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2023 (6) TMI 823 - BOMBAY HIGH COURTDepreciation - Cost of acquisition - depreciation to be allowed on WDV of the predecessor or Revaluation of assets - Conversation of firm to a company - Consideration paid in shares in lieu of Cash - ITAT held that assessee is eligible for claiming depreciation on revalued assets - HELD THAT:- As for assessment year 2008-09, predecessor, i.e., the partnership firm has claimed depreciation for five months from 01/04/2007 to 31/08/2007 and successor, i.e., assessee has claimed depreciation for assessment year 2008-09 for the period from 01/09/2007 to 31/03/2008. If succession had not taken place during assessment year 2008-09 and the predecessor, i.e., the partnership firm would have claimed Rs. 1 crore as depreciation, both predecessor and successor for that year could claim together only Rs. 1 crore as depreciation and nothing more. Admittedly, this is what happened in the case at hand also. Appeal pertains to AY 2009-10 in which year the asset is clearly owned by successor, i.e., assessee. The assessee as per Section 32 r/w Rule 5 of the Act quoted above, will be entitled to claim depreciation in respect of any assets on the actual cost of the said assets. The actual cost of the said assets will be the actual cost which the assessee paid to the predecessor after revaluing the assets and certainly in our view assessee will be entitled to claim depreciation for the subsequent years on the basis of the actual cost paid. Appellant submitted that for the actual cost no money was paid but shares were issued in lieu of cash. Certainly that will be the cost which assessee has paid to procure the assets. This is the reason given by ITAT in the impugned order and we are in agreement with the view expressed by ITAT.
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