TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 1417
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....olding that the employee's contribution to PF and ESI beyond period stipulated in Sec.36(1)(va) r.w.s 2(24)(x) and Sec.43B and paid on or before the due date for furnishing return u/s 139(1) as deductible expenditure. Further, the circular No.22/2015 dated 17/12/2015 relied by CIT(A) does not apply to claim of deduction relating to employees contribution. 3. For these and other grounds that may be urged upon, the order of the CIT(A) may be reversed and that assessment order be restored. 4. The appellant craves leave to add, alter, amend or delete any other grounds on or before hearing of the appeal." 3. During the course of hearing, the ld. counsel for the assessee has invited our attention that the impugned ground is squarely covered by the judgment of the Hon'ble jurisdictional High Court in the case of Sabari Enterprises in which it was held by the Hon'ble jurisdictional High Court that contributions to the Provident Fund and Employee State Insurance beyond the period stipulated in section 36(1)(VA) r.w.s. 2(24)(x) and section 43B of the Act, but paid on or before the due date for furnishing return u/s. 139(1) is deductible. The CIT(Appeals) has decided the i....
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....te that where it was intended that the transfer of assets should not take place at a value higher than the book value, the same has been explicitly provided for as in the case of Section 2 (19AA) of the Act which explains the term de merger. 7. The lower authorities have failed to appreciate that in cases where it was intended that the effect of revaluation need to be ignored the same has been explicitly provided for as envisaged under Section 50B of the Act, dealing with Computation of capital gains in a slump sale. 8. Without prejudice to the above, the lower authorities have failed to appreciate that the revaluation of the assets of the firm has to be necessarily carried out and the partners' accounts have to be necessarily credited in respect of such revaluation when the business of the firm is succeeded to by the company keeping in mind the business reality that the shares of the company may be listed or venture capitalists may invest in the company. 9. The lower authorities have failed to appreciate that Section 43(1) of the Act which defines the term 'actual cost' nowhere stipulates that the incurrence of the expenditure needs to be necessarily in cash. ....
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.... the Tribunal in earlier AY 2012-13. The Tribunal following its order for earlier years had decided the issue in favour of assessee, after holding that depreciation is allowable on intangible assets. The relevant observations of the order of Tribunal are extracted hereunder for the sake of reference:- "8. With respect to ground No.2, it is pointed out by the learned DR that this issue is covered against the assessee in the assessee's own case for earlier assessment years from 2005-06 to 2008-09 in ITA Nos.429 to 430/Bang/2013 dated 10/1/2014, wherein at paragraph 16 to 25 it has been held as under: ""16. The first question for adjudication before us is whether the earlier partnership firm was required under law to revalue the assets before its conversion into a company. As rightly pointed out by the learned counsel for the assessee, when a partnership firm is dissolved, it needs to revalue its assets as the partners are entitled to receive the value of the assets as on the date of dissolution in the ratio of their contribution of capital and, therefore, to arrive at the value of the assets as on the date of dissolution the revaluation of assets and liabilities is required to b....
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....ngg and Manufacturing Works reported in (2003) 263 ITR 345 (Bom) has considered the effect of conversion of a partnership firm into a limited company by virtue of sec. 575 of the Companies Act and has held that under part IX of the Companies Act, when a partnership firm is converted to a limited company, the properties of the erstwhile firm vests in the limited company. It was observed that there is a difference in vesting of the property and distribution of the property. It was held that on vesting in the limited company under part IX of the Companies Act, the properties vest in the company as they exist while distribution of property on dissolution pre-supposes division, realization, encashment of assets and appropriation of the realized amount as per the priority and that this difference is very important. Having observed thus, the Hon'ble High Court held that there is no transfer of property and no capital gains arise from such a transaction. The Hon'ble High Court was dealing with the case of the partnership firm while in the case on hand, we are dealing with the case of the company. In the case of Texspin, the questions considered were - (1) whether capital gains arose in ....
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.... in the hands of the predecessor firm shall be considered for the allowance of depreciation. 20. Therefore, we do not see any reason to interfere with the orders of the authorities below. 21. The learned counsel for the assessee had placed reliance upon the decision of ITAT at Ahmedabad in the case of Prakash Chemical Agencies Pvt. Ltd. reported in (2012) 136 ITD 222 (Ahd) but we find that it is the case of a takeover of the business of a partnership firm by the assessee company therein whereas in the case before us, it is the case of conversion of partnership firm into a company. Therefore, the said decision is not applicable to the case on hand. 22. The other objection of the learned counsel for the assessee is that the conversion has taken place in the previous year relevant to assessment year 2004-05 and hence it can be examined only in A.Y 2004-05 and not in subsequent year. We are unable to argue with this contention of the assessee. Sub-sec(6) of sec. 43 defines 'Written Down Value' and it provides for both the acquisition of assets during the relevant previous year and acquisition of assets before the relevant previous year and both the clauses mention 'actual cost....