TaxTMI 
TaxTMI 
2019 (6) TMI 234
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....earned CIT (Appeals) has erred in law and on the facts of the case in not appreciating the fact that the net sale consideration received by the assessee against the demerger was Rs. 47,01,10,609/- as against the gross sale-consideration of Rs. 78,98,20,000/-. (c) The learned CIT (Appeals) has erred in law and on the facts of the case in not appreciating the fact that as per clause 3.2 of the agreement with M/s. Huntsman Investments (Netherlands) B. V. the total consideration was to be reduced by the debts payable by the assessee. (d) The learned CIT (Appeals) has erred in law and on the facts of the case in not appreciating the fact that the assessee has only one manufacturing unit at Ankleshwar which was demerged and the demerger involved transfer of all fixed assets, current assets, secured loans and current liabilities. 2. The learned CIT (Appeals) has erred in law and on the facts of the case in sustaining the order of the assessing officer disallowing repairs and maintenance Rs. 94,11,574/-. 3. The learned CIT (Appeals) has erred in law and on the facts of the case in sustaining the order of the assessing officer disallowing depreciation on ....
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....ficer denied reduction for the liabilities of the unit which were paid for by the assessee, reduction for bank guarantee provided by the assessee and loss on sale of vehicle. In this context, the Assessing Officer noted that assessee had filed two reports of the Accountant dated 06.09.2012 in Form 3CEA in terms of sub-section (3) of section 50B of the Act reporting different figures for computation of Long Term Capital Gains under section 50B of the Act. The Assessing Officer further noted that the Master Agreement provides for certain adjustments to the total consideration stated in the agreement, but in absence of any details and explanation, the adjustments mentioned in the Master Agreement for computation of total sale consideration was not taken into consideration and gross consideration of Rs. 78,98,20,000/- was taken as base to compute Long Term Capital Gain. The assessee, in the course of assessment proceedings explained the reason for difference in two reports in Form 3CEA. The CIT(A), however, noticing that no adjustment is permissible to consideration as per section 50B of the Act, rejected the submissions of the assessee and confirmed the action of Assessing Officer.....
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....ct. Thirdly, in terms of the Clause 7 of the Master Agreement, assessee provided a Bank Guarantee in favour of the Purchaser for an amount of Rs. 9,29,20,000/- for the purpose of paying and bearing the Purchaser Losses for a period of 18 Months from Closing date. The Purchaser invoked the Bank Guarantee provided by the assessee and withdrawn the amount of Rs. 9,29,20,000/-. The copy of the bank guarantee provided by the assessee is placed at page no. 120-125 of the Paper Book. Further, letter from the bank confirming invocation of the bank guarantee by the Purchaser is placed at page no. 127 of the Paper Book.The learned representative for the assessee explained that the payment for bank guarantee is covered under the head "adjusted by the Audited Net working Capital Differential",and thus, was also reduced while arriving at the total consideration. In this context, the learned representative for the assessee referred to letter addressed by the Purchaser for invoking bank guarantee. Further, assessee reduced miscellaneous liabilities of Rs. 95,646/-. Lastly, assessee deducted the loss on sale of vehicle of Rs. 17,70,034/-. 5.2 The learned representative for the assessee further ....
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.... Clause no. 3.2 of the Agreement clearly provides for the manner of determination of the total consideration for the sale of undertaking, which fact is not disputed by the Assessing Officer. The said clause provides for certain adjustment to be made to the consideration of Rs. 78,98,20,000/- stated in the Agreement to arrive at the amount of 'Total Consideration'. Admittedly, the Assessing Officer has not made those adjustments and has directlytaken consideration at Rs. 78,98,20,000/-.As can be seen from the assessment order, even Assessing Officer states that certain adjustments were in fact required to be made as per the agreement, however in absence of details and explanation with respect to those adjustments he has not carried out the same. The CIT(A) has also confirmed the action of the Assessing Officer and further held that no adjustment to the amount of consideration is permissible in terms of section 50B of the Act. Before us, the learned representative for the assessee explained the adjustments carried out by the assessee while arriving at the amount of total consideration along with the supporting documents, which are placed in the Paper Book. Thus, limited issue befo....
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....nses submitted by the assessee, the Assessing Officer noted that these expenses are one time expenditures, the benefit of which is not restricted to one year. The Assessing Officer, thus, treated these expenses to be capital in nature and disallowed the same under section 37(1) of the Act. It was explained that during the year assessee was engaged in the warehousing business; the godown was in a dilapidated condition, the same was got repaired and was brought to a condition acceptable to the lessee i.e. Laffans Fine Chemicals Pvt. Ltd. During the year under consideration, the assessee has declared income from warehousing of Rs. 45,50,000/-, which is offered as business income and thus, corresponding business expenses should be allowed. So it cannot be said that assesse has not carried out any business activities. Before CIT(A), assessee reiterated the submission made before the Assessing Officer, however same did not find any favour with the assessee. 6.1 Before us, the learned representative for the assessee pointed out that the assessee has entered into logistic agreement with the resulting company, M/s. Laffans Fine Chemicals Pvt. Ltd. Pursuant to the said agreement, the asse....
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....t acceptable to the lessee. 6.4 It is pertinent here to refer to the decision of the Hon'ble Bombay High court in the case of CIT v. Chowgule& Co. Pvt. Ltd. (1995) 214 ITR 523 (Bom) wherein court has considered the expression 'current' preceding 'repairs' as under :- "(i) The amount should be paid on account of repairs. (ii) 'Current repairs' means repairs undertaken in the normal course of user for the purpose of preservation maintenance or proper utilization or for restoring it to its original condition. (iii) 'Current repairs' do not mean only petty repairs or repairs necessitated by wear and tear during the particular year. (iv) Such repairs should not bring into existence nor obtain a new or different advantage. (v) The quantum of expenditure nor the fact that in the process of repairs, there was substantial replacement of the parts of machine or ship is decisive of the true nature of the expenditure. (vi) The original cost of the asset is not at all relevant of or ascertainment of the true nature of the expenditure on repairs. (vii) The replacement cost of the asset may however, at times may be used as indicato....