Section 170 of the Income Tax Act
Income-tax Act, 2025: s.313
Section 170 of the Income-tax Act, 1961 corresponds to section 313 (Succession to business or profession otherwise than on death) of the Income-tax Act, 2025.
Read section 313 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 170 is Techno Shares and Stocks Ltd. v. CIT (327 ITR 323), cited in 130 of the 49 judgments on BharatTax that turn on this section.
Leading authorities on Section 170
Membership rights and business contracts, as 'business or commercial rights of similar nature' to a license or franchise, qualify as intangible assets eligible for depreciation under Section 32(1)(ii) of the Income-tax Act.
Business contracts and commercial rights of similar nature qualify as intangible assets under Section 32(1)(ii) and are eligible for depreciation. The decision also affirms that goodwill is an intangible asset eligible for depreciation.
A procedural defect in serving notices, such as issuing them after the assessee's death without proper service on legal representatives, can invalidate reassessment proceedings and render assessment orders void. However, an omission or defect in serving notices does not erase a tax liability created by substantive provisions, though it may render an order irregular.
Depreciation on goodwill arising on amalgamation was allowable prior to the amendments made by the Finance Act, 2021, which took effect from April 1, 2021.
Unabsorbed depreciation is not a subject matter that can be rectified under Section 154 of the Income-tax Act.
Expenditure incurred on acquiring a software license with a shelf life of less than two years is allowable as revenue expenditure.
Succession to business requires the successor to take over the whole or substantially the whole of the predecessor's business and continue it. A successor to only a part of the business, resulting from disintegration, is not considered a successor to the original business.
The jurisdiction to assess and the liability to pay tax are not conditional on the validity of the notice. Liability to pay tax is founded in charging sections, not machinery provisions.
Expenditure incurred on a debt that is not part of the assessee's stock-in-trade and not incurred in purchasing or selling goods is not an admissible deduction.
A notice issued to a deceased assessee in his own name, served on the legal representative, is not void merely because it omits to state that it was served in the capacity of a legal representative.
