Appeal details
Counselvise Citation
357119914 RSA 2011
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-03-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
G
Assessment Year
2007-2008
Appeal Filed On
04-05-2011
Judgement Text
WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI G GG G BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI J SUDHAKAR REDDY, J SUDHAKAR REDDY, J SUDHAKAR REDDY, J SUDHAKAR REDDY, AM AMAM AM & & & & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ITA NO. ITA NO. ITA NO. ITA NO. 3571/MUM/2011 3571/MUM/2011 3571/MUM/2011 3571/MUM/2011 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2007 2007 2007 2007- -- -08 0808 08) )) ) THE DY COMMR OF INCOME TAX 1(1), OSD, MUMBAI VS WEIZMANN FOREX LTD EMPIRE HOUSE 214 DR D N ROAD, ENT A K NAYAK MARG MUMBAI 400 001 (APPELLANT (APPELLANT (APPELLANT (APPELLANT ) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO. AAAC2468H AAAC2468H AAAC2468H AAAC2468H ASSESSEE BY SH VIJAY MEHTA REVENUE BY SH A K NAYAK DT.OF HEARING 1 ST MARCH 2012 DT OF PRONOUNCEMENT 30 TH , MARCH 2012 ORDER ORDER ORDER ORDER PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , JM JMJM JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 17.3.2011 OF THE CIT(A) FOR THE AY 2007-08. 2 THE REVENUE HAS RAISED THE ONLY GROUND IN THIS AP PEAL IS AS UNDER: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF DEPREC IATION OF RS. 68,87,500/- CLAIMED U/S 32(1)(II) OF THE ACT. 3 THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS O F DEALING IN FOREIGN EXCHANGE, MONEY TRANSFER AND WIND POWER GENERATION ETC. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAD ACQUIRED FR ANCHISE FROM AFL PVT LTD (ALF) VIDE AGREEMENT DATED 9.1.2007 FOR A CONSIDERA TION OF RS. 5.51 CRORES. THE ASSESSEE CLAIMED DEPRECATION @ 25% (12.5 % ON FOR H ALF YEARLY) ON THE SAID AMOUNT U/S 32(1)(II) OF THE ACT. THE ASSESSING OFFI CER ASKED THE ASSESSEE TO WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 2 JUSTIFY THE CLAIM OF DEPRECIATION ON THE INTANGIBLE ASSETS. THE ASSESSEE, VIDE LETTER DATED 19.1.2009 HAS FURNISHED ITS ELABORATE REPLY. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND D ISALLOWED THE CLAIM OF DEPRECIATION ON INTANGIBLE ASSETS. 3.1 ON APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF KOTAK FOREX BROKERAGE LTD VS ACIT REPORTED IN 33 SOT 237. 4 BEFORE US, THE LD DR HAS SUBMITTED THAT THIS IS A CASE OF TRANSFER OF ON- GOING CONCERN TO ANOTHER ON-GOING CONCERN AND NOT M ERELY A TRANSFER OF INTANGIBLE ASSETS. AFL HAD TRANSFERRED ITS ENTIRE N ETWORK TO THE ASSESSEE FOR WHICH NO VALUATION HAS BEEN DONE. THE LD DR HAS SU BMITTED THAT THE ENTIRE CONSIDERATION FOR ACQUIRING THE NETWORK ALSO INCLUD ES THE PAYMENT FOR NON- COMPETE FEE. HOWEVER, THE ASSESSEE HAS NOT SHOWN A NY BIFURCATION OF THE CONSIDERATION PAID FOR NON-COMPETE FEE TO AFL. THE LD DR HAS FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAS ACQUIRED ONLY THE NETWO RK AND NOT NAME OF THE SELLER; THEREFORE, NO PAYMENT HAS BEEN MADE FOR GOO DWILL AS IT WAS IN THE CASE OF KOTAK FOREX BROKERAGE LTD, RELIED UPON BY THE CIT(A ). HE HAS FURTHER SUBMITTED THAT AS PER THE CLAUSE 2.3 OF THE TRANSFER AGREEMEN T, WHAT WAS TRANSFERRED TO THE ASSESSEE WAS RIGHT TO HAVE AGREEMENT WITH THE SUB-R EPRESENTATIVE OF AFL WHICH THE ASSESSEE CANNOT ENFORCE AGAINST THE SUB-REPRESE NTATIVE. 4.1 THE LD DR HAS REFERRED CLAUSE 2.6 OF THE AGREEM ENT AND SUBMITTED THAT WESTERN UNION MONEY TRANSFER, BEING A THIRD PARTY AND BENEFICIARY MAY TAKE ANY ACTION AS NECESSARY OR APPROPRIATE TO PROTECT I TS INTEREST/RIGHTS AND THE ASSESSEE WOULD HAVE NO RIGHT TO OBJECT THE SAME ON LACK OF PRIVITY. THUS, THE LD DR HAS SUBMITTED THAT IT IS NOT A TRANSFER OF FRANC HISE OR LICENSE BUT THE ENTIRE WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 3 BUSINESS IS PURCHASED BY THE ASSESSEE AND THERE WAS NO SEPARATE INTANGIBLE ASSETS, WHICH HAS BEEN TRANSFERRED; THEREFORE, NO D EPRECIATION IS ALLOWABLE. HE HAS FURTHER STRESSED THE POINTS THAT AS PER TERMS O F THE AGREEMENT, THE ASSESSEE, AT THE MOST EXECUTE THE AGREEMENT WITH SUB REPRESEN TATIVE ONLY ON CLOSING AND OVER A PERIOD OF SIX MONTHS; THEREFORE, NOTHING WAS TRANSFERRED DURING THE YEAR UNDER CONSIDERATION. HE HAS RELIED UPON THE ORDER O F THE ASSESSING OFFICER. 