https://www.taxtmi.com/caselaws?id=16397 Whether depreciation could be claimed on assets taken over from a dissolved partnership at a revalued figure was determined by applying s. 43(1) and Explanation 3 of the IT Act. Although revaluation may be relevant in partnership accounting to adjust partners' rights on dissolution, s. 43(1) with its Explanations overrides general partnership law for computing "actual cost" for depreciation. Where assets were previously used by another person and the main purpose of transfer is to secure a higher depreciation allowance to reduce tax liability, Explanation 3 empowers the AO to substitute a reduced actual cost notwithstanding revaluation. Depreciation on the revalued figure was denied, and Explanation 3 was held attracted, in favour of Revenue. en-us Tue, 03 Feb 1998 00:00:00 +0530 Tue, 30 Dec 2025 14:38:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=16397 Whether depreciation could be claimed on assets taken over from a dissolved partnership at a revalued figure was determined by applying s. 43(1) and Explanation 3 of the IT Act. Although revaluation may be relevant in partnership accounting to adjust partners' rights on dissolution, s. 43(1) with its Explanations overrides general partnership law for computing "actual cost" for depreciation. Where assets were previously used by another person and the main purpose of transfer is to secure a higher depreciation allowance to reduce tax liability, Explanation 3 empowers the AO to substitute a reduced actual cost notwithstanding revaluation. Depreciation on the revalued figure was denied, and Explanation 3 was held attracted, in favour of Revenue. Case-Laws Income Tax Tue, 03 Feb 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=16397