9911796707
|
Home
Issues:
Claim for additional depreciation based on Supreme Court decision regarding valuation of property for partition in a family business. Analysis: The High Court of Madhya Pradesh addressed a reference made by the Income-tax Appellate Tribunal regarding the assessment year 1961-62. The case involved Jaora Sugar Mills (P.) Ltd., a private limited company, claiming additional depreciation of Rs. 1,58,444 based on the historical context of the property's ownership. The property was initially owned by a Hindu Undivided Family (HUF) of Kalooram Govindram, which later sold it to the present assessee. The dispute arose from a partition suit in 1942, resulting in the sale of the sugar factory to Jaora Sugar Mills. The essence of the claim was that the value of the property for partition purposes, as determined by the Supreme Court in a related case, should be the basis for calculating depreciation. The primary issue revolved around whether the assessee was entitled to further depreciation on the enhanced value of the assets following the Supreme Court's decision on the valuation of the property for partition. The assessee argued that the written-down value of the assets should be based on the value determined in the income-tax proceedings, as specified in the sale agreement. The contention was that the value for depreciation purposes should reflect the Supreme Court's ruling that the value of the share must be ascertained after deducting depreciation from the original cost price. The High Court found in favor of the assessee, holding that the claim for additional depreciation was valid in light of the Supreme Court's decision. The Court emphasized that the assessment was not yet completed when the claim was raised, and the agreement clearly stipulated that the written-down value would be determined based on the ultimate decision in the income-tax proceedings. The Court criticized the AAC and the Tribunal for rejecting the claim, stating that the assessee was indeed entitled to depreciation as per the Supreme Court's ruling. In conclusion, the High Court answered the first question in the affirmative, affirming the assessee's entitlement to further depreciation based on the Supreme Court decision. The second question was answered in the negative, indicating that the Tribunal's decision to disallow further depreciation was incorrect. The Court directed the parties to bear their own costs in the matter.
|
