June 2025
Section 50 applies only if the asset qualifies for inclusion in block of assets and therefore for grant of depreciation. Accordingly, section 50 was held not to apply to gains on transfer of trademarks since they were acquired by the assessee before the amendment by Finance (No. 2) Act, 1998 providing for inclusion of intangible assets in block and grant of depreciation thereon.
14. TS – 131 – ITAT – 2025 (Mum.)
Johnson & Johnson Pvt. Ltd. vs. DCIT
A.Y.: 2011-12 Date of Order: 10 February 2025
Sections : 2(11), 32, 50
Section 50 applies only if the asset qualifies for inclusion in block of assets and therefore for grant of depreciation. Accordingly, section 50 was held not to apply to gains on transfer of trademarks since they were acquired by the assessee before the amendment by Finance (No. 2) Act, 1998 providing for inclusion of intangible assets in block and grant of depreciation thereon.
FACTS
During the previous year relevant to the assessment year under consideration, the assessee, engaged in the business of manufacturing and sale of pharmaceutical formulation, sold two trade marks “Coldarin” and “Raricap”. Gains arising on transfer of these trademarks were offered for taxation under the head “Capital gains” as long-term capital gains. The Assessing Officer (AO) issued show cause notice asking the assessee to explain why the gains were offered as “long-term” and not as “short-term”. In response, the assessee submitted that the trademark “Coldarin” was acquired
