TaxTMI 
TaxTMI 
1972 (7) TMI 1
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....Rs. 6 lakhs and was allocated as follows : " (a) the value of the machinery plants stores including stock of goods grains coals at the pithead and other movable properties appertaining to the said colliery the property in which is capable of passing by delivery being Rs. 3,50,000 (b) the value of the buildings and structures belonging to the said colliery being Rs. 1,50,000 (c) the value of the rest of the properties appertaining to the said colliery not capable of being passed by delivery being Rs. 1,00,000" Soon after the assessee-company came into existence it took over the business from the vendor-company and claimed depreciation for the assessment year 1946-47 on the basis of the figures, the comparative statement of which is given in the statement of the case. This statement contains the written down value as per the assessment record, of the vendor-company, the valuation of the assets as per the balance-sheet of the vendor company and the valuation by the assessee-company as per the balance-sheet as on December 30, 1945. The Income-tax Officer allowed depreciation on the basis of those figures. This state of affairs continued till the assessment year 1952-53 when the....
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....e considered by him. He also examined S. N. Mullick under section 37 of the Indian Income-tax Act, 1922, hereinafter called the "Act". He came to the conclusion that the vendor had been making good profits but no provision had been made for the good will of the company in the business and if such a provision had been made it would have worked out at Rs. 2,56,960 having regard to the profits made for the preceding four years. He made an allocation of Rs. 6 lakhs as follows : Rs. " (1) Goodwill 2,56,960 (2) Mines and development as per balance-sheet of M/s. Guzdar Kajora Colliery Co. Ltd. as at 30-6-45 2,48,323 (3) Stores and stock 60,744 and worked out the value of other depreciable assets at Rs........... 33,973" Before the Appellate Tribunal the remand report of the Income-tax Officer was assailed on behalf of the assessee on various grounds. The Tribunal observed that when the assessment for the years 1946-47 and 1947-48 were made the assessee chose to give the valuation in its balance sheet on a certain basis which was accepted and no appeal was taken to the higher authorities and although the rule of estoppel could not be applied but "acquiscence of the ....
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....the Tribunal has agreed with those findings of facts and we do not think that we can interfere with those findings." The answer to the question referred was given in the affirmative. Learned counsel for the assessee has assailed the decision of the High Court on a number of grounds. It has been urged, inter alia, that the High Court had not kept in view the general and well-established principle that the statement with regard to valuation contained in a formal document should be, prima facie, accepted as correct. There can be no justification, it has been pointed out, for any court or Tribunal "to rip up a transaction not impeached as dishonest and not proved to be such, merely because the company may have paid an extravagant price for their property". A great deal of emphasis has been laid an behalf of the assessee on the report submitted by the experts justifying the evaluation given in the deed of conveyance. In the absence of fraud, collusion, inflation or false transaction made with an ulterior purpose the income-tax authorities, it is said, were precluded from going behind the agreement of purchase in determining the purchase price fixing their own valuation. The other po....
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....ctual cost to the assessee of the asset with regard to which depreciation allowance is claimed has to be ascertained for the purpose, inter alia, of finding out the written down value in case of assets other than ocean going ships. For the purpose of getting the benefit of clause (c) of the proviso to sub-section (2)(vi) also the original cost has to be ascertained. The Privy Council laid down in Commissioner of Income-tax v. Buckingham Carnatic Co. Ltd. that the word "assessee" in section 10(2)(vi) of the Act refers to the person who owns the assets and who is being assessed and depreciation allowance has to be based on the original cost of such property to such person. This principle was laid down in a case where the assessee had acquired the business of another assessee and it was emphasised that the original cost to be considered was the original cost to the person who was being actually assessed and not the original cost of those assets to the previous owner of the business. Reference was made to the above decision of the Privy Council in the judgment of this court in Jogta Coal Co. Ltd. v. Commissioner of Income-tax and it was observed : " We do not think that there is any ....