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2019 (2) TMI 47 - AT - Income TaxDeduction u/s 80IC - demerger of assessee company - Assessing Officer was of the opinion that by virtue of Explanation-7 to Section 43(1), the cost of asset should be reduced by the deferred government grants - disallowance of depreciation - Held that:- Admittedly, demerger took place in the year 2006 and thereafter whether the depreciation is to be allowed on the actual cost of demerged assets or the cost is to be reduced by any government grant received by the demerged company should have been examined in the assessment year 2007-08 and thereafter, year after year, depreciation is to be allowed on WDV. These facts are not available on record. We, therefore, direct AO to examine what happened in the preceding years. If in the preceding years the depreciation was not claimed or this issue was not considered and the facts of the case warrant the consideration of this issue in the year under consideration, then Assessing Officer will consider the same in the light of the decision of Hon’ble Apex Court in the case of Meghalaya Steels Ltd. (2016 (3) TMI 375 - SUPREME COURT). If the claim of depreciation of the assessee is allowed, then the assessed income will turn into negative income and there will be no question of claim u/s 80IC - Appeal allowed for statistical purposes.
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