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TMI Blog2023 (6) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2008-09 for the period from 01/09/2007 to 31/03/2008. If succession had not taken place during assessment year 2008-09 and the predecessor, i.e., the partnership firm would have claimed Rs. 1 crore as depreciation, both predecessor and successor for that year could claim together only Rs. 1 crore as depreciation and nothing more. Admittedly, this is what happened in the case at hand also. Appeal pertains to AY 2009-10 in which year the asset is clearly owned by successor, i.e., assessee. The assessee as per Section 32 r/w Rule 5 of the Act quoted above, will be entitled to claim depreciation in respect of any assets on the actual cost of the said assets. The actual cost of the said assets will be the actual cost which the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciating the fact that depreciation claimed by the assessee was in respect of revalued assets where the depreciation claim is @ 80%? V. Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in not appreciating the fact that there was a contravention of provisions of Sec. 47(xiii) of the Income Tax Act, 1961 at the time of conversion of firm to a company ? 2. Respondent, i.e., assessee is engaged in the business of manufacturing of diamonds and power energy. Return of Income Tax was filed on 30/09/2009 declaring total loss of Rs. 16,28,78,976/- which was processed under Section 143(1) of the Income Tax Act, 1961 (the Act) and MAT was determined under Section 115JB of the Act at 10% of the book profit at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 04/03/2014, dismissed the Appeal. This order was impugned by assessee before the Income Tax Appellate Tribunal (ITAT), and ITAT allowed the Appeal by an order dated 21/06/2017. It is this order of ITAT which is impugned in this Appeal. 6. In our view, ITAT has come to the correct conclusion. Section 32(1) of the Act reads as under :- Depreciation 32.(1) In respect of depreciation of -- (i) buildings, machinery, plant or furniture, being tangible assets; ... owned, wholly or partly by the assessee and used for the purpose of the business or profession, the following deductions shall be allowed-] .. ...Provided also that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed the actual cost of the said asset . . 7. Therefore, as per proviso to Section 32, aggregate deduction in respect of depreciation on tangible assets or intangible assets allowable to the predecessor and the successor in the case of succession, i.e., to the partnership firm and to the assessee, respectively, shall not exceed in any previous year, the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor. This was applicable only to the assessment year 2008-09 when the succession took place as for later years, it would not be the case as the assets would no longer be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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