advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Tuesday, October 20, 2015

whether the Assessee is entitled to any benefit under Section 32 of the Act read with Section 43(3) thereof for the expenditure incurred on the acquisition of trademarks, copyrights and know-how.= The question is, would intellectual property such as trademarks, copyrights and know-how come within the definition of ‘plant’ in the ‘sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it’? In our opinion, this must be answered in the affirmative for the reason that there can be no doubt that for the purposes of a large business, control over intellectual property rights such as brand name, trademark etc. are absolutely necessary. Moreover, the acquisition of such rights and know-how is acquisition of a capital nature, more particularly in the case of the Assessee. Therefore, it cannot be doubted that so far as the Assessee is concerned, the trademarks, copyrights and know-how acquired by it would come within the definition of ‘plant’ being commercially necessary and essential as understood by those dealing with direct taxes. 32. Section 32 of the Act as it stood at the relevant time[10] did not make any distinction between tangible and intangible assets for the purposes of depreciation. The distinction came in by way of an amendment after the assessment year that we are concerned with. That being the position, the Assessee is entitled to the benefit of depreciation on plant (that is on trademarks, copyrights and know-how) in terms of Section 32 of the Act as it was at the relevant time. We are, therefore, in agreement with the view taken by the Tribunal in this regard that the Assessee would be entitled to the benefit of Section 32 of the Act read with Section 43(3) thereof. 33. In this context, it may also be mentioned that by denying that the trademarks were auctioned to the highest bidder, the Revenue is actually seeking to re-write clause 16 of the agreement between the erstwhile partners of MGBW. This clause specifically states that the going concern and all the trademarks used in the course of the said business by the said firm and under which the business of the partnership is carried on shall vest in and belong to the highest bidder. Under the circumstances, it is difficult to appreciate how it could be concluded by the Revenue that the trademarks were not auctioned off and only the goodwill in the erstwhile firm was auctioned off. In D. S. Bist & Sons v. CIT[11] it was held that the Act does not clothe the taxing authorities with any power or jurisdiction to re-write the terms of the agreement arrived at between the parties with each other at arm’s length and with no allegation of any collusion between them. ‘The commercial expediency of the contract is to be adjudged by the contracting parties as to its terms.’ 34. The issue, looked at from any angle, would lead to the conclusion that Question No. 3 is required to be answered in the negative, in favour of the Assessee and against the Revenue. We do so accordingly. Question No. 2 is left open for consideration in an appropriate case. 35. The appeals are disposed of in the above terms. No costs.

                                                                  REPORTABLE

                         IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                    CIVIL APPEAL NOS. 10547-10548 OF 2011


M/s. Mangalore Ganesh Beedi Works                         ….Appellant

                                       Versus

Commissioner of Income Tax,
Mysore & Anr.                                             …Respondents


                               J U D G M E N T

Madan B. Lokur, J.


1.    These appeals are directed against a judgment  and  order  dated  23rd
December, 2010 passed by the Division Bench of the High Court  of  Karnataka
at Bangalore in ITA Nos. 69-70 of 2001.
2.          The three substantial questions of law considered  by  the  High
Court were as follows:-

  Whether Rs. 12,24,700/- claimed as revenue expenditure by the  Association
of persons which was constituted by the  three  partners  of  the  erstwhile
firm, MGBW, can be allowed as permissible deduction  in  the  hands  of  the
said Association of persons under Section 37 of the  Income-Tax  Act,  1961,
as being laid out or expended wholly and  exclusively  for  the  purpose  of
business of the said Association of Persons?

  Whether the Assessee was entitled to claim any deduction  on  the  alleged
expenditure for acquisition of patent [trademarks]  rights,  copyrights  and
know-how, in terms of Section 35A and 35AB of the Act?

  Whether the Tribunal had erred  in  directing  the  Assessing  Officer  to
capitalize the value of trademarks,  copyright  and  technical  know-how  by
treating the same as plant and machinery and grant depreciation therein?

