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2015 (9) TMI 893 - AT - Income TaxDisallowance on account of depreciation on plant & machinery purchased from the sister concerns - CIT(A) allowed claim - applicability of Explanation 3 to section 43(1) of the Act on the given set of facts - Held that:- The phraseology of the Explanation is plain and simple. It is the “main purpose” and not secondary purpose or some incidental benefits arising from such transaction which can trigger Explanation 3 to S. 43(1). Once the overwhelming commercial advantage from the transaction is displayed, which is done in the instant case, the other considerations fade into insignificance. Thus, while the assessee has clearly demonstrated its bona-fide, the Revenue could not contradict any averment of the assessee.There is no material in possession of the Assessing Officer to enable him to displace the cost of acquisition declared by the Assessee. Further, the WDV of assets in the case of M/s KEL was ₹ 47,58,848/-, which was taken at NIL by Assessing Officer. There is no rationale for such action. The Assessee on the other hand has supported the valuation of the assets by the Valuation Report of the Registered Valuer and in absence of onus being discharged by the Assessing Officer, the applicability of Explanation 3 to section 43(1) of the Act by the Assessing Officer is not justifiable in the facts of the case. The assessee is entitled to claim of depreciation on the acquisition of assets and technical know-how, we uphold the order of the CIT(A). - Decided in favour of assessee. disallowance of expenses concerning tool room acquired made to its sister concern - Held that:- Considering Revenue submission that it is not clear as to why the expenses were not claimed in the original return and claimed only by way of revised return and whether these debit notes were available before the Assessing Officer for necessary enquiry or not and assessee submission that the debit notes are dated 30th September, 2005 i.e. after the finalization of account pertaining to the relevant assessment year and therefore the claim has been made by way of filing the revised return to take cognizance of the legitimate expenses incurred by M/s KEL on behalf of the assessee we remit the issue back to the file of the Assessing Officer to decide the claim of assessee after affording proper opportunity of hearing to the assessee. Decided in favour of assessee for statistical purposes.
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