TaxTMI 
TaxTMI 
2022 (6) TMI 961
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....filed under Section 260 A of the Income Tax Act, 1961 (the Act for brevity) is directed against the order dated 23.03.2016 passed by the Income Tax Appellate Tribunal A Bench, Kolkata in ITA No. 214/Kol/2011 for the assessment year 2005-6. 2. The revenue has raised the following substantial questions of law for consideration : Q1. Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in holding that no slump sale had taken place within the meaning of Section 2 (42C) of the Income Tax Act though no proper valuation of the transferred asset was made. Q2. Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in holding that no slump sale had tak....
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.... erred in law in confirming the finding of the CIT(A) on the issue of disallowance of depreciation proportionate to the compensation received by the assessee by reducing the value of compensation to Rs. 95,79,985/- from Rs. 3,52,06,915/- as assessed by the Assessing Officer thereby disallowing depreciation to Rs. 88,01,729/- being 25% of Rs. 3,52,06,915/-. Q8. Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in not appreciating that the assessee company has capitalized 100% of the value of the assets and claimed depreciation on the same. Q9. Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the addition made by the Assessing ....
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....g called as Biax Division Unit II and whether it was slump sale or otherwise. The Assessing Officer held the transaction to be treated as a slump sale as per provisions of Section 50B of the Act. The second issue was with regard to the bad debts written off by the assessee. The Assessing Officer refused to allow the deduction sought for by the assessee on the ground that the assesse has not furnished the requisite information and the said amount was added to the total income of the assessee. The third issue is with regard to the compensation received from M/s. Batenfeld, UK whether it has to be treated as a capital receipt as claimed by the assessee in its return of income. The Assessing Officer held the compensation received is nothing but....
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....tion and the revenue could not bring anything on record contrary to the finding recorded by the CIT (A). With regard to the compensation, the CIT (A) disagreed with the finding of the Assessing Officer that the compensation received, would go to reduce the cost of machinery which included waiver of 10% of invoice value of machinery. The CIT (A) taking note of the decision of the Hon'ble Supreme Court in Sourashtra Cement Ltd. and noting that 10% of the invoice value which was not paid by the assessee, would definitely go to reduce the cost of machinery capitalized by the assessee, directing the Assessing Officer to restrict the disallowance of depreciation of Rs. 95,79,985/- which is 10% of the invoice value of the machinery reducing the wr....
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.... Further, the assessee had assumed all the liabilities including the statutory liabilities till the date of transfer and therefore, held that the transfer cannot be treated as a slump sale under Section 50E of the Act. The Tribunal re-examined the facts and found that the transferee has not taken over all the loans and liabilities. The Tribunal placed reliance on its decision in the case of Tongani Tea Co. Ltd. and the appeal filed by the revenue against the said decision in ITAT No. 203 of 2016 was dismissed by the Division Bench of this Court. Therefore, we find that there is no error in the finding recorded by the Tribunal on the said issue. Accordingly, substantial questions of law No. 1 to 3 are answered against the revenue. 7. The ....
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....issue is with regard to the compensation received from M/s. Batenfeld, UK. The Assessing Officer was of the view that the entire amount of compensation had reduced the cost of the machinery and therefore, denied relief to the assessee. The correctness of the said finding was considered by the CIT (A) and after noting that the entire amount of compensation would not reduce the actual cost of machinery and there is no dispute to the fact that the assessee had capitalised the full invoice value of machinery in its books of accounts and accordingly, claimed depreciations and noting the decision of the Hon'ble Supreme Court in Sourashtra Cement Ltd. directed the Assessing Officer to restrict the disallowance of depreciation pertaining to 10% of ....