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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 ..... the circumstances of the case and in law, the Tribunal erred in not appreciating the fact that the conversation of firm to a company was an internal arrangement for evasion of Tax ? III. Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in holding that the assessee was eligible to claim depreciation as per the revaluation carried out and the report of the Government Approved Valuer? IV. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in not appreciating 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007 to 31/03/2008 on revalued figure. According to the assessing Officer, Petitioner had claimed excess depreciation and disallowed the depreciation as claimed on the revalued cost. The assessee's claim of depreciation was recalculated at Rs. 12,92,66,889/- in place of Rs. 35,21,38,615/-. The total income was determined under normal provisions at Rs. 5,64,14,373/- and book profit under Section 115JB was worked out at Rs. 13,56,43,461/-. 5. The assessee impugned this order before the Commissioner of Income-tax (Appeals), who by an order dated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays for which the assets were used by them. ......" Section 43(1) defines actual cost which reads as under:- "In sections 28 to 41 and in this section, unless the context otherwise requires- (1) "actual cost" means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority: .........." Rule 5 of Income Tax Rules, 1962 which deals with depreciation also states "........ provided that the aggregate depreciation allowed in respect of any asset for different assessment years shall not exceed the actual cost of the said asset ..........". 7. Therefore, as per proviso to Section 32, aggregate deduction in respect of deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 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 assessee paid to the predecessor after revaluing the assets and certainly in our view assessee will be entitled to claim depreciation for the subsequent years on the basis of the actual cost paid. 9. Mr. Suresh Kumar submitted that for the actual cost no money was paid but shares were issued in lieu of cash. Certainly that will be the cost which assessee has paid to procure the assets. This is the reason given by ITAT in the impugned order and we are in agreement with the view expressed by ITAT. 10. In the circumstances, in our view no sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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