4.2 ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HA S REFERRED THE PROVISIONS OF SEC. 32(1)(II) OF THE I T ACT AND SUBMITTED THAT TH E DEPRECIATION IS ALLOWABLE ON ANY BUSINESS OR COMMERCIAL RIGHTS. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE ACQUIRED THE COMMISSION BUSINESS RIGHTS OF SIMILAR NATURE VIDE TRANSFER AGREEMENT DT 9.1.2007. THE LD AR HAS REFERRED BY VA RIOUS CLAUSES OF THE AGREEMENT AND SUBMITTED THAT AS PER CLAUSE A & B OF THE RECITAL OF THE AGREEMENT, THE ASSESSEE AND AFL ARE THE REPRESENTAT IVES OF WESTERN UNION NETWORK AND ALSO HAVING SUB REPRESENTATIVE IN RESPE CT OF THE BUSINESS OF MONEY TRANSFER. THE LD AR HAS FURTHER POINTED OUT THAT B Y VIRTUE OF TRANSFER AGREEMENT, THE ASSESSEE REPLACES AFL BEING THE REPRESENTATIVE OF WESTERN UNION AND ACQUIRED THE NETWORK OF SUB REPRESENTATIVE OF AFL. HE HAS REFERRED TO CLAUSE 1.1 OF THE AGREEMENT WHICH CONTAINS THE DEFINITION OF A SSET AND SUBMITTED THAT THE ASSETS WHICH ARE SUBJECTED TO TRANSFER BETWEEN THE PARTIES ARE DESCRIBED IN THE AGREEMENT. THE LD AR HAS SUBMITTED THAT BASICALLY THE ASSESSEE HAS ACQUIRED THE AGREEMENT WITH THE SUB REPRESENTATIVE WHICH IS A MARKETING NETWORK OF BUSINESS OF MONEY TRANSFER. THE LD AR HAS POINTED T HAT THERE IS NO DISPUTE ON THE POINT THAT THE ASSESSEE HAS NOT CLAIMED PURCHASE OF ANY GOODWILL; THEREFORE, THERE IS NO PAYMENT FOR GOODWILL. HE HAS CONTENDED THAT WHEN THE AGREEMENT IS SALIENT ON A POINT, THEN NOTHING CAN BE READ INTO T HE AGREEMENT. HE HAS RELIED WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 4 UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF VODAFONE INTERNATIONAL HOLDINGS B. V. V. UNION OF INDIA REPORTED IN 341 ITR 001. 4.3 THE LD AR HAS OBJECTED TO THE QUESTION RAISED B Y THE LD DR ON THE POINT OF VALUATION FIRST TIME AT THIS STAGE. HE HAS SUBMIT TED THAT THE ISSUE OF VALUATION WAS NOT RAISED BY THE ASSESSING OFFICER AND HENCE, IT CANNOT BE RAISED FIRST TIME AT THIS STAGE BEFORE THE TRIBUNAL. NO SEPARATE VA LUATION OR AMOUNT AGREED BETWEEN THE PARTIES FOR NON-COMPETE FEE AND THE CON SIDERATION IS A COMPOSITE AMOUNT AND TRANSFER AGREEMENT IS ALSO A COMPOSITE A GREEMENT. THE LD AR REFERRED THE OBSERVATIONS AT PAGE 249 OF THE DECISI ON OF THE SUPREME COURT IN THE CASE OF VODAFONE INTERNATIONAL HOLDINGS B. V (S UPRA) IN SUPPORT OF HIS CONTENTION. IT HAS BEEN SUBMITTED BY THE LD AR TH AT ALL THE SUB REPRESENTATIVES OF AFL BECAME SUB REPRESENTATIVES OF THE ASSESSEE B ECAUSE OF THE TRANSFER OF THE FRANCHISE AND LICENSE. HE HAS DRAWN OUR ATTENT ION TO CLAUSE 2.3 OF THE AGREEMENT AND SUBMITTED THAT THE ASSESSEE ACQUIRED THE MARKETING NETWORK AND INFRASTRUCTURE THROUGH WHICH THE ASSESSEE WILL DO T HE BUSINESS AND EARN INCOME. 4.4 THE LD AR OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF ITO(OSD) VS MEDICORP TECHNO LOGIES INDIA LTD REPORTED IN 30 SOT 506(CHENNAI) AND POINTED OUT THAT THE ASSES SEES CASE IS ON A BETTER FOOTING THAN THE CASE OF BECAUSE THERE WAS NO PAYM ENT FOR NON COMPETE FEE IN THE CASE OF THE ASSESSEE WHEREIN IN THE SAID CASE, 25% OF THE PAYMENT WAS FOR NON COMPETE FEE AND THE TRIBUNAL ALLOWED THE DEPREC IATION ON THE ENTIRE CONSIDERATION BEING PAID FOR COMPOSITE BUSINESS/COM MERCIAL RIGHTS. REFERRING TO THE FINDING OF THE TRIBUNAL IN THE SAID CASE OF MED ICORP TECHNOLOGIES INDIA LTD (SUPRA), THE LD AR HAS SUBMITTED THAT DIMINUTION IN VALUE OF ASSETS IS NOT TOUCHSTONES FOR ADMISSIBILITY OF DEPRECIATION U/S 32 OF THE ACT. HE HAS RELIED WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 5 UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF