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1985 (3) TMI 14

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..... opinion of this court by the Appellate Tribunal : " Whether, on the facts and in the circumstances of the case, the cost to the assessee for the purpose of computing profit assessable under section 41(2) of the Income-tax Act, 1961, is the cost at which it was valued in the partition deed and without taking into account the proportionate initial depreciation granted in the hands of the larger H .....

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..... schedule. This consisted of land together with buildings and laboratory buildings in which certain plant and machinery had been erected. In the partition deed, the plant and machinery had been valued at Rs. 8,70,826 which is the written down value of the assets in the incometax records of the larger Hindu undivided family. Subsequent to the said partition, the plant and machinery which had been al .....

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..... er Hindu undivided family headed by Balasubramanian who is the assessee in this case, in proportion to the value of the machinery allotted to the family. This was objected to by the assessee. However, the Income-tax Officer rejected the assessee's contention and proceeded to withdraw the proportionate initial depreciation of Rs. 53,526 in the hands of the assessee under section 41(2) of the Act. A .....

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..... the order of the Income-tax Officer withdrawing the proportionate initial depreciation granted in the hands of the bigger Hindu undivided family by invoking section 41(2) cannot legally be sustained. As has been held by the Tribunal, first of all, there is also no identity between the person who got the benefit of initial depreciation and the person who actually sold the plant and machinery. Furt .....

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