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COMMISSIONER OF INCOME TAX Versus KANDLA PORT TRUST

2016 (8) TMI 111 - GUJARAT HIGH COURT

Depreciation computation - whether the depreciation should be allowed on the original value of assets even though certain assets were old and obsolete and the respondent had claimed depreciation in its books of accounts for the same? - Held that:- The depreciation provided in the books in the years when the income was exempt cannot be treated as the depreciation “actually allowed”. Accordingly, it was held that as the assessee was not required to compute profits and gains of business or professi .....

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, Explanation 6 has been inserted in sub-section (6) of section 43 to clarify that in such a case - - (a) the actual cost of the asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the books of account of the assessee; - (b) the total amount of depreciation on such provided in the books of account of the assessee in respect of such previous year or years preceding the previous year relevant to the assessment year under consideration shall be de .....

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ncome-Tax v. SLM Maneklal Industries Limited [1993 (6) TMI 51 - GUJARAT High Court] - Decided in favour of assessee. - TAX APPEAL NO. 1942 of 2006 - Dated:- 5-7-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR PRANAV G DESAI, ADVOCATE FOR THE OPPONENT : MR JP SHAH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this Appeal, the Appellant has challenged the judgment and order dated April 2006 of the Income Tax Appellate Tribunal, Rajkot in I.T.A. .....

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ertain assets were old and obsolete and the respondent had claimed depreciation in its books of accounts for the same? ii) Whether on facts and circumstances of the case the Income Tax Appellate Tribunal was right in holding that the depreciation should be allowed in block of assets on the original value even when certain assets had nil value or were written off in the books of accounts? iii) Whether roads and boundaries, railway sidings, jetty pire, bouys, mooring and navigation structure can b .....

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e (b) of clause (6) of section 43 provides that written down value in the case of assets acquired before the previous year means the actual cost to the assessee less all depreciation actually allowed to him under the Income-tax Act. 14.2 Some persons were exempt from tax and, therefore, not required to computer their income under the head profits and gain of business or profession . Upon withdrawal of exemption, such persons became liable to income-tax and hence were required to compute their in .....

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ons of the Income-tax Act. Hence, the depreciation provided in the books in the years when the income was exempt cannot be treated as the depreciation actually allowed . Accordingly, it was held that as the assessee was not required to compute profits and gains of business or profession under the Income-tax Act, mere passing of accounting entry made for depreciation in the books of accounts was not the depreciation actually allowed as there was no liability to tax and hence, no income-tax assess .....

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