SKYL INE CATERERS P LTD VS ITO REPORTED IN 20 SOT 266(MUM). IN THE SAID CASE, THO UGH THE ASSESSEE RECORDED THE PAYMENT OF RS. 27 LACS AS GOODWILL IN THE BALAN CE SHEET; HOWEVER, THE TRIBUNAL HELD THAT MERELY BECAUSE THE ASSESSEE SHOW ED THE SAID PAYMENT ON ACCOUNT OF GOODWILL IN THE BOOKS OF ACCOUNT, NO ADV ERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE. IT WAS HELD THAT THE PAYMEN T WAS FOR ACQUIRING ALL THE BUSINESS RIGHTS UNDER THE CATERING CONTRACT BETWEEN R AND HLL WHICH IS ELIGIBLE FOR DEPRECIATION BEING ON BUSINESS OR COMMERCIAL RI GHTS. 4.5 THE LD AR HAS ALSO RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. HINDUSTAN COCO COLA B EVERAGES P. LTD. REPORTED IN 331 ITR 192 AND SUBMITTED THAT THE HONBLE DELHI HIGH COURT HAS OBSERVED THAT THE MEANING OF BUSINESS OR COMMER CIAL RIGHTS OF SIMILAR NATURE HAS TO BE UNDERSTOOD IN THE BACKDROP OF SECT ION 32(1)(II) OF THE ACT AND SUCH RIGHTS WHICH ARE OBTAINED FOR CARRYING ON THE BUSINESS WITH EFFECTIVENESS IS LIKELY TO FALL OR COME WITHIN THE SWEEP OF MEANING OF INTANGIBLE ASSET 4.6 THE LD AR HAS ALSO REFERRED THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. ELECON ENGINEERING CO. LTD. REPORTED IN 96 ITR 672 AND SUBMITTED THAT THE SAID DECISION HAS BEEN UPHELD BY THE HONBLE SUPREME COURT IN 166 ITR 66. THE HONBL E HIGH COURT HAS OBSERVED THAT DEPRECIATION U/S 32 IS A STATUTORY ALLOWANCE N OT CONFINED EXPRESSLY TO DIMINUTION IN VALUE OF THE ASSET BY REASON OF WEAR AND TEAR. 4.7 THE LD AR HAS FURTHER SUBMITTED THAT THE OBJECT ION RAISED BY THE LD DR IS NOT RELEVANT IN RESPECT OF THIRD PARTY BENEFICIARY AND ENFORCEABILITY OF THE AGREEMENT AGAINST THE SUB REPRESENTATIVE BECAUSE TH E CONDITION FOR ALLOWABILITY WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 6 OF DEPRECIATION IS THE ACQUISITION AND USE OF ASSE T AND NOT THE VULNERABILITY OF IT TO OUTSIDE FORCE. 5 IN REBUTTAL, THE LD DR HAS SUBMITTED THAT PRINCIP LE OF EJUSDEM GENERIS IS APPLICABLE AND THEREFORE, ANY TANGIBLE ASSET IN THE NATURE OF THE RIGHTS SIMILAR TO PATENTS, LICENSE ETC, IS ELIGIBLE FOR DEPRECIATION AS PER SEC. 32(1)(II) OF THE ACT. HE HAS FURTHER SUBMITTED THAT THE OBSERVATION MADE IN THE CASE OF VODAFONE (SUPRA) ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE BECA USE IN THE SAID CASE, THE REVENUE WANTED TO ASSESS THE INCOME WHEREAS IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS CLAIMED DEPRECIATION ON INTANGIBLE ASS ET. THEREFORE, THE ASSESSEE HAS TO ESTABLISH THE CLAIM AND THE ONUS IS NOT ON T HE REVENUE TO ESTABLISH OTHERWISE. HE HAS REITERATED THE SUBMISSIONS THAT THE ASSESSEE CLAIMED DEPRECIATION ON ALL THE RIGHTS AND NOT ON THE FRANC HISE RIGHT. THE LD DR HAS SUBMITTED THAT THE DECISION IN THE CASE OF MEDICORP TECHNOLOGIES INDIA LTD (SUPRA) IS NOT APPLICABLE IN THE CASE IN HAND BECAU SE THE ASSESSEE IS NOT HAVING ANY RIGHT TO SUE WHEREAS IN THE SAID CASE, THE RIGH T TO SUE WAS GIVEN UNDER THE AGREEMENT. 6 WE HAVE CONSIDERED THE RIVAL CONTENTION AS WELL A S THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE ACQUIRED CERTAIN ASSETS AS PER THE DEFINITION GIVEN IN THE CLAUSE 1.1 OF THE AGREEMENT IN THE NATURE OF PE NDING CONTRACTS, LICENSES, FRANCHISES, DISTRIBUTION NETWORK, CUSTOMER LISTS, M ARKETING STRATEGIES AND SOFTWARE ETC., RELATING TO WESTERN UNION BUSINESS V IDE AGREEMENT OF TRANSFER DATED 9.1.2007. 6.1 THE FIRST CONTENTION OF THE LD DR IS THAT THE A SSESSEE HAS NOT ACQUIRED ANY PARTICULAR ASSET BUT IT IS A CASE OF TRANSFER OF A ON-GOING CONCERN. WE DO NOT FIND WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 7 THIS CONTENTION OF THE LD DR IS SUPPORTED BY FACTS OF THE CASE. CLAUSE (B) OF RECITAL OF THE AGREEMENT SPECIFIED THE BUSINESS OF AFL AS U NDER (B). THE TRANSFEROR AMONGST THEIR OTHER BUSINESSES AMONGST THEIR OTHER BUSINESSES AMONGST THEIR OTHER BUSINESSES AMONGST THEIR OTHER BUSINESSES IS ALSO ENGAGED IN OFFERING WESTERN UNION BRANDED MONEY TRANSFER SERVI CE IN INDIA AS ONE OF THE REPRESENTATIVES OF WESTERN UNION. THE TRANSFERO R ALSO POSSESSES THE NECESSARY APPROVALS FROM RESERVE BANK OF INDIA TO O FFER SUCH MONEY TRANSFER SERVICE. 