Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 480 - AT - Income TaxDepreciation on assets on demerger - actual cost as per section 43(1) of the Income Tax Act, 1961 was nil - demerger in terms of explanation 4 to section 2(19AA) recognised - AO has disallowed depreciation on the ground that the assessee had received assets free of cost from the Government of Uttaranchal - HELD THAT:- In this case, the assets have been transferred from Uttar Pradesh Government (UPJVNL) to Uttaranchal Government (UJVNL). There is no claim of the depreciation twice by both the Governments. The demerger led to division of assets in a fixed ratio and the same was duly accounted for both the entities as per the written down value (WDV) as on that date. The depreciation on de-merger cannot be a forgone benefit owing to de-merger, which is the result of state reorganization. Hence, we decline to interfere with the reasoned order of the Ld. CIT (A). Prior Period expenses - disallowance of expenses as it do not relate to the previous year under consideration - HELD THAT:- We find in all the years the certain expenses like repair and maintenance, employee cost, administrative cost, administrative expenses which pertain to earlier years having claimed in the current year. It was submitted that due expenses or business expenses and having crystallized during the year. These expenses are overlapping over the years and no double deduction has been claimed. These are the spillover expenses which pertain to more than one previous year and the similar system has been followed continuously in all the years. The Assessing Officers sole reason for disallowance is that they do not relate to the previous year under consideration. However in reality it is found that these expenses belong to the previous year but crystallized in the instant year. In the absence of any change in the tax rate for the successive years the interests of revenue are not jeopardized. Hence, we decline to interfere with the Ld. CIT(A) on this grounds. - Decided against revenue.
|