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| The Tax Publishers2020 TaxPub(DT) 2892 (Mum-Trib) : (2020) 185 ITD 0559 INCOME TAX ACT, 1961
Section 32(1)(ii)
Once payment of brand licence fee including the amount had been approved by competent authority (RBI), that had specifically considered the value of brand license, fees paid, there could not be any disallowance of depreciation on the ground that assessee had not gained any benefits.
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Depreciation - Allowability - Brand licence fee - Denial on the allegation of no benefit dervied by assessee
Assessee engaged in producing/promoting television programmes/movies and broadcasting of the same on satellite television channels claimed depreciation on payment of brand licence fees. AO disallowed assessee's claim on the ground of assessee having gained no benefits by paying brand licence fee.Held: Once payment of brand licence fee including the amount had been approved by competent authority (RBI), that had specifically considered the value of brand license, fees paid for the STAR Mark, there could not be any disallowance of depreciation on the ground that assessee had not gained any benefits. consideration towards brand license was determined based on valuation of brand by an independent valuer and said payment towards brand license was capitalized in the books of accounts and depreciation claimed on yearly basis and further, department had taxed entire amount received by Star Ltd. from assessee. Accordingly, denial during the year under consideration which is the third year of claim of depreciation by assessee on payment of brand licence fees, was not justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 37(1)
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