELLANT 404, SHIVAM COMPLEX, BHUYANGDEV CR OSS ROAD SOLA ROAD, GHAT LO DIYA, AHMEDABAD 380 061 . [PAN: AACCT4923E] VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 8 , AHMEDABAD .. . RESPONDENT APPEARANCES BY: SAURABH N SOPARKAR FOR THE APPELLANT A K PANDEY FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 29 TH ,2015 DATE OF PRONOUNCING THE ORDER : MARCH 8 TH , 20 1 6 O R D E R PER PRAMOD KUMAR , AM : 1. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 27 TH JULY , 2011 , PASSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2007 - 08. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS 50,00,0 00 ON ACQUISITION OF TRADE MARK DURING THE YEAR . 2. THE ISSUE IN APPEAL LIES IN A RATHER NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE US IS A COMPANY INCORPORATED ON 10 TH AUGUST, 2006. PURSUANT TO SLUMP SALE AGREEMENT DATED 31. 08. 2007 WITH A L PS TECHNOLOGIES PVT . LTD . , THE ASSESSEE COMPANY HAD PURCHASED THE BUSINESS OF SELLING, INSTALLATION, I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 2 OF 8 COMMISSIONING AND REPAIRS AND MAINTENANCE OF ELEVATORS WITH EFFECT FROM 7 TH SEPTEMBER 2006, WITH ALL ITS ASSETS AND LIABILITIES, BENEFITS AND OBLIGATIONS, EMPLOYEES AND CUSTOMERS, AS A GOING CONCERN. ONE OF THE ASSETS WHICH WAS TRANSFERRED TO THE ASSESSEE AS SUCH WAS TRADEMARK WHICH WAS ASSIGNED A VALUE OF RS 2,00,00,000 IN THIS AGREEMENT. THE ASSESSEE CLAIMED DEPRECIATION OF RS 50 LAKHS ON THE ASSET SO ACQUIRED. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE A SSESSING O FFICER NOTED THAT THE ASSESSEE IS NOT YET REGISTERED OWNER OF THE TRADEMARK AND WAS NOT THEREFORE ELIGIBLE FOR CLAIM OF DEPRECIATION. THE A SSESSING O FFICER WAS FURTHER OF THE O PINION THAT SINCE THE ASSESSEE IS NOT A REGISTERED OWNER OF THE TRADEMARK, HE IS NOT ENTITLED TO THE USE OF THE TRADEMARK, NO R CAN THE ASSESSEE BAR ANY OTHER PERSON FROM USING THE SAME TRADEMARK. HE FURTHER NOTED THAT IN TERMS OF SECTION 28 (1) OF THE TRA DE M ARKS A CT , 1999 IT IS ONLY ON IT S REGISTRATION THAT THE PROPRIETOR OF THE TRADEMARK GETS THE EXCLUSIVE RIGHT TO USE THE TRADEMARK AND TO OBTAIN RELIEF IN RESPECT OF INFRINGEMENT OF THE TRADEMARK. IT WAS IN THE BACKDROP OF THESE OBSERVATIONS THAT THE A SSESSING O FFICER DECLINED THE CLAIM OF DEPRECIATION IN RESPECT OF TRADEMARK BY OBSERVING, INTER ALIA, AS FOLLOWS: 4.0 IT IS THUS CLEAR THAT THE ASSESSEE HAS NOT FOLLOWED THE PROVISIO NS OF THE TRADEMARK ACT , AND IS IN FACT NOT A REGISTERED USER OF THE TR ADEMARK AND AS PER THE PROVISIONS OF THE TRADEMARKS ACT IS NO T ENTITLED TO THE USE OF TRADEMARK. THE ASSESSEE DOES NOT HAVE THE RIGHT TO THE EXCLUSIVE USE OF THE TRADEMARK, NOR CAN T HE ASSESSEE B A R ANY OTHER PERSON FROM USING THE SAME MARK. TO BE AN OWNE R OF A PROPERTY, IN THIS CASE, THE