2015 (10) TMI 1442

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....nt year 2010-11. The Revenue is aggrieved by the decision of the learned Commissioner of Income-tax (Appeals) in holding that the provisions of Explanation 3 to section 43(1) is not applicable to the secondhand windmill purchased by the assessee. The assessee is aggrieved by the decision of the learned Commissioner of Income-tax (Appeals) in determining the value of second hand machinery at Rs. 1.50 crores in the place of cost of purchase of Rs. 2.36 crores. 2. The facts relating to the abovesaid issue are that the assessee has purchased a second hand windmill on March 23, 2009, from M/s. Soundararaja Mills Ltd. for a value of Rs. 2.36 crores. The assessee claimed depreciation of Rs. 1.12 crores on the abovesaid value. The Assessing Offi....

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....  "Explanation 3.-Where, before the date of acquisition by the assessee, the assets were at any time used by any other person for the purposes of his business or profession and the Assessing Officer is satisfied that the main purpose of the transfer of such assets, directly or indirectly to the assessee, was the reduction of a liability to income tax (by claiming depreciation with reference to the enhanced cost), the actual cost to the assessee shall be such an amount as the Assessing Officer may, with the previous approval of the Joint Commissioner, determine having regard to all the circumstances of the case." A careful perusal of the above said provisions would show that the same relates to the determination of "actual cost" to t....