3.          In its  conclusion,  the  High  Court  answered  the  first  two
questions in the negative and the  third  question  in  the  affirmative  in
favour of the Revenue and against the Assessee.   While doing so,  the  High
Court set aside the findings  of  the  Income-Tax  Appellate  Tribunal  (for
short ‘the Tribunal”) and restored the order of the Assessing  Officer.  The
relevant assessment year is 1995-96.
4.          Broadly, the facts of the case indicate that in  1939  late  Sri
S. Raghuram Prabhu started the business of  manufacturing  beedis.   He  was
later joined in the business by Sri Madhav Shenoy  as  a  partner  and  thus
M/s. Mangalore Ganesh Beedi Works (for short  ‘MGBW’)  came  into  existence
with effect from 28th February, 1940.
5.          The partnership firm was reconstituted from  time  to  time  and
its last reconstitution and partnership deed contained  Clause  16  relating
to the manner in which the affairs of the partnership firm were to be  wound
up after its dissolution.  Clause  16  of  the  partnership  deed  reads  as
follows:-
“16. If the partnership is dissolved, the going  concern  carried  on  under
the name of the Firm Mangalore Ganesh Beedi Works and all  the  trade  marks
used in course of the said business by the said firm  and  under  which  the
business of the partnership is carried on shall vest in and  belong  to  the
partner who offers and pays or two or more partners who  jointly  offer  and
pay the highest price therefor as a single group at a sale to be  then  held
as among the partners shall be entitled to bid.  The  other  partners  shall
execute and complete in favour of the  purchasing  partner  or  partners  at
his/her or their expense all such deed,  instruments  and  applications  and
otherwise and him/her name or their names of all the said  trade  marks  and
do all such deed, acts and transactions as are incidental  or  necessary  to
the said transferee or assignee partner or partners.”

6.          Due to differences between the partners of MGBW,  the  firm  was
dissolved on or about 6th December, 1987  when  two  partners  of  the  firm
applied for its winding up by filing Company Petition No. 1 of 1988  in  the
High  Court.   While  entertaining  the  Company  Petition  the  High  Court
appointed an Official Liquidator  and  eventually,  after  hearing  all  the
concerned parties, a winding up order was passed on 14th June, 1991.
7.          In its order passed on 14th June, 1991 the High Court held  that
the firm is dissolved with effect from 6th December, 1987 and  directed  the
sale of its assets as a going concern to  the  highest  bidder  amongst  the
partners.  The relevant extract of the order passed by the High Court  reads
as follows:-

“(i) The dissolved partnership firm - Mangalore  Ganesh  Beedi  Works  as  a
going concern shall be sold to such of its partner/s, who makes an offer  of
a highest price, the same not being less than the minimum  (reserved)  price
of Rs. 30 crores (Rupees Thirty Crores) within 11-7-1991  accepting  further
liability to pay interest at 15% per annum towards the amount of  the  price
payable to partner/s from 6-12-1987 till the date of deposit.”