6.2 IT IS CLEAR FROM THE STARTING WORD OF THE CLAUS E (B) THAT MONEY TRANSFER SERVICES IS ONE OF THE VARIOUS BUSINESSES OF AFL A ND NOT THE SOLE AND ONLY BUSINESS. 6.3 SIMILARLY, CLAUSE (C) OF THE RECITAL OF THE AGR EEMENT CONTAINS THE SUBJECT MATTER OF TRANSFER BETWEEN THE PARTIES AS UNDER: ( C). THE TRANSFEROR HAS AGREED TO ASSIGN AND TRAN SFER AND THE TRANSFEREE HAS AGREED TO PURCHASE AND ACQUIRE THE LICENSES AND FRANCHISES CONSISTING OF REPRESENTATION AGREEMENT EXECUTED WITH WESTERN U NION FACILITATING THE TRANSFEROR TO FUNCTION AS ONE OF THE REPRESENTATIVE S OF WESTERN UNION OFFERING WESTERN UNION MONEY TRANSFER SERVICE BUSIN ESS (AS DEFINED HEREINAFTER) AND THE SUB REPRESENTATION AGREEMENTS EXECUTED BETWEEN THE TRANSFEROR AND THE SUB REPRESENTATIVES TO ENABL E THE SAID SUB REPRESENTATIVES TO FUNCTION AS THE REPRESENTATIVES OF THE TRANSFEROR IN THE MATTER OF OFFERING WESTERN UNION MONEY TRANSFER SER VICES. 6.4 IT IS CLEAR FROM THE ABOVE TWO CLAUSES (B) & (C ) THAT WHAT WAS TRANSFERRED BY AFL AND ACQUIRED BY THE ASSESSEE IS (I) LICENSE AND FRANCHISEE CONSISTING OF REPRESENTATIVE AGREEMENT WITH WESTERN UNION HELD BY AFL (II) SUB REPRESENTATIVE AGREEMENT WITH AFL AND SUB REPRESENTATIVE IN RESPE CT OF THE BUSINESS OF WESTERN UNION MONEY TRANSFER SERVICES. IN THIS WAY , AFL TRANSFERRED ITS RIGHTS OF BUSINESS AND BUSINESS NETWORK WITH RESPECT TO THE M ONEY TRANSFER BUSINESS BEING THE REPRESENTATIVE OF THE WESTERN UNION NETWO RK. IT IS CLEAR THAT IT IS NOT THE CASE OF ENTIRE ON GOING CONCERN I.E AFL OR ITS BRAND NAME; BUT ONLY BUSINESS RIGHTS IN RESPECT OF ONE OF ITS VARIOUS BUSINESSES. WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 8 7 THE SECOND OBJECTION OF THE LD DR IS VALUATION OF INTANGIBLE ASSETS AND NON-COMPETE FEE. 7.1 IT IS PERTINENT TO NOTE THAT THERE IS NO AVERME NT IN THE AGREEMENT FOR SUCH TRANSACTION OF GOODWILL OR ANY CONSIDERATION FOR NO N-COMPETE FEE. FURTHER, NO SUCH CLAIM IS MADE BY THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO NOT DOUBTED THE CONSIDERATION PAID FOR ACQUIRING THE BUSINESS A SSETS AND NOT FOR GOODWILL IN PARA 5 OF THE ASSESSMENT AS UNDER: 5. THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED B UT NOT FOUND ACCEPTABLE FOR THE REASONS MENTIONED HEREIN BELOW:. I) THE SAID AGREEMENT IS FOR PURCHASE OF DEALERSHIP NETWORK WHICH DEFINITELY IS A ADVANTAGE OF ENDURING NATURE. THE A DVANTAGE DOES NOT SHOW WEAR & TEAR WITH THE EFFLUX OF TIME WHICH IS ONE OF ESSENTIAL PREREQUISITES FOR CLAIMING DEPRECATION. I T IS POSSIBLE THAT THE ASSESSEE MAY SELL HIS DISTRIBUTION NETWORK A HI GHER PRICE. IN BUILT IN THIS ASSET IS ITS CAPACITY TO APPRECIATE. II) THIS ASSETS IT MAY BE CLARIFIED IS NOT THE PURC HASE OF GOODWILL. THE ASSESSEE IS NOT UTILIZING THE NAME OF AFL FOR ITS B USINESS ENDS. IN FACT THE ASSESSEE AFTER A CERTAIN TRANSITION PERIOD WOULD START USING HIS OWN NAME ON THE NETWORK ACQUIRED FROM AFL. FURT HER, THE ASSESSEE HAS IN HIS BOOKS OF ACCOUNT HAS NOT TREATE D THE SAID AMOUNT AS GOODWILL. IN VIEW OF THESE FACTS, THE CAS E LAW CITED BY THE ASSESSEE PERTAINING TO M/S KOTAK FOREX BROKERAGE LT D VS ACIT 33 SOT 237 IS DISTINGUISHABLE. 