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.
Pursuant to the order passed by the High Court on 14th June, 1991 an auction was companyducted 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.
The High Court also prescribed certain other activities such as companyducting the auction by the Official Liquidator etc.
In the alternative, the Assessee claimed depreciation on capitalizing the value of the Intellectual Property Rights by treating them as plant.
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.
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, companyyright and technical know how.
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.
1 of 1988 in the High Court.
By an order dated 19th October, 2000 the Tribunal allowed the appeal of the Assessee while rejecting the appeal of the Revenue.
The Assessing Officer passed an order on 30th March, 1998 rejecting the claim of the Assessee under all the three Sections mentioned above.
The impugned order was then passed by the High Court as mentioned above.
Feeling aggrieved, the Assessee preferred an appeal before the Commissioner of Income Tax Appeals who passed an order on 15th October, 1998.
1 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 companysequent to disputes or differences relating to the ownership of the going companycern with the erstwhile partners of the Assessee.
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 companycern to the highest bidder amongst the partners.
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.
While entertaining the Company Petition the High Court appointed an Official Liquidator and eventually, after hearing all the companycerned parties, a winding up order was passed on 14th June, 1991.
Madan B. Lokur, J. 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.
Whether the Tribunal had erred in directing the Assessing Officer to capitalize the value of trademarks, companyyright and technical know how by treating the same as plant and machinery and grant depreciation therein?
