TaxTMI 
TaxTMI 
2022 (7) TMI 585
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....ed in restricting the claim of the Assessee for depreciation on the value of the building as revalued prior to conversion of the erstwhile partnership firm into a private limited company and which asset was transferred by the erstwhile partnership firm to the private limited company i.e., the Assessee on it's becoming a private limited company. 3. The facts and circumstances giving raise to the above common issue are that the Assessee is engaged in the business of manufacture of Air, Oil and Diesel Filters for Automotive Industries and Industrial Filters for various industries leading to clean room technologies & pollution control environment. The Assessee was originally incorporated in the name of M/s.M.N.Ramarao and Filters Private Limit....
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....27th Nov 2008, M/s.Filtrauto, SA France had transferred a sum of Rs.13.20 Crores as part of consideration towards fresh issue of 589348 equity shares and Rs.8.16 Crores to one of the partner's account towards consideration for transfer of 364,261 shares by all other partners after necessary clearance from appropriate authorities. 7. On receipt of the money towards the fresh issue of shares, the Assessee repaid all its un-secured loans that stood in the name of the partners in the books of the Assessee. 8. On acquiring 60% stake in the company, the name of the company was changed to M/s. Sogefi MNR Filtration India Private Limited. The Assessee had filed its first income tax return for the year ended 31st March 2009 related to the asse....
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.... crores the same value was adopted in the books of the Assessee after conversion into company and deprecation was claimed on the revalued asset. The Assessee has not claimed additional depreciation of Rs 2,80,450 in terms of section 32 (1) (iia) in the case of new plant and machinery acquired and installed after 22.7.2008 and the depreciation was reworked and only for the period starting from 22.7.2008 to 31.3.2009 as against the entire year. 11. The CIT(A), however, upheld the order of the AO. She held that depreciation as per the Act is provided only on the actual cost of the asset. She held that the Assessee has not been able to produce any evidence to prove that additional sum of Rs 1.2 crores was paid towards the building so as to con....
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....oceed to decide these appeals on the basis of the material available on record after hearing the submissions of the learned DR, who relied on the order of the AO/CIT(A). 14. We have considered the orders of the revenue authorities. The disputed disallowance of depreciation in the all the three AYs is consequent to the revaluation of the building and enhancing the cost of the building by Rs.1.20 crores when the partnership firm was converted into a private limited company. The question is whether the sum of Rs.1.20 crores can be considered as actual cost on which depreciation is to be allowed. In terms of Section 32(1) of the Act, depreciation should be computed at the prescribed percentage on the Written Down Value (WDV) of the asset. In t....
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....t to revaluation prior to conversion of the partnership firm into a private limited company, in the case of Padmini Products Pvt. Ltd. Vs. DCIT ITA No.154 of 2014 judgment dated 5.10.2020. The Assessee in that case was a private limited company that got converted from partnership firm to a company. The Assessee in that case was a company, engaged in the business of manufacturing, dealing and exporting of incense sticks and allied products. The Assessee succeeded a partnership firm (firm) w.e.f. 1 February 2005. Before the firm was converted into private limited company, the firm had revalued all its intangible assets using standard valuation methods. All assets and liabilities (including the intangible assets) of the firm were transferred t....
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....te authority as well as by the Tribunal. On further appeal by the Assessee, the Hon'ble Karnataka High Court held that as per section 43(1) "actual cost" means the actual cost of the assets to the taxpayer, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority Explanation 3 to section 43(1) of the Act provides that 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 AO is satisfied that the main purpose of the transfer of such assets, directly or indirectly was to claim depreciation with reference to an enhanced cost, the AO shall with the previous approval Depu....