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2015 (1) TMI 561 - AT - Income TaxGrant of depreciation - written value of block of assets as per books of account of the assets taken over from the demerged company v/s written down value as per the provisions of Income Tax Act of the transferred assets of the demerged company adopted by the lower authorities - whether CIT(A) erred in holding that amendment in Explanation 2B to section 43(6) of the Act by Finance Act, 2003 with effect from assessment year 2004-05 will have retrospective effect and will also apply to a demerger in assessment year 2003-04? - Held that:- The explanations 2A and 2B were inserted by Finance Act, 1999 w.e.f. 01.04.2000. The relevant words under clause 2A were “written down value of the block of assets of the demerged company” whereas the corresponding relevant words under clause 2B were “the value of assets as appearing in the books of accounts”. However, a subsequent amendment was made vide Finance Act, 2000 w.e.f. the same date i.e. 01.04.2000 vide which the words “the value of the assets as appearing in the books of account” were substituted with the words “written down value of the transferred assets as appearing in the books of account”. However, immediately, before these provisions come into operation, an amendment was brought out in explanation 2B and the relevant words were substituted with ‘written down value of the transferred assets’. However, the other relevant words “as appearing in the books of account” were not omitted. If we take the contention of the assessee as correct, then in that event there would not have been any impact or change in the interpretation of the relevant provisions even after the amendment made by Finance Act, 2000. whatever rights had accrued to the assessee in view of the ambiguity in the provisions at the time of their insertion vide Finance Act, 1999, the same had been taken away/clarified immediately by removing the ambiguity through amendment made vide Finance Act, 2000. Hence no hesitation to hold that the proposition laid therein cannot be applied to the facts and circumstances of the case in hand. - Decided against the assessee. Non chargeability of interest under section 234B of the Act - Held that:- Now the law has been settled that the levy of interest under section 234B is mandatory. - Decided against the assessee. Irrecoverable inter corporate deposits written off - CIT deleted disallowance - Held that:- finance business of the demerged company was further carried over by the assessee company, though, it was not the exclusive business but one of the business activities of the resulting company. The condition of passing the entry through P&L account is not mandatory in case of money lent in the business of money lending even as per the provisions of section 36(2)(i) of the Act. Thus infirmity in the order of the Ld. CIT(A) on this issue and the same is accordingly upheld. - Decided against revenue.
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