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TMI Blog2016 (1) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... sentatives of both sides agreed that facts of 2005-06 may be considered as the facts in issues are identical for A.Y. 2006-07 also though quantum may defer. 3. The assessee company is in the business of manufacturing of chemicals and bulk drug. Return for the year was filed on 29.10.,2005 declaring loss of Rs. 1,30,85,355/-. The return was selected for scrutiny assessment. During the course of the assessment proceedings, the Assessing Officer came to know that M/s. Suyash Chemicals, a partnership firm was succeeded in its business by the assessee company on 31.3.2004 by which all the assets and liabilities of the partnership firm were transferred to the assessee company. 3.1. The AO further noticed that erstwhile partnership firm had reva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed to the acquirer on the cost that is paid by the acquirer. The AO was of the opinion that in the present case no cost has been paid to the firm by the assessee company and only the shares have been issued to the partners in the erstwhile firm in their profit sharing ratio. 3.4. Another reason given by the AO is that the partnership firm has revalued two intangible assets in financial year 2003-04 which are "trade name" and "Technical Know-how" which assets were not in existence in the books of the firm. These assets were created is only for the purpose of claiming higher depreciation. Heavily relying upon Explanation-1 to Sec. 43(6) of the Act, the AO disallowed the claim of depreciation. 4. Aggrieved by this, the assessee carried th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip firm registered under the provisions of Indian Partnership Act 1932 have been assigned to the assessee company. It is also an undisputed fact that the assessment of the firm M/s. Suyush Chemicals was made u/s. 143(3) of the Act and vide order dated 29.11.2006, the AO has accepted the transaction between the firm and the assessee company u/s. 47(xiii) of the Act. It is also an undisputed fact that the firm has revalued its assets in the financial year 2003-04 pertaining to assessment year 2004-05 whereas the impugned assessment years before us are A.Y. 2005-06 & 2006-07. We failed to understand how the objections raised by the AO re relevant in the case of the assessee when the transaction has been accepted in the hands of the erstwhile p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once there is a report by the registered valuer it is encumbent upon the authority to dislodge the same by bringing adequate material on record in the form of a departmental valuation report, because in the absence of the same a technical expert's opinion (registered valuer's report) cannot be dislodged by any authority by merely ignoring the same. In the present case that is what has happened. Neither the Assessing Officer the Tribunal have even attempted to state that the valuation report and the values put on the assets are incorrect in any manner whatsoever. They have simply ignored the valuation report. The assessee having made a claim for depreciation on enhanced cost, which is the actual cost in its hands, it was necessary for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm, or any transfer of a capital asset to a company in the course of demutualisation or corporatisation of a recognised stock exchange in India as a result of which an association of persons or body of individuals is succeeded by such company. Provided that (a) all the assets and liabilities of the firm 6or of the association of persons or body of individuals relating to the business immediately before the succession become the assets and liabilities of the company ; (b) all the partners of the firm immediately before the succession become the shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of succession ; (c) the partners of the firm do not receive any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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