7.2 IT IS CLEAR FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS ACCEPTED THAT THE ASSESSEE ACQUIRED THE DEALERSHIP NETWORK WHICH DEFINITELY IS AN ADVANTAGE OF ENDURING NATURE BUT DENIED THE CLAI M OF DEPRECIATION ON THE GROUND THAT SUCH ADVANTAGE DOES NOT SUFFER AND WEAR & TEAR. 7.3 IT IS PERTINENT TO MENTION AT THIS STAGE THAT I N THE CASE OF INTANGIBLE ASSET PHYSICAL WEAR & TEAR IS NOT NECESSARY AND ALSO NOT REQUIRED FOR ALLOWING THE CLAIM OF DEPRECIATION U/S 32(1)(II). FURTHER, NO SUCH CON DITIONS IS PROVIDED UNDER THE PROVISIONS OF THE ACT THAT DEPRECATION ON INTANGIB LE ASSET IS ALLOWABLE ONLY IF WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 9 THERE IS WEAR & TEAR IN THE VALUE. THE CHENNAI BEN CH OF THE TRIBUNAL IN THE CASE OF MEDICORP TECHNOLOGIES INDIA LTD (SUPRA) IN PARA 15.3 AND 15.4 HAS HELD AS UNDER: 15.3 THE ABOVE EXAMPLES, SHOW THAT THE PROVISIONS O F S. 32 DO NOT NECESSARILY FOLLOW THE TRADITIONAL CONCEPT OF AN A SSET, AND AN ACCOUNTANTS APPROACH TO DEPRECIATION. IN FACT, T HE TAXATION LAWS ARE KNOWN TO HAVE BEEN USED AS A TOOL FOR IMPLEMENTING THE ECONOMIC/FISCAL POLICIES OF THE STATE. 15.4 IT BECOMES CLEAR FROM THE ABOVE DISCUSSION THA T CAPABILITY TO HAVE A MARKET VALUE, ASSIGNABILITY, TRANSFERABILITY, DIMIN UTION IN VALUE, ARE NO MORE THE TOUCH STONES ON WHICH THE ADMISSIBILITY FOR DEPRECIATION UNDER S. 32 OF THE ACT HAS TO TESTED. WE ARE LIVING IN TH E COMMERCIAL WORLD OF E- BANKING, E-COMMERCE, AND E-GOVERNANCE; THE OLD , ARCHAIC, TRADITIONAL CONCEPTS HAVE UNDERGONE A SEA CHANGE, AND OUR LAW- MAKERS HAVE TRULY KEPT PACE WITH THE CHANGE. THEREFORE, IN THE CASE OF INTANGIBLE ASSET BEING CO MMERCIAL/BUSINESS RIGHTS DIMINUTION IN VALUE OR PHYSICAL WEAR AND TEAR IS NO T AN ESSENTIAL CONDITION FOR ADMISSIBILITY FOR DEPRECIATION U/S 32, IF THE ASSET S USED AS A BUSINESS TOOL FOR EARNING THE INCOME. 8 THE THIRD ARGUMENT OF THE LD DR IS REGARDING THE ASSESSEE HAVING NO RIGHT TO SUE THE THIRD PARTY ESPECIALLY WESTERN UNION AND SUB REPRESENTATIVE AND THE TRANSFER AGREEMENT CANNOT BE ENFORCED AGAINST THEM. 8.1 IT IS TO BE NOTED THAT THE AGREEMENT IS ENFORCE ABLE AGAINST THE PARTIES TO THE AGREEMENT. IF A RIGHT HAS BEEN ACQUIRED UNDER A N AGREEMENT BY ONE PARTY FROM THE OTHER PARTY, THEN THE SAID RIGHT IS LEGALL Y ENFORCEABLE AS PER THE TERMS OF THE AGREEMENT AGAINST THE PARTY TO THE AGREEMENT AS WELL AS AGAINST THE OUTER WORD SO FAR AS THE LEGALITY AND ENJOYMENT OF THE RI GHT HAVING PURCHASED UNDER THE AGREEMENT IS CONCERNED. THEREFORE, THERE IS NO GAIN SAYING THAT THE AGREEMENT IS NOT ENFORCEABLE AGAINST THE THIRD PAR TY. WHEN THE PARTIES TO THE AGREEMENT CAN OTHERWISE ENFORCE AGREEMENT AGAINST E ACH OTHER AND HAVE LEGAL WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 10 REMEDY IN CASE OF BREACH OF TERMS AND CONDITIONS BY EITHER OF THE PARTIES, THEN THIS OBJECTION RAISED BY THE LD DR HAS NO LEG TO ST AND. THE CLAUSE 14 OF THE AGREEMENT IS AN ABERRATION CLAUSE AND THEREFORE, IN CASE OF ANY DISPUTE BETWEEN THE PARTIES, THE SAME WOULD BE RESOLVED THROUGH ARB ITRATION. 9 THE NEXT CONTENTION OF THE LD DR IS NON CONCLUSI ON OF TRANSFER UNDER THE AGREEMENT AS IT WOULD BE ON CLOSING DAY. 10 WE FIND THAT UNDER CLAUSE 1.1 OF THE AGREEMENT, CLOSING DATE SHALL BE 14.1.2007 OR SUCH OTHER DAY AS MAY BE MUTUALLY AGRE ED BY THE PARTIES. IN THE ABSENCE OF ANY OTHER DATE AND IN VIEW OF THE FACT T HAT THE AGREEMENT WAS CONCLUDED AND EXECUTED WITHOUT ANY TERM, REMAIN UNF ULFILLED, THEN WE DO NOT FIND ANY MERIT IN THIS ARGUMENT OF THE LD DR. 10.1 MOREOVER, THE DENIAL OF THE CLAIM OF DEPRECIAT ION BY THE ASSESSING OFFICER IS ON THE GROUND OF NON WEAR AND TEAR OF ASSETS WIT HOUT DISPUTING THE TRANSFER AS SUCH. 11 NOW, WE TURN TO THE ISSUE OF ALLOWABILITY OF DEP RECIATION ON THE CONSIDERATION IN QUESTION PAID BY THE ASSESSEE. AS MENTIONED IN CLAUSE (C) OF THE RECITAL OF THE AGREEMENT, THE ASSESSEE PURCHASED R IGHTS VESTED WITH AFL WITH REGARD TO THE FRANCHISE/LICENSE OF DOING BUSINESS O F MONEY TRANSFER SERVICES BEING THE REPRESENTATIVE OF WESTERN UNION NETWORK I NCLUDING RIGHTS OF AFL, QUA SUB REPRESENTATIVE. AFTER THE TRANSACTION OF TRANS FER THE ASSESSEE ACQUIRED THE RIGHT TO BECOME REPRESENTATIVE OF WESTERN UNION IN PLACE OF AFL AND CONSEQUENTLY TO DEAL WITH AND TO DO THE BUSINESS TH ROUGH THE SUB REPRESENTATIVE EARLIER WORKING WITH AFL. IN THIS WAY, THE ASSESSEE GETS THE RIGHTS TO HAVE ACCESS WITH THE MARKETING NETWORK CONSISTING OF SUB REPRES ENTATIVE HAVING WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 11 INFRASTRUCTURE, CUSTOMER LISTS, MARKETING STRATEGIE S ETC. HENCE, BY VIRTUE OF AGREEMENT OF TRANSFER, THE ASSESSEE ACQUIRED THE RI GHTS TO AVAIL THE INFRASTRUCTURE OF THE NETWORKING EARLIER AVAILABLE TO AFL FOR DOING THE BUSINESS OF MONEY TRANSFER BEING REPRESENTATIVE OF WESTERN UNIO N. THIS RIGHT HAS BEEN UNDERSTOOD BY THE PARTIES AS EXPLAINED IN THE DEFIN ITION OF ASSET UNDER CLAUSE 1.1 OF THE AGREEMENT AS UNDER: 1.1. DEFINITIONS. UNLESS OTHERWISE DEFINED IN THIS AGREEMENT, THE FOLLOWING CAPITALISED TERMS SHALL BE USED IN THIS AGREEMENT W ITH THE FOLLOWING MEANINGS: AGREEMENT SHALL MEAN THIS AGREEMENT FOR TRANSFER OF NECESSARY LICENSES AND FRANCHISES OFFERING WESTERN UNION MONE Y TRANSFER SERVICE AND ALL SCHEDULES, ANNEXES AND AMENDMENTS H ERETO. ASSETS SHALL MEAN ALL OF THE TRANSFERORS ASSETS RELATING TO THE WESTERN UNION MONEY TRANSFER SERVICE BUSINESS V IZ.: (I) ANY AND ALL PENDING CONTRACTS, LICENSES AND FRA NCHISES AS DETAILED IN SCHEDULE I ANNEXED HERETO; (II) THE DISTRIBUTION NETWORK, CUSTOMER LISTS, MARK ETING STRATEGIES, AND SOFTWARE, IF ANY, (III) SERVICES OF ALL OF THE COMPANY PERSONNEL ATTA CHED TO THE WESTERN UNION MONEY TRANSFER SERVICE OF TRANSFEROR AS DETAILED IN SCHEDULE 2 ANNEXED HERETO. THE DEFINITION OF THE ASSET WHICH IS A SUBJECT MATT ER OF THE TRANSFER CONSISTS OF ALL CONTRACT, LICENSES, FRANCHISES, DISTRIBUTION NETWOR K, CUSTOMER LISTS, MARKETING STRATEGIES AND SOFTWARE ETC., RELATING TO WESTERN UNION BUSINESS. THUS, THE TRANSFER INVOLVES A COMPOSITE ASSET INCLUDING ALL R IGHTS RELATING TO WESTERN UNION BUSINESS WHICH CERTAINLY A BUSINESS/COMMERCIAL RIGH TS HAVING AN ENDURING BENEFIT TO THE ASSESSEE AS ADMITTED BY THE ASSESSIN G OFFICER. 12 IN THE CASE OF SKYLINE CATERERS P LTD (SUPRA), T HE TRIBUNAL HAS DEALT WITH THE ISSUE OF ALLOWABILITY OF DEPRECIATION OF INTANG IBLE ASSETS IN PARA 9 AS UNDER: WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 12 9. THE NEXT QUESTION FOR CONSIDERATION IS WHETHER T HE RIGHTS ACQUIRED UNDER THE CONTRACT CAN BE SAID TO BE INTANGIBLE ASS ET WITHIN THE AMBIT OF S. 32(1)(II) WHICH READS AS UNDER : '32. (1) IN RESPECT OF DEPRECIATION OF (I) .................. (II) KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LIC ENCES, FRANCHISES OR ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATU RE, BEING INTANGIBLE ASSETS ACQUIRED ON OR AFTER THE 1ST DAY OF APRIL, 1 998.' THE PERUSAL OF THE ABOVE SHOWS THAT LEGISLATURE HAS SPECIFIED CERTAIN INTANGIBLE ASSETS ON WHICH DEPRECIATION CAN BE CLAI MED NAMELY KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHIS ES. THESE SPECIFIC INTANGIBLE ASSETS ARE FOLLOWED BY THE EXPRESSION 'A NY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE'. THE EXPRESSIO N MENTIONED ABOVE BY ITSELF WOULD INCLUDE ALL KINDS OF COMMERCIAL RIGHTS BUT FOR THE WORDS SIMILAR NATURE. IN SUCH SITUATION, THE RULE OF EJUSDEM GEN ERIS WOULD APPLY. THE SCOPE OF THE RULE IS THAT WORDS OF A GENERAL NATURE FOLLOWING SPECIFIC AND PARTICULAR WORDS SHOULD BE CONSTRUED AS LIMITED TO THINGS WHICH ARE OF THE SAME NATURE AS THOSE SPECIFIED. THE GENERAL WORDS T AKE THE COLOUR FROM THE SPECIFIC WORDS. THE SPECIFIC WORDS IN THE ABOVE SECTION REVEAL THE SIMILARITY IN THE SENSE THAT ALL THE INTANGIBLE ASS ETS SPECIFIED ARE TOOLS OF THE TRADE WHICH FACILITATE THE ASSESSEE CARRYING ON THE BUSINESS. THEREFORE, IN MY OPINION, THE EXPRESSION 'ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE' WOULD INCLUDE SUCH RIGHTS WHICH CAN BE USED AS A TOOL TO CARRY ON THE BUSINESS. IF THIS TEST IS APPLIED, THEN THE RIGHTS ACQUIRED BY THE ASSESSEE UNDER THE AGREEMENT WOULD FALL WITHIN THE EXPRESSION MENTIONED ABOVE, SINCE CATERING BUSINESS AT HLL CANTEEN COULD BE CARRIED ON ONLY WITH THE HELP OF SUCH RIGH TS UNDER THE CONTRACT AND CONSEQUENTLY, THE ASSESSEE WOULD BE ENTITLED TO DEPRECIATION. 