8.          The High Court also prescribed certain other activities such  as
conducting the auction by the Official Liquidator etc.
9.          Pursuant to the order passed by the High  Court  on  14th  June,
1991 an auction was conducted in  which  three  of  the  erstwhile  partners
forming an association of  persons  (hereinafter  referred  to  as  ‘AOP-3’)
emerged as the highest bidders and their bid of Rs.92 crores for the  assets
of MGBW was accepted by the Official Liquidator on or about  17th  November,
1994.  With effect from 18th November, 1994 the business of the firm  passed
on into the hands of AOP-3 but the  tangible  assets  were  actually  handed
over by the Official Liquidator to AOP-3 on or about 7th January, 1995.
10.         MGBW (hereinafter referred  to  as  the  ‘Assessee’)  filed  its
return  for  the  period  18th  November,  1994  to  31st  March,  1995  and
subsequently filed a  revised  return.   Broadly,  the  Assessee  claimed  a
deduction of Rs. 12,24,700/- as  a  revenue  expenditure  permissible  under
Section 37 of the Income-Tax Act, 1961  (hereinafter  referred  to  as  ‘the
‘Act’)  towards  legal  expenses  incurred.   The  Assessee   also   claimed
depreciation under Section 35A and 35AB of the Act  towards  acquisition  of
Intellectual Property Rights such as rights over  the  trademark,  copyright
and  technical  know-how.   In  the  alternative,   the   Assessee   claimed
depreciation on capitalizing the value of the Intellectual  Property  Rights
by treating them as plant.
11.         The Assessing Officer  passed  an  order  on  30th  March,  1998
rejecting the claim of the Assessee under all the three  Sections  mentioned
above.  Feeling aggrieved, the  Assessee  preferred  an  appeal  before  the
Commissioner of Income-Tax (Appeals) who passed an order  on  15th  October,
1998.  The appeal was allowed in part inasmuch  as  it  was  held  that  the
Assessee was entitled to a deduction towards legal expenses.   However,  the
claim  of  the  Assessee  regarding  deduction  or   depreciation   on   the
Intellectual Property Rights was rejected by the Commissioner of  Income-Tax
(Appeals).
12.         As a result of the appellate order, the  Revenue  was  aggrieved
by the deduction granted to the Assessee in respect of  legal  expenses  and
so it preferred an appeal before the Tribunal.  The Assessee  was  aggrieved
by the rejection of its  claim  in  respect  of  the  Intellectual  Property
Rights and also filed an appeal before the Tribunal.
13.         By an order dated 19th October, 2000 the  Tribunal  allowed  the
appeal of the Assessee while rejecting the appeal of the Revenue.
14.         The impugned  order  was  then  passed  by  the  High  Court  as
mentioned above. It is under these circumstances that the  assessee  is  now
before us in appeal.
Question No. 1
15.         In respect of the first question the  issue  really  is  whether
the expenses incurred by the Assessee were for protecting  the  business  of
the firm or were expenses incurred for personal  reasons  namely  consequent
to disputes or differences relating to the ownership of  the  going  concern
with the erstwhile partners of the Assessee.
16.         The Tribunal examined the issue in substantial detail.   It  was
held by the Tribunal that the concern  was  in  fact  a  going  concern  and
therefore, the legal expenses incurred were for defending  the  business  of
the going concern and for protecting its interests.  It could  not  be  said
that the expenses were personal in nature, nor could it  be  said  that  the
expenses were unreasonable  or  not  bona  fide.   It  was  found  that  the
expenses incurred did not pertain to the period prior to  the  AOP-3  taking
over the going concern but they were expenses incurred  after  the  business
was taken over by AOP-3 and that they  related  to  legal  proceedings  that
were pending in the High Court.  The Tribunal noted that even the  Assessing
Officer did not treat the expenditure as being of a capital nature.
17.         On a consideration of the issues  placed  before  the  Tribunal,
including the decision of this Court in Dalmia Jain and Company  Limited  v.
Commissioner of Income Tax[1] it was held that the expenses incurred by  the
Assessee were honest and reasonable and were incurred for  the  purposes  of
protecting the business of the firm as a going  concern.   In  Dalmia  Jain,
this Court relied upon Shree Meenakshi Mills v. CIT[2] and held:

“[D]eductibility of expenditure incurred in prosecuting a  civil  proceeding
depends upon the nature and purpose of the legal proceeding in  relation  to
the assessee’s business and  the  same  cannot  be  affected  by  the  final
outcome of that  proceeding.   However  wrong-headed,  ill  advised,  unduly
optimistic or overconfident in his conviction the assessee might  appear  in
the light of the ultimate decision; expenditure in starting and  prosecuting
a civil proceeding cannot be denied as a permissible deduction in  computing
the taxable income merely because the proceeding had  failed,  if  otherwise
the expenditure was laid out for the purpose  of  the  business  wholly  and
exclusively, that is,  reasonably  and  honestly  incurred  to  promote  the
interest of the business.  Persistence of  the  assessee  in  launching  the
proceeding and carrying it from Court to Court and incurring expenditure  is
not a ground for disallowing the claim.”

