1985 (3) TMI 14

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....RAMANUJAM J.-At the instance of the Revenue, the following question has been referred for the opinion of this court by the Appellate Tribunal : " Whether, on the facts and in the circumstances of the case, the cost to the assessee for the purpose of computing profit assessable under section 41(2) of the Income-tax Act, 1961, is the cost at which it was valued in the partition deed and without t....

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....'s family headed by the karta, S. Balasubramanian, and also the liabilities mentioned in the E schedule. This consisted of land together with buildings and laboratory buildings in which certain plant and machinery had been erected. In the partition deed, the plant and machinery had been valued at Rs. 8,70,826 which is the written down value of the assets in the incometax records of the larger Hind....

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.... assess under section 41(2) of the Act, the said initial depreciation in the hands of the smaller Hindu undivided family headed by Balasubramanian who is the assessee in this case, in proportion to the value of the machinery allotted to the family. This was objected to by the assessee. However, the Income-tax Officer rejected the assessee's contention and proceeded to withdraw the proportionate in....

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....ore us. However, a mere reading of section 41(2) of the Income-tax Act will clearly show that the order of the Income-tax Officer withdrawing the proportionate initial depreciation granted in the hands of the bigger Hindu undivided family by invoking section 41(2) cannot legally be sustained. As has been held by the Tribunal, first of all, there is also no identity between the person who got th....