12.1 IN THE ABOVE SAID CASE, THE TRIBUNAL HAS HELD THAT THE TERM ANY OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE US ED IN SEC. 32(1)(II) WOULD INCLUDE SUCH RIGHT WHICH CAN BE USED AS TOOL TO CAR RY ON THE BUSINESS. 12.2 SIMILARLY, THE BUSINESS/COMMERCIAL RIGHTS WAS HELD TO BE ELIGIBLE FOR DEPRECIATION BEING INTANGIBLE ASSET LIKE PATENTS, C OPYRIGHTS, LICENSE, FRANCHISE AS HELD BY THE CHENNAI BENCH OF THE TRIBUNAL IN THE CA SE OF MEDICORP TECHNOLOGIES INDIA LTD (SUPRA). WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 13 13 THE HONBLE GUJARAT HIGH COURT IN THE CASE OF E LECON ENGINEERING CO LTD (SUPRA) HAS HELD AT PAGE 709 & 710 AS UNDER: IT IS APPARENT THAT AN ALLOWANCE IN THE NATURE OF D EPRECIATION COULD HAVE BEEN CLAIMED BY THE TAXPAYER IN THOSE CASES ONLY IF THE MACHINERY OR PLANT USED FOR THE PURPOSES OF THE TRADE HAD DIMINISHED I N VALUE BY REASON OF WEAR AND TEAR DURING THE RELEVANT YEAR AND THAT IT WAS FOR THE COMMISSIONERS HAVING JURISDICTION IN THE MATTER TO ALLOW SUCH DEDUCTION AS THEY CONSIDERED JUST AND REASONABLE. IT WAS IN THE LIGHT OF THIS STATUTORY REQUIREMENT AND THE FACTS OF THOSE CASES THAT IT WA S HELD THAT THE CLAIM MADE THERE WAS NOT SUSTAINABLE. HOWEVER, THE POSITI ON IS ENTIRELY DIFFERENT UNDER SECTION 32 OF THE INCOME-TAX ACT. THE DEPRECI ATION ALLOWANCE THEREUNDER IS A STATUTORY ALLOWANCE NOT CONFINED EX PRESSLY TO DIMINUTION IN VALUE OF THE ASSET BY REASON OF WEAR AND TEAR AND T HE ASSESSEE IS THEREUNDER ENTITLED AS OF RIGHT TO THE FULL AMOUNT OF PRESCRIBED ALLOWANCE ONCE THE CONDITIONS LAID DOWN THEREIN ARE SATISFIE D IRRESPECTIVE OF WHETHER THERE HAS IN FACT BEEN ANY DEPRECIATION IN THE VALU E OF THE ASSET BY WEAR AND TEAR OR OTHERWISE. THE ALLOWANCE CAN BE CLAIME D IF THE ASSET IN QUESTION IS SHOWN TO BE CAPABLE OF DIMINISHING IN VALUE ON ACCOUNT OF ANY FACTOR KNOWN TO THE PREVAILING ACCOUNTING OR COMME RCIAL PRACTICE. IT IS NOW A RECOGNISED FACT THAT THE PRINCIPAL FACTORS R ESPONSIBLE FOR THE RETIREMENT OF CAPITAL ASSET AND, THEREFORE, RESPON SIBLE FOR DEPRECIATION ARE : (I) ORDINARY WEAR AND TEAR, (II) UNUSUAL DAMAGE, (III) INADEQUACY, AND (IV) OBSOLESCENCE. THE FACTORS LISTED ABOVE INCLUDE NOT ONLY THOSE RELATING TO PHYSICAL DETERIORATION BUT ALSO THOSE REFERRING TO THE SUITABILITY OF THE ASSET AS AN ECONOMICALLY PRODUCTIVE UNIT AFTER A PERIOD O F TIME. IN DEPRECIATION ACCOUNTING, THE COST OF THE ASSET IS SPREAD OVER TH E YEARS OF ITS USEFULNESS IN A SYSTEMATIC AND SENSIBLE MANNER AND IN SO DOING ALL THE AFORESAID AGENTS OR CAUSES OF DEPRECIATION ARE TAKEN INTO ACC OUNT BEFORE THE TRUE PROFITS ARE ASCERTAINED (VIDE ACCOUNTANCY BY WILLIA M PICKLES, THIRD EDITION, PAGE 168, ACCOUNTANTS HAND BOOK BY DICKSON, FOURTH EDITION, SECTION 17.2 AND PRINCIPLES OF ACCOUNTANCY BY FILNEY AND MILLER, FIFTH EDITION, PAGES 282-90). APART FROM ACCOUNTING PRACTICE OR PRINCIP LES, SECTION 32(1)(III) ITSELF SPEAKS OF ALLOWANCE IN THE CASE OF ANY PLAN T WHICH IS ' DISCARDED ' IN THE PREVIOUS YEAR AND THE WORD ' DISCARDED ' HAS B EEN UNDERSTOOD TO COVER THE CASE OF OBSOLESCENCE. IT APPEARS TO US, THEREFORE, THAT IT WOULD NOT BE CORRECT TO LIMIT THE MEANING OF THE WORD ' PLANT ' IN SECTION 32 TO ONLY SUCH ARTICLES AS ARE CAPABLE OF DIMINUTION IN VALUE YEAR AFTER YEAR BY REASON OF WEAR AND TEAR IN THE COURSE OF THEIR APP LICATION FOR THE PURPOSES OF THE ASSESSEE'S BUSINESS OR PROFESSION. IT WOULD ALSO TAKE IN OTHER ARTICLES WHICH DIMINISH IN VALUE ON ACCOUNT OF OTHE R KNOWN FACTORS SUCH AS OBSOLESCENCE. IT CANNOT BE DISPUTED THAT KNOW-HOW, IN WHATEVER FORM IT MAY BE, IS CAPABLE OF DIMINISHING IN VALUE OVER YEA RS BY OBSOLESCENCE. IT WOULD, THEREFORE, BE INCLUDED WITHIN THE MEANING OF THE WORD PLANT ' IN SECTION 32. 13.1 AS OBSERVED BY THE HONBLE HIGH COURT IN THE A BOVE CASE THE MEANING OF THE WORD ' PLANT ' WOULD NOT BE LIMITED TO THE AR TICLES WHICH ARE CAPABLE OF WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 14 DIMINUTION IN VALUE YEAR AFTER YEAR BY REASON OF WE AR AND TEAR; BUT IT WOULD ALSO TAKE IN OTHER ARTICLES WHICH DIMINISH IN VALUE ON A CCOUNT OF OTHER KNOWN FACTORS SUCH AS OBSOLESCENCE. 