TRADEMARK, THE OWNER MUST HAVE THE RIGHT TO USE AND ENJOY THE FRUITS OF THE PROPERTY TO THE EXCLUSION OF OTHERS, THE OWNER MUST HAVE THE RIGHT TO ALIENATE THE PROPERTY, THE OWNER MUST HAVE THE RIGHT TO FORBID ITS USE BY O THERS AND IF IT HAS BEEN USED BY SOMEONE ELSE, MUST HAVE THE RIGHT TO A LEGAL REMEDY. THESE ARE SOME OF THE CHARACTERISTICS OF OWNERSHIP. THE PRIMARY CONDITION FOR AN ASSESSEE TO CLAIM DEPRECIATION IS THAT THE ASSESSEE MUST BE THE OWNER OF THAT CAPITAL ASS ET. THE ASSESSEE HAS FAILED THE TEST OF OWNERSHIP. 4.1 SECTION 28(1) OF THE TRADE MARKS ACT, 1999 PRESCRIBED THE RIGHTS CONFERRED BY THE REGISTRATION OF THE TRADE MARK. IT IS ONLY UPON A VALID REGISTRATION THAT THE PROPRIETOR OF THE TRADE MARK GETS THE EXCLUSIVE RIGHTS TO THE USE OF TRADE MARK AND TO OBTAIN RELIEF IN RESPECT OF INFRINGEMENT OF THE TRADE MARK. AS HAS ALREADY BEEN DISCUSSED IN THE PRECEDING PARA THERE CANNOT BE TWO OWNERS OF THE SAME PROPERTY HAVING THE SAME RIGHTS. AS PER THE TRADE MARK S ACT IT IS ONLY UPON THE REGISTRATION OF THE TRADE MARKS THAT THE PROPRIETOR GETS AN EXCLUSIVE RIGHT TO THE USE OF TRADE MARK, TO EXCLUSION OF OTHERS. IT IS ALSO ONLY UPON REGISTRATION OF THE TRADEMARK THAT I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 3 OF 8 THE PROPRIETOR CAN OBTAIN RELIEF AS AND WHEN TH E TRADE MARK HAS BEEN INFRINGED UPON. THESE CHARACTERISTICS ARE SINE QUA NON FOR OWNERSHIP OVER ANY PROPERTY. 4.2 IN VIEW OF THE FACTS AND CIRCUMSTANCE OF THE CASE, THE TRADE MARKS ACT, 1999 AND THE ABOVE DISCUSSION, THE ASSESSEE CANNOT BE HELD TO BE TH E OWNER OF THE TRADE MARK UNDER ANY LAW IN FORCE. THE ASSESSEE THEREFORE CANNOT BE TERMED AS THE OWNER OF THE TRADE MARK UPON WHICH IT HAS CLAIMED DEPRECATION AS PER SECTION 32 OF THE I.T. ACT. 4.3 ON THE BASIS OF THE ABOVE FACTS AND CIRCUMSTANCES IT IS HELD THAT THE ASSESSEE IS NOT THE OWNER OF THE TRADE MARK AND SO IS NOT ENTITLED TO ITS CLAIM OF DEPRECIATION. THE DEPRECIATION CLAIMED BY THE ASSESSEE IS THEREFORE DISALLOWED. AS THE ASSESSEE HAS FURNISHED IN ACCURATE PARTICULARS OF INC OME PENALTY PROCEED ING U/S. 271(1) (C) IS BEING INITIATED SEPARATELY. 3. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. LEARNED CIT(A) UPHELD THE ORDER BY OBSERVING AS FOLLOWS: I HAVE CAREFULLY CONSIDERED THE ASSESSM ENT ORDER AND THE SUBMISSION FILED BY THE APPELLANT. THE APPELLANT HAS PURCHASED THE BUSINESS OF M/S. ALPS TECHNOLOGIES PVT. LTD. INCLUDING ITS ASSETS AND LIABILITIES, BENEFITS AND OBLIGATIONS, EMPLOYEES ETC. AS A ONGOING CONCERN. THE TOTAL VALUE OF THE SL UMP SAY WAS RS. 7.25 CRORES OUT OF WHICH RS. 2 CRORES WERE PROVIDED FOR TRADEMARK. THE APPELLANT HAS CLAIMED THAT THE DEPRECIATION ON THE TRADE MARK SUBSEQUENTLY TRANSFERRED IN HIS NAME SHOULD BE ALLOWED TO HIM AS THE BUSINESS WAS TAKEN OVER BY