2012 (8) TMI 1184 - AT - Income Tax

Summary

Issues involved: Appeal against order allowing assessee's appeal in violation of section 47 of the Act regarding transfer of assets to subsidiary company.

Summary:
1. The department filed an appeal against the order of ld CIT(A) for assessment year 2007-08, challenging the allowance of assessee's appeal u/s 47 of the Act related to the transfer of assets to a subsidiary company.
2. The assessee acquired assets from Tata Motors Limited (TML) during the financial year 2006-07 and claimed depreciation based on the Written Down Value (WDV) in TML's books. Subsequently, TML transferred shares of the assessee to another company, leading to a change in the treatment of the transferred assets. The AO disagreed with the revised claim of the assessee, leading to an appeal.
3. Ld CIT(A) allowed the depreciation based on the actual price paid by the assessee to TML, citing a similar decision by ITAT Mumbai in another case. The department appealed against this decision.
4. During the hearing, the ld D.R. supported the AO's order, while the ld A.R. defended the order of ld CIT(A) citing relevant provisions of the IT Act.
5. The Tribunal agreed with ld A.R., referencing a previous case involving Essar Oil Ltd, where it was established that the cost of acquisition for depreciation should be based on the actual price paid by the assessee. The Tribunal upheld the order of ld CIT(A) based on this precedent.
6. The Tribunal noted that the issue was already settled by the ITAT and confirmed by the Hon'ble High Court, finding no fault in the order of ld CIT(A) and dismissing the department's appeal.