Sharp Business System v. CIT

254 CTR 233High Court2012#2319 most cited

What is Sharp Business System v. CIT authority for?

Depreciation is allowable on a non-compete fee as it constitutes an intangible asset, even if the right acquired cannot be transferred, provided it is treated as part of a block of assets.

50

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2016 to 2026.

Also referred to as

Sharp Business System v CIT · section 32(1)(ii) · non-compete fee · depreciation on intangible asset · capital expenditure · block of assets · Delhi High Court · Madras High Court · Areva T & D India Ltd.

Also reported as

211 Taxmann 576211 Taxmann.com 576

Sections most often in play

Section 32(1)(ii)Section 143(3)Section 14ASection 153ASection 153DSection 2(11)Section 41(2)Section 43(6)
Read the full judgment

Issues it is cited on

depreciation on non-compete feesection 24(1)section 41(2)non-compete feerule 8d disallowancesection 2(1)section 14a disallowancesection 2(11)section 32(1)(ii)section 36(i)(iii)section 43(6)section 24(a)

Judgments citing Sharp Business System v. CIT

Deputy Commissioner of Income Tax Circle-6(1)(1), Bangalore vs. M/S Sangeetha Mobiles Pvt Ltd, Bangalore

In the result, Revenue’s appeal for Assessment Year 2014-15 is dismissed and the assessee’s cross appeal is allowed for statistical purposes

ITA 2291/BANG/2018[2014-15]Status: DisposedITAT Bangalore13 Mar 2019AY 2014-15

Bench: Shri N. V. Vasudevanand Shri Jason P. Boaz

For Appellant: Shri. Vikas Suryavamshi, Addl. CITFor Respondent: Shri. V. Srinivasan, Advocate
Section 143(1)Section 143(3)

…ssessee by way of non compete cannot be transferred to any other person and therefore, this judgment is not applicable in the present case and in the present case, the judgment of Hon’ble Delhi High Court rendered in the case of Sharp Business System vs. CIT, 254 CTR 233 is applicable. 6. We have considered the rival submissions. Regarding the issue in respect of allowability of depreciation on Goodwill/Non Compete Fees, we find that as per the facts noted by Hon’ble Karnataka High Court in Para 8 as reproduced below, the right acquired by way of non compete can be transferred to any other person but in the case…

M/S. Adi Bpo Services Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee stands dismissed

ITA 915/DEL/2016[2012-13]Status: DisposedITAT Delhi21 Feb 2019AY 2012-13

Bench: Shri H.S. Sidhu & Shri N.K. Billaiyaa.Y :2012-13 M/S Adi Bpo Services Ltd. Dcit, Circle 1(2), B-102, Queens Court Vs. New Delhi E-Block, Greakter Kailash-Ii, New Delhi – 110 048 (Pan: Aafca7116B) (Appellant) (Respondent)

For Appellant: Ms. Kimmi Dawar, CAFor Respondent: Sh. Janardan Das, Sr. DR

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER A.Y :2012-13 M/S ADI BPO SERVICES LTD. DCIT, CIRCLE 1(2), B-102, QUEENS COURT VS. NEW DELHI E-BLOCK, GREAKTER KAILASH-II, NEW DELHI – 110 048 (PAN: AAFCA7116B) (APPELLANT) (RESPONDENT) Assessee by : Ms. Kimmi Dawar, CA Department by : Sh. Janardan Das, Sr. DR. ORDER PER H.S. SIDHU, JM The Assessee has filed this appeal against the order dated 29/12/2015 passed by the Ld. CIT(A)-I, New Delhi relating to assessment year 2012-13. 2. At the time of hearing Ld. Counsel fo…

Acc Ltd, Mumbai vs. CIT Ltu, Mumbai

In the result, the appeal is allowed

ITA 4581/MUM/2016[2011-12]Status: DisposedITAT Mumbai15 Oct 2018AY 2011-12

Bench: Shri Pawan Singh () & Shri N.K. Pradhan () Assessment Year: 2010-11 Acc Ltd. (Formerly Known Commissioner Of As The Associated Cement Income Tax-Ltu Vs. Companies Ltd.) Cement Mumbai. House, 121, M.K. Road, Mumbai. Pan No. Aaact1507C Appellant Respondent Assessee By : Mr. Yogesh Thar, Ar Revenue By : Mr. R.P. Meena, Cit Dr Date Of Hearing : 24/07/2018 Date Of Pronouncement : 15/10/2018

For Appellant: Mr. Yogesh Thar, ARFor Respondent: Mr. R.P. Meena, CIT DR
Section 263Section 32