HIM ON 07/0 9/2006, INCOME EARNED AFTER SUCH TAKEOVER HAS BEEN DECLARED IN THE RETURN OF INCOME, THE APPLICATION WAS MADE FOR REGISTRATION OF TRADE MARK IN ITS NAME ON 27/08/2009 AND THE BOOKS OF THE ACCOUNT OF THE APPELLANT SHOWED THE TRADE MARK AS INTANGIBLE ASSETS. THE CLAIM OF THE APPELLANT THAT THE TRADE MARK HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT AND THE BUSINESS WAS TAKEN OVER DURING THE ASSESSMENT YEAR IS CORRECT. HOWEVER, THE APPELLANT HAS NOT BEEN ABLE TO PROVE OR SHOW WHETHER THE TRADE MARK WAS USED BY THE APPELLANT COMPANY DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR. MERE ENTRY IN THE BOOKS OF ACCOUNT SHOWING THE TRADE MARK IN THE INTANGIBLE ASSETS IS NOT SUFFICIENT TO CLAIM THE DEPRECIATION. IN OR DER TO AVAIL DEPRECIATION, THE APPELLANT SHOULD S ATISFY THE FOLLOWING CONDITION: (I) THE ASSET MUST BE OWNED BY THE APPELLANT. ( II IT MUST BE USED FOR THE PURPOSE OF BUSINESS, (III) IT SHOULD BE USED DURING THE RELEVANT PREVIOUS YEAR. THE APPELLANT IN HIS VARIOUS SUBMISSIONS MADE BEFORE THE A. O. AS WELL AS BEFORE ME HAS ONLY STATED THAT THE TRADE MARK WAS SHOWN BY HIM IN THE BOOKS OF ACCOUNT WHICH WERE AUDITED AND WERE APPROVED BY THE SHARE HOLDERS IN THE AGM. HOWEVER, I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 4 OF 8 NOWHERE ANY EVIDENCE HAS BEEN FILED WHICH PROVE THAT THE TRADE MARK WAS IN FACT U SED BY THE APPELLANT DURING THE PREVIOUS YEAR. THE WRITTEN SUBMISSION FILED BY THE APPELLANT ALSO DOES NOT THROW ANY LIGHT REGARDING THE USER OF THE TRADE MARK. THE DOCUMENTS THA T HAVE BEEN FILED DURING THE COURSE OF A PPEAL SHOW THAT THE TRADE MARK TRIO HAS BEEN REGISTERED IN THE NAME OF THE APPELLANT BUT THE EFFECTIVE DATE OF TRANSFER HAS NOT BEEN MENTIONED. IT APPEARS THAT THE TRADE MARK HAS BEEN TRANSFERRED LATER SOMEWHERE AROUND IN THE MONTH OF MARCH, 2010 AS THE LETTER FROM THE DEPUTY REGISTRAR OF TRADE MARK ALLOWING THE TRANSFER OF TRADE MARK SHOWS THE DATE OF 16/03/2010. THE OBSERVATION MADE BY THE A. O. THAT AS PER THE TRADE MARK, IF SOMEONE IS NOT REGISTERED USER OF THE TRADE MARK, HE WILL NOT BE ENTITLED TO USE IT IS ALSO RELEVANT. AS THE TRAD E MARK WAS NOT TRANSFERRED IN THE NAME OF THE APPELLANT HE COULD NOT USE IT, AND THEREFORE , HE HAS NOT BEEN ABLE TO FURNISH ANY EVIDENCE REGARDING USE OF THE TRADE MARK. I HAVE ALSO PERUSED THE JUDICIAL PRONOUNCEMENT RELIED UPON BY THE APPELLANT. THE SAME ARE NOT APPLICABLE IN THE CASE OF THE APPELLANT AS THE JUDGMENTS INDICATES THE BASIC TEST OF USE BY THE OWNER. THE DEPRECIATION WILL BE ALLOWABLE IF THE PERSON WAS A BENEFICIAL OWNER WHICH MEANS HE COULD ESTABLISH BEFORE THE AUTHORITY THAT HE WAS ACTUALLY USING IT AND HAD THE CONTROL OVER THE SAME. IN THE CASE OF THE APPELLANT, THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THE SAME. CONSIDERING THE ABOVE MENTIONED FACTS AND CIRCUMSTANCES, THE DISALLOWANCE OF CLAIM OF DEPRECIATION ON THE TRADE MARK BY THE A . O. IS UPHELD AND THE GROUND OF APPEAL IS DISMISSED . 4. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE A PPLICABLE LEGAL POSITION. 6. WE HAVE NOTED THAT THE UNDERLYING ASSUMPTION IN THE APPROACH OF THE AUTHORITIES BELOW IS THAT UNLESS A TRADEMARK IS A REGISTERED TRADEMARK, IT CANNOT BE CONSIDERED TO BE AN ASSET WORTH ANY VALUE SO AS TO ENTITLE ASSESSEE TO CL AIM THE DEPRECIATION IN RESPECT OF THE SAME. THIS ASSUMPTION IS, HOWEVER, CLEARLY FALLACIOUS. HON BLE SUPREME COURT, IN THE CASE OF CADILA HEALTH CARE LIMITED VS . CADILA PHARMACEUTICALS LIMITED [(2001) 5 SCC 73] OBSERVED AS FOLLOWS: - I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 5 OF 8 UNDER SECTION 28 O F THE TRADE AND MERCHANDISE MARKS ACT ON THE REGISTRATION OF A TRADE MARK IN PART - A OR B OF THE REGISTER, A REGISTERED PROPRIETOR GETS AN EXCLUSIVE RIGHT TO USE THE TRADE MARK IN RELATION TO THE GOODS IN RESPECT OF WHICH TRADE MARK IS REGISTERED AND TO OBT AIN RELIEF IN RESPECT OF INFRINGEMENT OF THE TRADE MARK IN THE MANNER PROVIDED BY THE ACT. IN THE CASE OF UN - REGISTERED TRADE MARK, SECTION 27(1) PROVIDES THAT NO PERSON SHALL BE ENTITLED TO INSTITUTE ANY PROCEEDING TO PREVENT, OR TO RECO VER D AMAGES FOR, T HE INFRINGEMENT OF AN UNREGISTERED TRADE MARK. SUB - SECTION (2) OF SECTION 27 PROVIDES THAT THE ACT SHALL NOT BE DEEMED TO AFFECT RIGHTS OF ACTION AGAINST ANY PERSON FOR PASSING OFF GOODS AS THE GOODS OF ANOTHER PERSON OR THE REMEDIES IN RESPECT THEREOF. IN OTHER WORDS IN THE CASE OF UN - REGISTERED TRADE MARKS, A PASSING OFF ACTION IS MAINTAINABLE. THE PASSING OFF ACTION DEPENDS UPON THE PRINCIPLE THAT NOBODY HAS A RIGHT TO REPRESENT HIS GOODS AS THE GOODS OF SOME BODY. IN OTHER WORDS A MAN IS NOT TO SELL HIS GOODS OR SERVICES UNDER THE PRETENCE THAT THEY ARE THOSE OF ANOTHER PERSON [EMPHASIS, BY UNDERLINING , SUPPLIED BY US] 7. CLEARLY, THEREFORE, EVEN THOUGH UNLESS A TRADEMARK IS REGISTERED IN THE NAME OF A PERSON , HE DOES NOT GET EXCLUSIVE RIGHTS TO USE TH E TRADEMARK IN RESPECT OF THE GOODS FOR WHICH THE TRADE MARK IS REGISTERED BUT THAT IS REALLY IMMATERIAL BECAUSE THE PERSON IN WHOSE NAME THE TRADEMARK WAS REGISTERED HAD ALREADY ASSIGNED THE RIGHTS TO THE ASSESSEE. THAT ASPECT OF THE MATTER, AND EVEN VALU ATION OF THE TRADEMARK AS PER THE VALUATION REPORT, IS NOT EVEN DISPUTE. THE ASSESSEE DID, THEREFORE, HAVE THE RIGHTS TO USE THE TRADEMARK AS THESE RIGHTS WERE ASSIGNED TO THE ASSESSEE BY THE PERSON WHO HAD THESE LEGAL RIGHTS. THE REGISTERED OWNER OF THE TRADEMARK, WHILE INITIATING THE PROCESS FOR REGISTRATION OF TRADEMARK IN THE NAME OF THE ASSESSEE COMPANY, HAS GIVEN AN AFFIDAVIT WHICH STATES AS FOLLOWS: