1981 (9) TMI 152

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....)/VIII/CCVI/II/355/78-79 dt. 28th June,1980, holding that the actual cost for the purpose of working out depreciation in respect of machineries was Rs. 7,21,800. The facts of the case are as follows. The assessee is a private limited company. This company was a partner in a firm. The other partners were individuals. These individuals, however, were the directors in the assessee-company. The firm h....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n, the value was fixed at Rs. 7,21,800. The machinery account was credited with this figure and the excess over the book figure of Rs. 3,55,374 was transferred to the capital account of the partners according to their profit sharing ratio. The capital accounts of the partners were increased by Rs. 3,66,425. 3. The limited company allotted to the retiring partners 3,000 equity shares of Rs.100 e....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....re directors of the assessee company, after rejecting the claim, he allowed depreciation on the written down value of the plant and machinery as reflected in the income-tax records of the dissolved firm. 5. The CIT(A), however, accepted the assessee's contentions. The Department is on appeal before us. The assessee's case is completely covered by a decision of the Supreme Court in Kaluram Govin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....oses the cost of an asset to a divided member must necessarily be its cost to him at the time of partition. We are of opinion that this principle is clearly applicable not only in the case of partition of a joint family but also in the case of dissolution of a firm. In both, the rights and liabilities of the members of the association are being determined. In this case, the enhanced value of the a....