18.         The High Court did not accept the view of the  Tribunal  and  in
support of that it was contended  before  us  by  learned  counsel  for  the
Revenue that the highest bid of AOP-3 was accepted by the High Court  on  or
about 21st September, 1994 and  therefore  there  was  no  question  of  the
expenses being incurred for protecting the business  of  the  going  concern
subsequent to that date.  In other words all  the  legal  expenses  incurred
were prior to 21st September, 1994 and were therefore personal in nature.
19.         We are not at all  impressed  with  the  submission  of  learned
counsel for the Revenue. There is a clear finding of fact  by  the  Tribunal
that the legal expenses incurred by the Assessee  were  for  protecting  its
business and that the expenses were  incurred  after  18th  November,  1994.
There is no reason to  reverse  this  finding  of  fact  particularly  since
nothing has been shown to us to  conclude  that  the  finding  of  fact  was
perverse in any manner whatsoever.  That  apart,  if  the  finding  of  fact
arrived at by the Tribunal  were  to  be  set  aside,  a  specific  question
regarding a perverse finding of fact ought to have been framed by  the  High
Court.  The Revenue did not seek the framing of any such question.  In  this
regard, reference may be made to K. Ravindranathan Nair v.  Commissioner  of
Income Tax[3] wherein it was observed:

“The High Court overlooked the cardinal principle that it  is  the  Tribunal
which is the final fact-finding  authority.   A  decision  on  fact  of  the
Tribunal can be gone into by the High Court only  if  a  question  has  been
referred to it which says that the finding  of  the  Tribunal  on  facts  is
perverse, in the sense that it is such as could  not  reasonably  have  been
arrived at on the material placed before the Tribunal.  In this case,  there
was no such question before the High Court.  Unless and until a  finding  of
act reached by the Tribunal is  canvassed  before  the  High  Court  in  the
manner set out above,  the  High  Court  is  obliged  to  proceed  upon  the
findings of fact reached by the Tribunal and to give an  answer  in  law  to
the question of law that is before it.”

20.         Accordingly, we hold that the High Court was  not  justified  in
upsetting a finding of fact arrived at by the Tribunal, particularly in  the
absence of a substantial question  of  law  being  framed  in  this  regard.
Therefore, we set aside the conclusion arrived at by the High Court on  this
question and restore the view of the Tribunal and  answer  the  question  in
favour of the Assessee and against the Revenue.

