9911796707
TMI Blog2016 (5) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... judication for the sake of convenience. 2. The assessee M/s. H.V.Axles is engaged in the Manufacturing of automobile and auto parts. The assessment of the assessee was completed by the order dated 15.12.2010 for A.Y.2007-08 and 31.12.2010 for A.Y.2008-09. The assessee challenged the disallowance u/s. 14 of the Income Tax Act, 1961(in short "the Act") before the Commissioner of Income Tax (Appeals)-4, Mumbai [hereinafter referred to as the "CIT(A)"] which was confirmed therefore the assessee has filed the present appeal before us. ITA NO. 6199/Mum/2011 & 8469/Mum/2011 3. We have heard the arguments advanced by the learned representative of the parties and perused the record. Learned representative of the assessee has argued that no adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. Dy. CIT [2010] 194 taxman 203 decided by the Hon'ble Bombay High Court. Both the orders nowhere speaks about the expenses incurred to earn the exempt income specifically. The balance sheet of both the years are on the file as annexure -1 and 2 which speaks that the assessee was having sufficient surplus amount in comparison to the investment made in mutual fund to earn the exempt income. Therefore, the said circumstances and in view of the above mentioned law settled in [2009] 313 ITR 340 (Bom) in the case of Bombay Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. We are of the view that the claim of the assessee is required to be examined a fresh in accordance with law. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transferred capital asset to the transferee company shall be taken to be the same as it would have been if the transferor company had continued to hold the capital assets for the purpose of its subsidiary." Where a 100 per cent holding company of a subsidiary company transfer certain assets to such subsidiary company even for a price or consideration higher than the WDV, the capital gains on such transfer has been exempted under section 47(iv). The reason being the identity of the ownership of the companies precluded its being considered as involving any gain to the transferor company. As capital gain was exempt in the hands of the transferor company and in order to ensure that the transferee company does not claim depreciation on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings but he rejected the same on the ground that the subsequent events will not have e any material change with respect to changing of cost of acquisition of the capital assets acquired from the holding company. But, in our opinion, the Assessing Officer should have considered the subsequent events. The application of the provisions of section 47 is not final but is subject to the occurrence of events under section 47A. if the events mentioned in section 47A occur, the exemptions granted under section 47 of the Incometax Act are withdrawn. What is the effect of such withdrawals? In the case of the transferor company, the income is to be treated as the income of the year in which the transfer has taken place. This shows that the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding which the exemption granted under section 47(iv) has been withdrawn under section 47A of the Act, it shall be the cost for which such asset was acquired by it. Thus, in the present case, the cost for which the assessee has acquired the asset should be the cost of acquisition for the purpose of computation of deprecation." The decision in the case of Essar Oil Ltd. as above squarely covered the case of the assessee. Therefore, the A.O. is directed to take the cost of acquisition of such assets as have been acquired by it from M/s. Tata Motors Ltd. at the cost at which they have been acquired means the actual consideration paid by the assessee company and accordingly allow the depreciation claimed by the assessee. In result, the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