I, CHIRAG S. PATEL, AN INDIAN NATIONAL, AGED 32 YEARS, BEING THE MANAGING DIRECTOR OF M/S. M/S. ALPS TECHNOLOGIES PVT. LTD., (FORMERLY KNOWN AS M/S. TRIO ELEVATORS PVT. LTD.,) HAVING ITS REGISTERED OFFICE AT PLOT NO,824, NR. KOTHARI I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 6 OF 8 INDUSTRIAL ESTATE, PO SANTEJ, TALUKA - KALOL, DIST: GANDHINAGAR, GUJARAT STATE, INDIA, DO HEREBY SOLEMNLY AFFIRM AS UNDER . 1. I SAY AND SUBMIT THAT, MY COMPANY IS THE ORIGINAL ADOPTER AND REGISTERED PROPRIETOR OF THE TRADE MARK 'TRIO' WHICH IS REGISTERED UNDER TRADE MARK NOS.789945 & 961083. 2. I SAY AND SUBMIT THAT, MY COMPANY HAS ASSIGNED THE PRESENT TRA D E MARK TRIO TO M/S. TRIO ELEVATORS COMPANY (INDIA) LTD. I SAY AND SUBMIT THAT, MY COMPANY HAS RELEASED ALL THE RIGHTS TOWARDS INTELLECTUAL PROPERTY SUCH AS TRADE MARK, COPYRIGHT AND OTHE R GOODWILL IN FAVOUR OF M/S. TRIO ELEVATO R S COMPANY (INDIA) LTD., HAVING ITS REGISTER ED OFFICE AT 404, SHIVAM COMPLEX, BHUYANG D EV CROSS ROAD, SOLA ROAD, GHATLODIA, AHMEDABAD 380 061, GUJARAT STATE, INDIA BY VIRTUE OF THE DEED OF ASSIGNMENT DATED 31 ST DAY OF AUG 2007. ACCORDINGLY, ALL RIGHTS STATED THEREIN SUCH AS TRADE MARK, COPYRIGHT A ND GOODWILL AND/OR OTHER INTELLECTUAL PROPERTIES NOW BELONG TO M/S. TRIO ELEVATORS COMPANY (INDIA) LTD., HAVING ITS REGISTERED OFFICE AT 404, SHIVAM COMPLEX, BHUYANGDEV CROSS ROAD, SOLA ROAD, GHATLODIA, AHMEDABAD - 380 061, GUJARAT STATE, INDIA. 3. I SAY T HAT I HAVE NO OBJECTION IF THE RIGHTS OF THE TRADE MARK IN RESPECT OF THE ABOVE SAID APPLICATION IS TRANSFERRED IN THE NAME OF M/S. TRIO ELEVATORS COMPANY (INDIA) LTD., HAVING ITS REGISTERED OFFICE AT 404, SHIVAM COMPLEX, BHUYANGDEV CROSS R OAD, SOLA ROAD, GHATLODIA, AHMEDABAD - 380 061, GUJARAT STATE, INDIA 4. I SUBMIT THAT THE ABOVE APPLICATION IS MADE FOR CHANGE IN THE NAME OF THE REGISTERED PROPRIETOR. I ALSO STATE THAT NO LITIGATION IN RESPECT OF THE SAID SUBJECT MATTER OF TRADEMARK IS PENDING IN ANY C OURT OR TRIBUNAL. 5. THIS AFFIDAVIT IS THEREFORE SWORN TO CARRYOUT NECESSARY CHANGES IN THE NAME OF REGISTERED PROPRIETOR ON RECORD WITH THE TRADE MARK REGISTRY. WHAT IS STATED ABOVE IS TRUE TO THE BEST OF MY KNOWLEDGE, INFORMATION AND BE LIEF . 8 . THE BENEFICIAL OWNERSHIP OF THE TRADEMARK CANNOT THERE FORE BE IN ANY DISPUTE, INASMUCH AS ADMITTEDLY THE FORMER OWNER OF THE REGISTERED TRADEMARK HAD ASSIGNED ALL HIS RIGHTS, AS SEEN ABOVE, AND THE ASSESSEE WAS CARRYING ON THE BUSINESS IN THAT NAME. THE ENTIRE BUSINESS WAS TRANSFERRED TO THE ASSESSEE AS A GOING CONCERN AND THE ASSESSEE WAS, EFFECTIVE 7 TH SEPTEMBER 2006, CONDUCTING THE BUSINESS AS SUCH. ONCE THE ASSESSEE WAS CARRYING ON THE BUSINESS AS SUCH UNDER THE SAME TRADEMARK AND AS A GOING CONCERN, THE EFFECTIVE USE OF THE TRADEMARK CANNOT BE DISPUTED. THIS