Question Nos. 2 & 3
21.         As a preface to answering these questions, we  must  accept  and
acknowledge that intellectual property rights have  a  value.   There  is  a
tacit acceptance of this in Bharat Beedi Works (P) Ltd.  v.  CIT[4]  wherein
it has been observed that there is a value attached to a brand name.
22.         Proceeding from this starting point, it must be noted  that  the
fundamental  basis  on  which  these  questions  were  decided  against  the
Assessee and in favour of the Revenue is the finding of the High Court  that
what was sold by way of auction to the highest bidder was  the  goodwill  of
the partnership firm and not the trademarks, copyrights and technical  know-
how.  Reliance was placed on the Report dated  24th  January,  1989  of  the
Chartered Accountants Rao and Swamy, commissioned  during  the  pendency  of
Company Petition in the High Court.  In this Report,  the  total  assets  of
MGBW were valued at Rs. 28,58,01,410.02. The total liabilities  were  valued
at   Rs.26,55,77,389.02   thereby    making    the    net    assets    worth
Rs.2,02,24,021.30. The Chartered  Accountants  specifically  stated  in  the
Report that  the  net  assets  excluded  goodwill.   The  Report  calculated
goodwill on the super profit method by taking three times the profit  for  5
years (30.06.1983 to 30.06.1987).  This was then  calculated  at  Rs.  26.10
crores.  It is on this basis that the reserve  price  for  the  auction  was
fixed at Rs.30 crores, as mentioned in the order of 14th June,  1991  passed
by the High Court.  According to learned counsel for the Revenue,  MGBW  was
already the owner of the trademarks, copyrights and technical  know-how  and
essentially the rights in the intellectual property  might  be  included  in
goodwill, but these were not auctioned off but were relinquished  in  favour
of AOP-3 and, therefore, the Assessee.
23.         AOP-3 on the other hand had obtained a separate  valuation  from
the Chartered Accountant M.R. Ramachandra Variar.  In his Report dated  12th
September, 1994  the  technical  know-how  was  valued  at  Rs.  36  crores,
copyright was valued at Rs 21.6 crores and trademarks  were  valued  at  Rs.
14.4 crores making a total of Rs. 72 crores.  These figures were arrived  at
by taking 5 times the average profits for  the  last  5  years  (ended  31st
March, 1994).  It is not necessary to go  into  calculating  the  bifurcated
value of the three intangible assets except to say that the trademarks  were
given a value since in the beedi industry the trademark and brand name  have
a value and the Assessee’s product under trademark ‘501’ had a national  and
international market.  As far  as  the  copyright  valuation  is  concerned,
beedis are known not only by the trademark but also by the depiction on  the
labels and wrappers and colour combination on  the  package.   The  Assessee
had a copyright on the content  of  the  labels,  wrappers  and  the  colour
combination on them.  Similarly, the know-how had a value  since  the  aroma
of beedis differs from one manufacturer to another, depending on the  secret
formula   for   mixing    and    blending    tobacco.    The    claim    for
depreciation/amortization by the Assessee is limited to this amount  of  Rs.
72 crores.
24.         While passing orders on the bid given by the Assessee, the  High
Court tacitly accepted, in  its  order  of  22nd  December,  1994  that  the
trademarks and copyrights were the intangible assets of MGBW.[5]  It  is  on
this basis (and the extant  accounting  practice)  that  the  Assessee  made
necessary entries in its books including in the balance sheet.
25.         However, what is equally important is  that  the  Variar  Report
mentioned that it  did  not  consider  any  value  for  goodwill  since  the
trademarks, copyrights and know-how had tremendous  business  value  as  the
firm  had  been  enjoying  the  status  of  being  India’s   largest   beedi
manufacturer over the last five decades.  After  taking  into  consideration
the net assets and liabilities of MGBW, the Chartered Accountant arrived  at
the net value of the going concern at Rs. 90 crores. On  this  basis,  AOP-3
gave its bid of Rs. 92 crores which was eventually accepted.
26.         In the case of M. Ramnath Shenoy[6]  (an  erstwhile  partner  of
MGBW) the Tribunal accepted (after a detailed discussion) the contention  of
the Assessee that trademarks, copyrights and technical know-how  alone  were
comprised in the assets of the business and not goodwill.  It was also  held
that when the Revenue alleges that it is goodwill and  not  trademarks  etc.
that is transferred, the onus will be on the Revenue to prove it,  which  it
was unable to do.  The Tribunal then examined the question whether the  sale
of these intangible assets would attract capital gains.   The  question  was
answered in the negative and it was held that the assets are  self-generated
and would not attract capital gains.  The decision of the Tribunal has  been
accepted by the Revenue  and  we  really  see  no  reason  why  a  different
conclusion should be arrived at in so far as the Assessee is concerned.

