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2019 (6) TMI 234 - AT - Income TaxComputation of Long Term Capital Gain u/s 50B - Total Consideration for transfer of undertaking - HELD THAT:- When the Agreement itself provides for the manner of computing ‘Total Consideration’ for transfer of undertaking, the same should govern the manner of adopting ‘Total Consideration’ and no other method should be substituted for the same. The consideration is the amount that is determined to be payable by the buyer to the seller and is agreed upon by the seller, as such. The manner of determination of the consideration is mutually decided by the buyer and seller and stated in the Agreement and once it is adopted by the assessee, the same cannot be faulted by the income tax authorities. It is not the case of the AO that assessee has made adjustments to ‘Total Consideration’ over and above what is provided for in the Agreement. The observation of the CIT(A) that no adjustment to ‘Total Consideration’ is permissible in terms of section 50B of the Act is not relevant in deciding the present controversy. Assessee furnished documents in the form of Master Agreement dated 31.07.2010, financial statements of the assessee for Financial Year 2010-11 and Financial Year 2011-12, Bank guarantee, letter for invocation of bank guarantee, etc. to support the claim of adjustments stipulated in the Master Agreement. Assessee has correctly reduced the secured liabilities and bank guarantee, which was invoked by the purchaser, while arriving at total consideration for the purpose of computation of capital gains in terms of section 50B Disallowance of repairs and maintenance expenses - HELD THAT:- Admittedly, it is not the case of the Assessing Officer that the impugned expenditure has resulted into creation of a new asset. The quantum of expenditure cannot be the guiding factor to decide whether the expenditure is in the nature of capital expenditure or revenue expenditure. The expenditure incurred by the assessee is towards maintenance of the existing godown and was thus in the nature of current repair. Further more, the benefit to the assessee is in the revenue field in as much as assessee is earning income which is being assessed as business income. We, thus, set-aside the order of the CIT(A) and allow the assessee’s claim of repairs and maintenance expenses. In result, this Ground of the appeal is allowed. Disallowance of depreciation on motor car - purchased in the name of Director and expenses incurred by the assessee - HELD THAT:- It is a well settled proposition that merely because the asset is purchased in the name of director, the company cannot be denied depreciation on the same, if the asset is otherwise found to be used for the purpose of business. The decision relied upon by the assessee in the case of CIT vs. Dilip Singh Sardarsingh Bagga [1992 (9) TMI 74 - BOMBAY HIGH COURT] clearly supports the stand of the assessee. We, thus, set aside the order of CIT(A) and direct the AO to allow depreciation on the motor vehicle and related expenses on motor vehicle. Accordingly, this Ground of appeal is also treated as allowed.
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