INTANGIBLE ASSET WAS AN INTEGRAL PART OF THE BUSINESS CARRIED ON BY THE ASSESSE E , AND, BY NO STRETCH OF LOGIC, IT COULD BE SEEN I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 7 OF 8 IN ISOLATION WITH THE BUSINESS AS A WHOLE. THE FACT THAT THE TRAD EMARK WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE DID NOT AFFECT ASSESSEE S VALUABLE RIGHTS, AS NOTED BY HON BLE SUPREME COURT ABOVE, THAT NONE ELSE CAN PASS OFF THE GOODS OR SERVICES UNDER THE PRETENCE THAT IT BELONGED TO THE TRADEMARK OWNED BY THE ASS ESSEE. EVEN IN THE CASE OF THE UNREGISTERED TRADE MARK, THUS, THE ASSES SEE DOES HAVE VALUABLE RIGHTS WHICH MAKE IT AN INTANGIBLE ASSET ELIGIBLE FOR DEPRECIATION . IN ANY EVENT, THE ADMISSIBILITY OF DEPRECIATION ON TRADEMARK IS NOT C ONTINGENT UPON ITS REGIS TRATION INASMUCH AS THE DESCRIPTION OF INTANGIBLE ASSET IN PART B OF THE DEPRECATION SCHEDULE DESCRIBES THE SAME MERELY AS K NOW - HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE . T HE ONLY THING THAT THE ASSESSEE DID NOT HAVE RIGHT FOR, AS THE TRADEMARK WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE AT THAT POINT OF TIME, WAS THE RIGHT TO OBTAIN RELIEF IN RESPECT OF INFRINGEMENT OF THE TRADE MARK IN THE MANNER PROVIDED BY THE ACT, BUT T HEN THIS LIMITATION OF RIGHT WAS ONLY TRANSITORY AS THE PROCESS OF TRANSFER OF TRADEMARK WAS ALREADY INITIATED. 9. WE HAVE NOTED THAT THE LEARNED CIT(A) HAS RAISED AN ISSUE ABOUT THE TRADEMARK NOT BEING ACTUALLY USED BY THE ASSESSEE. IT IS DIFFICULT TO U NDERSTAND, MUCH LESS APPROVE , HIS INFERENCE. WHEN THE BUSINESS IS TRANSFERRED ON A GOING CONCERN BASIS AND THE TRADEMARK IS AN INTEGRAL PART OF THE BUSINESS TRANSFERRED, AND THE ASSESSEE HAS CARRIED ON THE BUSINESS AS SUCH, THERE IS NO REASON TO EVEN SUSPE CT, MUCH LESS INFER, THAT THE TRADEMARK WAS NOT IN USE. IN ANY CASE, IT WAS NOT THE CASE OF THE ASSESSING OFFICER NOR WAS THE ASSESSEE PUT TO NOTICE IN THIS RESPECT EVEN IN THE APPELLATE PROCEEDINGS. WE ARE UNABLE TO SEE ANY LEGALLY SUSTAINABLE MERITS ON THIS OBJECTION EITHER. THERE HAS ALSO NOT BEEN ANY DISPUTE WITH REGARD TO VALUATION OF THE TRADEMARK AND THE VALUATION IS SUPPORTED BY A VALUER S REPORT. 10. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CO NSIDERED VIEW THAT THE ASSESSEE WAS INDEED ELIGIBLE FOR DEPRECIATION IN RESPECT OF THE INTANGIBLE ASSET BY WAY OF TRADEMARK. THE I.T.A. NO 2477/AHD/ 20 11 ASSESSMENT YEAR: 2007 - 08 PAGE 8 OF 8 ASSESSING OFFICER IS, THEREFORE, DIRECTED TO GRANT THE DEPRECIATION ON THE TRADEMARK. THE ASSESSEE GETS THE RELIEF ACCORDINGL Y. 11. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 8 TH DAY OF MARCH, 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD. DATED 8 TH DAY OF MARCH , 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES , AHMEDABAD