14 THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. HINDUSTAN COCO COLA BEVERAGES P. LTD. REPORTED IN 331 ITR 192 (DELHI) H AS HELD IN PARA 24 AS UNDER: 25.IT IS WORTH NOTING THAT THE MEANING OF BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE HAS TO BE UNDERSTOOD IN THE BACKDROP OF SECTION 32(1)(II) OF THE ACT. COMMERCIAL RIGHTS ARE SUCH RIGHTS WHICH AR E OBTAINED FOR EFFECTIVELY CARRYING ON THE BUSINESS AND COMMERCE, AND COMMERCE, AS IS UNDERSTOOD, IS A WIDER TERM WHICH ENCOMPASSES IN IT S FOLD MANY A FACET. STUDIED IN THIS BACKGROUND, ANY RIGHT WHICH IS OBTA INED FOR CARRYING ON THE BUSINESS WITH EFFECTIVENESS IS LIKELY TO FALL OR CO ME WITHIN THE SWEEP OF MEANING OF INTANGIBLE ASSET. THE DICTIONARY CLAUSE CLEARLY STIPULATES THAT BUSINESS OR COMMERCIAL RIGHTS SHOULD BE OF SIMILAR NATURE AS KNOW-HOW, PATENTS, COPYRIGHTS, TRADEMARKS, LICENCES, FRANCHIS ES, ETC. AND ALL THESE ASSETS WHICH ARE NOT MANUFACTURED OR PRODUCED OVER NIGHT BUT ARE BROUGHT INTO EXISTENCE BY EXPERIENCE AND REPUTATION. THEY GAIN SIGNIFICANCE IN THE COMMERCIAL WORLD AS THEY REPRESENT A PARTICULAR BEN EFIT OR ADVANTAGE OR REPUTATION BUILT OVER A CERTAIN SPAN OF TIME AND TH E CUSTOMERS ASSOCIATE WITH SUCH ASSETS. GOODWILL, WHEN APPOSITELY UNDERST OOD, DOES CONVEY A POSITIVE REPUTATION BUILT BY A PERSON/COMPANY/BUSIN ESS CONCERN OVER A PERIOD OF TIME. REGARD BEING HAD TO THE WIDER EXPA NSION OF THE DEFINITION AFTER THE AMENDMENT OF SECTION 32 BY THE FINANCE (N O. 2) ACT, 1998, AND THE AUDITOR'S REPORT AND THE EXPLANATION OFFERED B EFORE THE ASSESSING OFFICER, WE ARE OF THE CONSIDERED OPINION THAT THE TRIBUNAL IS JUSTIFIED IN HOLDING THAT IF TWO VIEWS WERE POSSIBLE AND WHEN T HE ASSESSING OFFICER HAD ACCEPTED ONE VIEW WHICH IS A PLAUSIBLE ONE, IT WAS NOT APPROPRIATE ON THE PART OF THE COMMISSIONER TO EXERCISE HIS POWER UNDER SECTION 263 SOLELY ON THE GROUND THAT IN THE BOOKS OF ACCOUNT IT WAS MENTIONED AS 'GOODWILL' AND NOTHING ELSE. AS HAS BEEN HELD BY TH E APEX COURT IN MALABAR INDUSTRIAL CO. LTD. [2000] 243 ITR 83, MAX INDIA LT D. [2007] 295 ITR 282 (SC) AND CIT V. VIMGI INVESTMENT P. LTD. [2007] 29 0 ITR 505 (DELHI), ONCE A PLAUSIBLE VIEW IS TAKEN, IT IS NOT OPEN TO THE CO MMISSIONER TO EXERCISE THE POWER UNDER SECTION 263 OF THE ACT. 14.1 HONBLE HIGH COURT HAS OBSERVED THAT THE MEANI NG OF BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE HAS TO BE UNDER STOOD IN THE CONTEXT OF WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 15 PURPOSE OF SUCH RIGHTS OBTAINED AS FOR EFFECTIVELY CARRYING ON THE BUSINESS AND COMMERCE. 15 IF THE FACTS OF THE CASE IN HAND ARE ANALYSIS, I N THE LIGHT OF THE DECISIONS DISCUSSED ABOVE, IT IS CLEAR THAT THE ASSESSEE PAID THE CONSIDERATION FOR THE PURPOSE OF ENHANCING ITS NETWORK IN THE FIELD OF MO NEY TRANSFER BUSINESS BY ACQUIRING THE RIGHTS OVER INFRASTRUCTURE AND OTHER ADVANTAGE ATTACHED TO THE MARKETING NETWORK AND HENCE, THE SAME FALLS UNDER T HE CATEGORY OF INTANGIBLE ASSET AS CONTEMPLATED U/S 32(1)(II) OF THE I T ACT. 16 IN VIEW OF THE ABOVE DISCUSSION AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ASSESSEES CLAIM OF DEPRECIA TION IS ALLOWABLE. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD CIT(A) AND UPHELD THE SAME. 17 IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THIS ORDER PRONOUNCED ON THIS ORDER PRONOUNCED ON THIS ORDER PRONOUNCED ON THIS 30 3030 30 TH THTH TH . . . . DAY OF DAY OF DAY OF DAY OF MAR MAR MAR MAR 2012 2012 2012 2012 SD/ SD/.- ( (( ( J SUDHAKAR REDDY J SUDHAKAR REDDY J SUDHAKAR REDDY J SUDHAKAR REDDY ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 30 TH ,MAR 2012 RAJ* RAJ* RAJ* RAJ* WEIZMANN FOREX LTD ITA NO. 3571/MUM/2011 (ASST YEAR 2007-08) 16 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI