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Assessment Year: 2010-11 ACC Ltd. (Formerly known Commissioner of as The Associated Cement Income Tax-LTU Vs. Companies Ltd.) Cement Mumbai. House, 121, M.K. Road, Mumbai. PAN No. AAACT1507C Appellant Respondent Assessee by : Mr. Yogesh Thar, AR Revenue by : Mr. R.P. Meena, CIT DR Date of Hearing : 24/07/2018 Date of pronouncement : 15/10/2018 ORDER PER N.K. PRADHAN, AM This is an appeal filed by the assessee. The relevant assessment year is 2010-11. The appeal is d…

DCIT (It) 2(2)(1), Mumbai vs. Imcd Group B.V. India Branch, Mumbai

The appeal of the revenue is dismissed

ITA 1544/MUM/2016[2012-13]Status: DisposedITAT Mumbai11 Jul 2018AY 2012-13

Bench: Shri Shamim Yahya, Am & Shri Ravish Sood, Jm Deputy Commissioner Of Income M/S Imcd Group B.V. India Tax (It)-2(2)(1), Room No. 136, Branch, C/O Vatsaraj & Co., बिधम/ 1St Floor Scindia House, 1St Floor, Fort Chambers, Vs. N.M. Road, Mumbai-400 038 “C” Block, 65 Tamarind Lane Fort, Mumbai-400 023 स्थामी रेखा सं./ जीआइआय सं./ Pan No. Aabci8417R (अऩीराथी /Appellant) (प्रत्मथी / Respondent) :

For Appellant: Shri Samuel Darse, D.RFor Respondent: Shri Raghunathan Sampath. A.R
Section 143(2)Section 143(3)Section 32

…therefore, it could not be characterised as an „intellectual property‟ and would not be eligible for depreciation under Sec.32 of the Act. The A.O taking support of the judgment of the High court of Delhi in the case of Sharp Business Systems Vs. CIT-3 (2012) 254 CTR 233 (Del) and certain other judicial pronouncements, disallowed the claim of depreciation of Rs. 1,36,31,137/- raised by the assessee on goodwill. 6. The assessee assailing the disallowance of its claim of depreciation of Rs. 1,36,31,137/- on goodwill, filed objection with the Dispute Resolution Panel-1, Mumbai (for short „DRP‟). The DRP after delib…

Acg Pampac Machines P.Ltd, Mumbai vs. DCIT Cen Cir 42, Mumbai

Appeal stands allowed

ITA 7765/MUM/2014[2010-11]Status: DisposedITAT Mumbai11 Jul 2018AY 2010-11

Bench: Shri C.N. Prasad, Jm & Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./I.T.A. No.7765/Mum/2014 (िनधा"रणवष" / Assessment Year:2010-11) Acg Pampac Machines Private Limited Deputy Commissioner Of Income Tax बनाम/ 1001, Dalamal House, 10Th Floor Central Circle-42 Nariman Point Aaykar Bhavan, M.K.Marg Vs. Mumbai-400 021 Mumbai-400 020 "थायीलेखासं./जीआइआरसं./Pan/Gir No.Aaacp-4134-F (अपीलाथ"/Appellant) (""थ" / Respondent) : Revenueby : Rajesh Kumar Yadav, Ld.Dr Assessee By : Manish Shah, Ld.Ar सुनवाईकीतारीख/ : 02/07/2018 Date Of Hearing घोषणाकीतारीख / : 11/07/2018 Date Of Pronouncement आदेश / O R D E R

For Appellant: Manish Shah, Ld.ARFor Respondent: Rajesh Kumar Yadav, Ld.DR
Section 143(3)Section 32(1)(ii)

…in the following manner:- (i) Pentasoft Technologies Ltd. [41 Taxmann.com 120 Madras High Court] (ii) Ingersoll Rand International Ind. Ltd. [48 Taxmann.com 349 Karnataka High Court] Per Contra, Hon’ble Delhi High Court in Sharp Business System Vs CIT [2012 254 CTR 233] has taken contrary decision. No decision of our jurisdictional High Court has been brought on record. It is noted that both the decisions rendered in assessee’s favor are subsequent decisions in comparison to contrary decision rendered by Hon’ble Delhi High Court. Keeping in view the conflicting decisions of Hon’ble High Court, we are inclined t…

DCIT, New Delhi vs. M/S Eac Industrial Ingredients India P. Ltd., New Delhi

In the result, the solitary ground of the appeal of the revenue is allowed

ITA 1801/DEL/2011[2006-07]Status: DisposedITAT Delhi28 Dec 2017AY 2006-07

Bench: Shri Bhavnesh Siani & Shri Prashant Maharishidcit, Vs. Eac Industrial Ingredients India P. Circle-11(1), Room No. 312, Ltd, Cr Building, New Delhi B-174, First Floor, West Patel Nagar, New Delhi Pan: Aabce5086G (Appellant) (Respondent)

For Appellant: Shri Nageswar Rao, AdvFor Respondent: Shri Subash Verma, Sr DR
Section 32Section 32(1)

…the claim of the assessee and therefore, revenue is in appeal before us. 4. The ld Departmental Representative stated that issue is squarely covered against the assessee by the decision of the Hon'ble Delhi High Court in case of Sharp Business System Vs. CIT 254 CTR 233 (Del). 5. The ld AR vehemently supported the order of the ld CIT(A) and submitted that non compete fees paid partakes the character of “intangible asset” in view of amendment w.e.f. Assessment Year 1999-2000 and depreciation is allowable in view of the decision of Hon'ble Supreme Court in case of Smif Securities Ltd. He referred to various clause…

M/S Gkn Driveline India Ltd, N vs. Commissioner of Income Tax, De

The appeal is dismissed with no orders as to costs

ITA/542/2005HC Delhi27 Nov 2017

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 260A

…lso dismissed. Submissions of the Revenue 10. Mr. Asheesh Jain, learned Senior Standing Counsel appearing for the Revenue, heavily relied upon the judgment of this ITA 542/2005 Page 5 of 13 Court in Sharp Business System v. Commissioner of Income Tax [2012] 254 CTR 233 (Delhi) (hereinafter ‘Sharp Business System’) to submit that a non-compete fee for a period of seven years was held to be a capital expenditure and not a revenue expenditure. He submitted that the Assessee obtained a benefit of an enduring nature by ensuring that competition was eliminated at the inception itself. Agreement dated 16th February 19…

Pitney Bowes India (P) Ltd., New Delhi vs. DCIT, New Delhi

In the result, out of the five appeals of the assessee, the ITA Nos

ITA 289/DEL/2013[2005-06]Status: DisposedITAT Delhi29 May 2017AY 2005-06

Bench: Sh. I.C. Sudhir & Sh. O.P. Kant

Section 143(3)Section 147Section 32

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘F’, NEW DELHI BEFORE SH. I.C. SUDHIR, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER ITA Nos. 289 to 293/Del/2013 Assessment Years: 2005-06 to 2009-10 Vs. DCIT, Circle-14(1) / Addl.CIT, M/s. Pitney Bowes India (P) Ltd., 2nd Floor, 45, Okhla Industrial Range-14 / Income Tax Officer, Estate, Phase-III, New Delhi Ward -14(3), New Delhi PAN : AADCP3417C (Appellant) (Respondent) Appellant by S/sh. G.C. Srivastava, Adv.; Manoneet Dalal, Adv.; Anubhav Jain and Anshul Kumar, CA Respondent by Sh. F.R. Meena, Sr.DR Date of hearing 30.03.2017 Date of pronouncement 29.…

M/S. Sangeetha Mobiles Private Limited, Bangalore vs. The Addl. Commissioner of Income-Tax, Bangalore

In the result, the appeal of the assessee is partly allowed in

ITA 1185/BANG/2016[2010]Status: DisposedITAT Bangalore03 Nov 2016

Bench: Shri A. K. Garodia & Smt Asha Vijayaraghavan

For Appellant: Shri V. Srinivasan, C. AFor Respondent: Shri S. Sundar Rajan, JCIT
Section 32

…annot be transferred to any other person and therefore, this judgment is not applicable in the present case and in the present case, the judgment of Hon’ble Delhi ITA Nos.1185 & 1186(B)/2016 High Court rendered in the case of Sharp Business System vs. CIT, 254 CTR 233 is applicable. 6. We have considered the rival submissions. Regarding the issue in respect of allowability of depreciation on Goodwill/Non Compete Fees, we find that as per the facts noted by Hon’ble Karnataka High Court in Para 8 as reproduced below, the right acquired by way of non compete can be transferred to any other person but in the…

Incap Contract Manufacturing Services P Ltd, Bangalore vs. Commissioner of Income Tax(Appeals)-1, Bangalore

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 1469/BANG/2014[2009-10]Status: DisposedITAT Bangalore09 Mar 2016AY 2009-10

Bench: Shri Abraham P George & Shri Vijay Pal Rao

For Appellant: Shri Chavali Narayan, C.AFor Respondent: Ms. S. Praveena, Addl. CIT (D.R)
Section 32Section 32(1)(ii)

…IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH “ B ” BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A. Nos.1469 to 1471 /Bang/2014 (Assessment Years : 2009-10 to 2011-12) M/s. Incap Contract Vs. Dy. Commissioner of Income Tax, Manufacturing Services Pvt. Ltd., Circle 11(4), Bangalore. Sufiya Elite, 3rd Floor, No.18, Cunningham Road, Bangalore-52 PAN AABCI 6651H Appellant Respondent. Appellant By : Shri Chavali Narayan, C.A. Respondent By : Ms. S. Praveena, Addl. CIT (D.R) Date of Hearing : 9.2.2016. Date of Pronouncement : 9.3.2016. O R D E R Per Shri Vijay…