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TMI Blog2016 (6) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... iation claimed by the appellant by applying the provisions of explanation-3 below Section 43(1). 3. Additional ground filed by the assessee vide application dated 17.06.2014 is not pressed, hence dismissed. 4. Brief facts are - the assessee-company came into existence w.e.f 1-4- 2000 by conversion and transfer of assets of a firm on book value under the provisions Chapter-IX of the Companies Act. The partners of the company were issued shares at the book value of the assets as on 31.03.2000. According to assessee, the WDV of firm's assets as on 31.03.2000 has been adopted as cost in the hands of the new company at the same value as on 1- 4-2000. However, company auditors found that computer and peripherals were wrongly debited to machiner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that acquisition by the assessee was by process of law and there was no intention of avoidance of tax. The department has also not pointed out any avoidance of tax except stating that it was resulting to higher claim of depreciation particularly on account of higher value of certain assets adopted in the depreciation chart. It is submitted that there was no intention of such tax avoidance particularly when the assets were acquired at book value. It is, therefore, claimed that Explanation 3 is not applicable in its case. However, on consideration of the facts I find that there was no reason for adopting the higher opening WDV in respect of certain assets only on the ground that the same value adopted on conversion of firm into com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r malafide. (ii) There is no finding that the assessee while making the increased claim of depreciation any type of overvaluation of assets with a motive to reduce the tax liability. In the absence of such finding, Section 43(1), Explanation-3, is not at all applicable. Reliance is placed on following decisions of ITAT & High Court:- (a) The decision of Third Member, Ahmedabad Bench in the case of Chitra Publicity Company Pvt Ltd, [2010] 4 ITR (T) 738 (Ahmedabad Tribunal) (b) The decision of Hon'ble High Court of Gujarat in the case of Ashwin Vanaspati Industries, 255 ITR 26 (Guj.) (iii) It is pointed out that the Assessing Officer also miscarried himself in holding that there is no transfer of assets from firm to company, inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which no adverse remark has been made by authorities below. 7.1 Alternatively also, the Hon'ble Supreme Court in a recent judgment in the case of CIT vs. Excel Industries Ltd, reported in (2013) 358 ITR 295 (SC), has held that the preponement or postponement of year of claim or allowance is a basically revenue neutral in character, more so when the rate of income tax in case of company is nearly same. The re-classification of asset at the most makes a benign shift in the claim of depreciation of machinery block and computer block. Depreciation being a carried over allowance based on WDV; rate of tax being same, following the Hon'ble Supreme Court judgment, is a revenue neutral exercise. So, in any case, the assessee cannot be blamed for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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