9911796707
TMI Blog2009 (1) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... liver Inc. of U.S.A. under the agreement of 1st January, 1959 was not admissible as deduction in the computation of the assessee's total income? (2) Whether, on the facts and in the circumstances of the case the Tribunal ought to have held that the entire amount of Rs.19,21,847/- and Rs.7,22,526/-being the compensation and fees payable to Dorr-Oliver Inc. of U.S.A. was deductible in arriving at the assessee's total income ? (3) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the assessee is not entitled to the surtax liability being allowed as a deduction in the computation of its income? (4) Whether on the facts and in the circumstances of the case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these questions are as under:- As regards question nos.1 & 2 are concerned, Counsel appearing for the parties are agreeable that the questions have been answered by this Court in the case of M/s.Dorr Oliver India Ltd., Vs. CIT reported in 234 ITR 723 in respect of Assessment year 1975-76. In the circumstances, the aforesaid questions are answered in the negative and in favour of the revenue. 4. As far as question no.3 is concerned, Counsel for the parties are agreeable that the aforesaid question has been answered by this Court in the case of Lubrizol India Ltd., V/s. CIT reported in 187 ITR 25 and also by the judgment of the Supreme Court in the case of Smith Kline & French (I) Ltd., Vs. CIT reported in 219 ITR 581. In view of the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the assessee Dorr Oliver India Ltd., wanted to assign its business to Hindustan Dorr Oliver Ltd., as a going concern at the market value. Government of India however, by its letter dated 30.11.1974 addressed to the assessee, informed the assessee to get the valuation of the asset done and the transaction effected as per the book value. Ultimately the assignment was effected by an agreement dated 1.10.1976 w.e.f. 20.2.1977. It was the case of the assessee that on the date of the assignment, the written down value of the asset of the assessee company was Rs.21,52,932/-. Since the amount which could actually be realised as per the direction of Government of India was only the book value, the amount actually realised was only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT (Appeals). The department filed an application for reference and this question was thus referred. 10. We find from the record that this is a case where there was a specific stipulation of the Government of India to effect the transfer at book value. The transfer thus took place at the book value which was lesser than the market price of the said asset. The question is whether the loss suffered is one admissible to a deduction under section 32(1) iii. The relevant part of Section 32(1) (iii) of the Income Tax Act reads as under:- 32(1) In respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndit Laxmikant Jha's case and it will be incorrect to say that the Supreme Court judgment covers the issue as raised in the present case. The question before the Apex Court considered the assessment of profit under Section 10(2) (vi) 1972 (section 41(2) of the Income-tax Act 1961. The question of terminal allowance under section 31(iii) was not considered by the Apex Court as the case before it was one of sale effected at a price higher than the written down value. 12. Some arguments were made by the Counsel for revenue on the basis of sections 45 & 47 of the Income-tax Act. In our view, these sections are not attracted to the facts of the present case as there is no capital gain in the present case as the assessee has suffered a loss. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