27.         The High Court denied any benefit to the Assessee under  Section
35A and Section 35AB of the Act since it was held that  what  was  auctioned
off was only goodwill and no amount was spent by AOP-3  towards  acquisition
of trademarks, copyrights  and  know-how.  In  coming  to  this  conclusion,
reliance was placed on the Report  of  the  Chartered  Accountants  Rao  and
Swamy who stated that the assets of MGBW were those of a going  concern  and
were valued on the goodwill of the firm and no  trademarks,  copyrights  and
know-how were  acquired.   It  was  further  held,  in  our  opinion  rather
speculatively by the High Court, that the valuation made  by  the  Chartered
Accountant of AOP-3 that is M.R. Ramachandra Variar that  the  goodwill  was
split into know-how, copyrights and trademarks  only  for  the  purposes  of
claiming a deduction under Section 35A and Section 35AB of the Act  and  the
value of the goodwill was shown as nil and the  deduction  claimed  did  not
represent the value of the know-how, copyrights and trademarks.
28.         We leave open the question of the applicability of  Section  35A
and Section 35AB of the Act  for  an  appropriate  case.   This  is  because
learned counsel submitted that if the  Assessee  is  given  the  benefit  of
Section 32 read with Section 43(3) of the Act  (depreciation  on  plant)  as
has been done by the  Tribunal,  the  Assessee  would  be  quite  satisfied.
Unfortunately, the alternative aspect of the Assessee’s case was not  looked
into by the High Court.
29.         Therefore, now the  question  to  be  answered  is  whether  the
Assessee is entitled to any benefit under Section 32 of the  Act  read  with
Section 43(3) thereof for the expenditure incurred  on  the  acquisition  of
trademarks, copyrights and know-how.
30.         The definition of  ‘plant’  in  Section  43(3)  of  the  Act  is
inclusive.[7] A similar definition occurring in Section 10(5) of the  Income
Tax Act, 1922[8] was considered in Commissioner of Income Tax v.  Taj  Mahal
Hotel[9] wherein it was held that the word ‘plant’  must  be  given  a  wide
meaning. It was held:

“Now it is well settled that where the definition of a  word  has  not  been
given, it must be construed in its popular sense if it is a  word  of  every
day use. Popular sense means “that sense which people  conversant  with  the
subject-matter with which the statute is dealing, would  attribute  to  it”.
In the present case, Section 10(5)  enlarges  the  definition  of  the  word
“plant” by including in it the  words  which  have  already  been  mentioned
before. The very fact that even books have  been  included  shows  that  the
meaning intended to be given to “plant” is  wide.  The  word  “includes”  is
often used in interpretation clauses in order to enlarge the meaning of  the
words or phrases occurring in the body of the statute. When it is  so  used,
those words and phrases must be construed as  comprehending  not  only  such
things as they signify according to their nature and import but  also  those
things which the interpretation clause declares  that  they  shall  include.
The word “include” is also suspectible of other constructions  which  it  is
unnecessary to go into.”

