https://www.taxtmi.com/caselaws?id=184063 Income-tax authorities may disregard an artificial contract price and determine the real original cost of assets for depreciation, because depreciation is based on actual cost and contractual recitals do not bind where the stated price is fictitious. A debenture borrowing found to be a colourable, roundabout arrangement without genuine commercial substance will not support deduction of the claimed interest. An exchange structured around shares, but substantially securing a ten-year ginning contract at below-market rates, was treated as yielding present taxable income rather than a mere capital transaction, and the 20,000 shares received could be valued at market value for computing profit. en-us Mon, 04 Mar 1940 00:00:00 +0530 Tue, 28 Jun 2016 18:01:52 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=184063 Income-tax authorities may disregard an artificial contract price and determine the real original cost of assets for depreciation, because depreciation is based on actual cost and contractual recitals do not bind where the stated price is fictitious. A debenture borrowing found to be a colourable, roundabout arrangement without genuine commercial substance will not support deduction of the claimed interest. An exchange structured around shares, but substantially securing a ten-year ginning contract at below-market rates, was treated as yielding present taxable income rather than a mere capital transaction, and the 20,000 shares received could be valued at market value for computing profit. Case-Laws Income Tax Mon, 04 Mar 1940 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=184063