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2019 (6) TMI 1112 - AT - Income TaxDetermination of value of assets transferred on Demerger / Succession - distribution of assets between 5 companies - WDV of block of assets transferred is available - AO sought the value / cost of individual assets and there physical existence - HELD THAT:- The Hon’ble Delhi High Court in the case of Dalmia Ceramic Industries Ltd. Vs. CIT [2004 (10) TMI 72 - DELHI HIGH COURT] has held that actual cost of the transferee company on the date of transfer is indicated in Section 43(1), explanation-6, is the written down value of the holding company. When the assessee has received these assets being transferred from RSEB at written down value and therefore, when the existence of these assets were not in dispute at the hand of the RSEB as part of the balance sheet of the Board then the assets transferred under the statutory transfer scheme to the assessee at the written down value under the block of assets were eligible for depreciation in the hands of the successor/transferee. Accordingly, we set aside the order of the authority below on this issue and allow the claim of the assessee. Determination of actual cost of acquisition - consideration partly paid by the consumers and some part has been paid by the State Government as subsidy - Disallowance of depreciation by invoking the provisions of Section 43(1) r.w. explanation 10 - HELD THAT:- As regards the deduction received from the consumers, we find that the said amount is nothing but reimbursed of the cost of acquisition of the asset which is used by the assessee for providing the supply to the consumer and therefore, to that extent the provision of Section 43(1) r.w. explanation 10 are application hence, to that extent the order of the authorities below are upheld. It is pertinent to note that if the subsidy is given by the State Government or Central Government in respect of a particular expenditure laid out for acquisition of the assets then the same would be falling in the explanation 10 of Section 43(1) of the Act and required to be reduced from the actual cost of the assets. However if the subsidy is not a specific expenditure or expenses of distribution line or providing supply in a particular case then the same cannot be considered as directly or indirectly meeting the cost of asset or reimbursement of cost of the asset. - Matter restored before AO for verification of facts accordingly. Applicability of provisions of Section 115JB for the purpose of MAT - electricity company - scope and applicability of Ruling of AAR - HELD THAT:- Assessee was required to obtain the licence U/s 80 of the Electricity (Supply) Act, 1948 and therefore, the function of the assessees are governed by Electricity (Supply) Act as well as Rules framed thereunder. As per the Electricity (Supply) Annual Accounts Rules, 1985 and Account Instructions the annual statements of the distribution company are defined as it is prepared as per Rule-5(1) of the Rules. The assessee is not required to maintain the books of accounts as per schedule VI of the Companies Act but the accounts are to be maintained as per Electricity (Supply) Annual Accounts Rules, 1985 and Account Instructions. There is no dispute that the account of the assessee are audited through CAG and hence, even as per audit report the accounts of the assessee were examined in light of the Electricity (Supply) Act and Rules. Further, when the authority of advance ruling has already decided this issue in the matter of Jodhpur Vidyut Vitaran Nigam Limited then the provisions of Section 115JB for the purpose of MAT are not applicable in the case of the assessee. Revenue was not brought any record before us to show that the ruling of Authority for Advance Ruling (Income Tax), New Delhi has been either reversed or set aside. Accordingly, in the facts and circumstances of the case we hold that the provisions of Section 115JB as existed at the relevant point of time for the years under consideration prior to the amendment by Finance Act, 2012 are not applicable in the case of the assessee. Disallowance of prior period expenses - HELD THAT:- As relying on assessee own case [2017 (5) TMI 1682 - RAJASTHAN HIGH COURT] decided in favour of assessee.
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