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2020 (9) TMI 335 - HC - Income TaxFixation of the value of the second-hand windmill - Depreciation on windmill - valuation method adopted by the assessing officer to determine the cost of the windmill - Consideration of valuation report given by an approved government valuer of the Canara Bank - Whether the actual purchase price of a second-hand asset can be ignored by purported recourse to Explanation 3 to Section 43(1) of the Income Tax Act, 1961 ? HELD THAT:- CIT[A], in our considered view, while partly allowing the assessee's appeal, proceeded to make a adopt estimations of the value and fixed the sum at ₹ 1,50,00,000/-. We find that there is no scientific basis for such fixation of the value of the second-hand windmill and such fixation has been done based on the personal opinion of the CIT[A]. Tribunal was fully justified in allowing the Revenue's appeal. With regard to the assessee's appeal, the Tribunal re-appreciated the factual position and in particular, noted that the manufacture of the windmill has certified that the windmill, which was sold to the assessee is no more in the market value and the technology has become obsolete. The Tribunal also considered as to what would be the effect of a report of the government valuer and noted Explanation III to Section 43(1), which requires the AO to arrive at an objective satisfaction. Tribunal observed that valuations may be relevant in ordinary circumstances, but when cumulative depreciation claimed was far in excess of the cost, the valuation report of the approved valuer becomes insignificant. Tribunal has reappreciated the factual position and come to a conclusion that the order passed by the assessing officer requires no interference. No substantial question of law.
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