31.          The  question  is,  would   intellectual   property   such   as
trademarks, copyrights and know-how come within the  definition  of  ‘plant’
in the ‘sense which people conversant with  the  subject-matter  with  which
the statute is dealing, would attribute to it’? In our  opinion,  this  must
be answered in the affirmative for the reason that there  can  be  no  doubt
that for the  purposes  of  a  large  business,  control  over  intellectual
property  rights  such  as  brand  name,  trademark  etc.   are   absolutely
necessary.  Moreover,  the  acquisition  of  such  rights  and  know-how  is
acquisition of a capital nature,  more  particularly  in  the  case  of  the
Assessee. Therefore, it cannot be doubted that so far  as  the  Assessee  is
concerned, the trademarks, copyrights and  know-how  acquired  by  it  would
come within the definition  of  ‘plant’  being  commercially  necessary  and
essential as understood by those dealing with direct taxes.
32.         Section 32 of the Act as it stood at the relevant  time[10]  did
not make any distinction between tangible  and  intangible  assets  for  the
purposes of depreciation. The distinction came in by  way  of  an  amendment
after the assessment year  that  we  are  concerned  with.  That  being  the
position, the Assessee is entitled to the benefit of depreciation  on  plant
(that is on trademarks, copyrights and know-how) in terms of Section  32  of
the Act as it was at the relevant time.  We  are,  therefore,  in  agreement
with the view taken by the Tribunal in this regard that the  Assessee  would
be entitled to the benefit of Section 32 of the Act read with Section  43(3)
thereof.
33.         In this context, it may also be mentioned that by  denying  that
the trademarks  were  auctioned  to  the  highest  bidder,  the  Revenue  is
actually seeking  to  re-write  clause  16  of  the  agreement  between  the
erstwhile partners of MGBW. This clause specifically states that  the  going
concern and all the trademarks used in the course of the  said  business  by
the said firm and under which the business of the partnership is carried  on
shall vest in and belong to the highest bidder. Under the circumstances,  it
is difficult to appreciate how it could be concluded  by  the  Revenue  that
the trademarks  were  not  auctioned  off  and  only  the  goodwill  in  the
erstwhile firm was auctioned off. In D. S. Bist & Sons  v.  CIT[11]  it  was
held that the Act does not clothe the taxing authorities with any  power  or
jurisdiction to re-write the terms of the agreement arrived at  between  the
parties with each other at arm’s  length  and  with  no  allegation  of  any
collusion between them. ‘The commercial expediency of the contract is to  be
adjudged by the contracting parties as to its terms.’
34.         The  issue,  looked  at  from  any  angle,  would  lead  to  the
conclusion that Question No. 3 is required to be answered in  the  negative,
in favour of the Assessee and against the Revenue.  We  do  so  accordingly.
Question No. 2 is left open for consideration in an appropriate case.
35.         The appeals are disposed of in the above terms. No costs.




                                                               ...…………………….J
                                                                 (Madan B.
                                   Lokur)



                                                               ...…………………….J
                                                            (S.A. Bobde)
New Delhi;
October 15, 2015

-----------------------
[1]    [1971] 81 ITR 754 (SC)
[2]    [1967] 63 ITR 207 (SC)
[3]    [2001] 247 ITR 178 (SC)
[4]    (1993) 3 SCC 252, paragraph 13.
[5]    The High Court held, Company Application No.436/1994 is  allowed  and
the sale of Mangalore Ganesh Beedi Works as a going  concern  with  all  its
assets, tangible and intangible whatsoever and wherever they are with  trade
name and all other trade marks copy rights and privileges owned and  enjoyed
by the said firm together with all liabilities  of  the  out-going  partners
excluding their tax  liabilities  is  hereby  confirmed  in  favour  of  the
purchasing group  namely  applicants  in  Company  Application  No.436/1994;
subject to the final orders  that  may  be  passed  in  Company  Application
No.433/1994.  The out-going group of partners  presently  in  Management  of
the affairs of M/s Mangalore Ganesh Beedi  Works,  are  hereby  directed  to
deliver forthwith  the  possession  of  the  entire  business  of  the  said
dissolved partnership firm together with all trade marks, trade names,  copy
rights, Book of Accounts, documents  relating  to  assets  and  liabilities,
Bank Accounts etc., under the supervision of the  Official  Liquidator,  who
shall submit a report as to the completion of the  process  of  delivery  of
possession as aforesaid to this Court, within four weeks from today.
[6]    ITA No.258 (Bangalore/1997) decided on 10th July,  1997  relevant  to
Assessment Year 1995-96
[7]    “plant” includes ships, vehicles,  books,  scientific  apparatus  and
surgical equipment used for the purposes of the business or  profession  but
does not include tea bushes or livestock;
[8]    “plant” includes vehicles, books, scientific apparatus  and  surgical
equipment  purchased  for  the  purposes  of  the  business,  profession  or
vocation;
[9]    (1971) 3 SCC 550
[10]   ‘In  respect  of  depreciation  of  buildings,  machinery,  plant  or
furniture owned, wholly  or  partly,  by  the  assessee  and  used  for  the
purposes of the business or  profession,  the  following  deductions  shall,
subject to the provisions of section 34, be allowed –’
[11]   [1984] 149 ITR 276 (Delhi)

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.