TMI Blog2015 (1) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the said deal. Thus no mistake in CIT [A] as well as Tribunal in concluding that Explanation 3 to Section 43 of the Act was not required to be invoked. The first issue need no consideration therefore as no substantial question of law has arisen. Decided against revenue. For the removal of doubts, it is hereby declared that where any amount is paid or is payable as interest in connection with the acquisition of asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such asset.The Tribunal has relied upon a decision of the Apex Court in the case of TRF Ltd. Vs. CIT reported in (2010 (2) TMI 211 - SUPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also holding valuation report of Valuer as valid despite of the fact brought on record by the AO that valuation report was made after the transaction and 40% addition on account of time factor was not a prescribed method for valuation of plant and machinery? (B) Whether the Tribunal is right in law and on facts to delete the disallowance of ₹ 64,69,017/- on account of interest expenditure on unpaid purchase consideration? 3. The assessee company was incorporated on 20.10.1996 and is involved in the business of extrusion of stainless steel pipes and tubes. Vide an agreement dated 04.12.1996, EMD undertaking was transferred as a going concern at a slump price of 100 crores on as is where is basis. During the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration paid amounting to ₹ 100 crores. He contended that the Tribunal erred in holding that the CIT(A) made no mistake in concluding that Explanation 3 to Section 43(1) of the Act was not applicable to the facts of the case. 5. Having heard Mr. Mehta and having gone through the records of the case, we are of the opinion that these appeals do not deserve consideration inasmuch as the issue involved in the appeals is squarely covered by a decision of this Court dated 23.09.2014 rendered in Tax Appeal No. 1071 of 2014. The relevant paragraphs read as under: 9. Section 43 of the Act prescribes definitions of certain terms relevant to income from profits and gains of business or profession. Sub-section (1) of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transfer of assets, direct or indirectly to the assessee, was the reduction of a liability of income tax by claiming depreciation with reference to an enhanced cost. In such circumstances, the actual cost to the assessee can be determined by the Assessing Officer having regard to all the circumstances of the case, with the previous approval of the Joint Commissioner. 10. It can be noted from the record that at the time of transfer of the assets, the assessee had no income for it to reduce its tax liabilities by way of such transfer, and therefore, both the CIT [A] and the Tribunal had rightly concluded that the Assessing Officer was in error in invoking Explanation 3 to Section 43 for determining actual cost in the said deal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any period after the asset has first been put to use, in the computation of its actual cost. By this Explanation, it has been declared by Parliament that, where any amount is paid or is payable as interest in connection with the acquisition of an asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such assets. Parliament, in the above Explanation, has taken full care to couch the Explanation in the widest possible terms to avoid any further controversy in regard to the very same issue on the basis of the manner of payment of interest or time of payment thereof. This has been done by the use of express ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
