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TMI Blog2013 (10) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... unning it on hire for tourists; or (ii) outside India in his business or profession in another country ;" 3. As per the said proviso, no deduction towards depreciation can be allowed in respect of a motor car manufactured outside India where such car was acquired by the assessee after 28th February, 1975 but before 1st April, 2001. We need not refer to exceptions carved out by the proviso because they are not applicable. It is also clear from the clause itself that an imported motor car acquired by the assessee before 1st March, 1975 and on or after 1st April, 2001 is entitled to depreciation. The dates being the criteria, the word "acquisition" by the assessee, is the core or the cornerstone of the provision. 4. The accepted and admitted factual position is that the respondent is a public limited company engaged in the business of manufacturing and trading of readymade garments, accessories and made-ups. Under a scheme of arrangement and merger sanctioned by the Delhi High Court under Section 394 of the Companies Act, 1956 by order dated 5th October, 2004, proprietary concerns of the directors, M/s Vama Industries, Vikramaditya Exports and Meera Overseas had merged with the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains of business or profession". The heading may not and cannot control the main provision but it is apparent that sub-section (1) to Section 43 deals with the definition of term "actual cost" and sub-section (6) to Section 43 defines the term "written down value". None of these provisions really seek to define the expression "acquired", which is the expression specifically used in the proviso to Section 32, which we have to interpret. Section 32 relates to and stipulates conditions necessary for claiming depreciation. The conditions stipulated should be satisfied. The expression "written down value" or "actual cost" are relevant for computing the quantum or value of the capital cost or written down value on which depreciation is to be computed, but cannot without any express stipulation or implied construction, be read as a disabling provision, controlling or restricting the expression „acquired‟ in the proviso to Section 32. Computation provision is no doubt relevant and apropos, albeit can curtail the words in the main provision when the computation provision negates or affirms one interpretation, viz. another interpretation. If the computation provision makes one pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected by the construction of a particular computation provision. But the question here is whether it is possible to apply the computation provision at all if a certain interpretation is pressed on the charging provision. That pertains to the fundamental integrality of the statutory scheme provided for each head." In the present case, the computation provisions do not negate, or require a different or specific meaning should be given to the word 'acquire'. 9. On the other hand, Explanation 7 refers to acquisition of an asset under the scheme of amalgamation. This indicates that the Legislature has treated amalgamation as transfer and, therefore, had specifically thought it appropriate to provide how actual cost of the capital asset should be computed. Similarly, under sub-section (6) to Section 43 by defining the expression "written down value" reference is made to the written down value in the block of assets of the amalgamating company transferred to the amalgamated company. The said provision also uses the term "transferee company and transferor company" clearly indicating that in cases of amalgamation there is transfer of assets. Thus, we do not agree with the findings recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise or arrangement proposed for the purposes of amalgamation or in connection therewith, shall not be sanctioned unless the court has received a report from the Company Law Board or the Registrar that the affairs of the company have not been conducted in a manner prejudicial to the interest of its members or to public interest; and secondly, that the order of resolution of transfer of the company shall not be made unless official liquidator on scrutiny of the books and papers of the company makes a report to the court that the affairs of the company had not been conducted in a manner prejudicial to the interest of its members or to public interest." 11. Similar view was taken earlier in the case of Singer India Limited versus Chander Mohan Chadha, (2004) 7 SCC 1 wherein the following extract from Halsbury's Laws of England (4th Edn., Vol. 7)paragraph 1539 was quoted:- "Amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company becoming substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et may be by way of sale for a price i.e. money, in exchange, or by way of several other modes including gift or inheritance. Merger and acquisition can be modes of acquisition of an asset. 15. In terms of the order passed under Section 394 of the Companies Act, 1956, the respondent company acquired the imported motor cars. The cars were not acquired and the respondent assessee was not owner of the motor cars prior to the said date. On merger of the three concerns with the respondent assessee, shares were issued as consideration to the proprietors of the business concerns. The shares issued were consideration for the transfer of the assets. It is immaterial, according to us, whether there was transfer of an undertaking, including the block of assets, which also included the imported motor cars. 16. It is clear that the respondent assessee had acquired the asset i.e. imported cars after the cut off date i.e. 1st April, 2001 and, therefore, is entitled to depreciation and the bar/prohibition in clause (a) to proviso to Section 32(1) would not apply. The tribunal has rightly decided the issue in favour of the respondent assessee and against the Revenue. There is no merit in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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