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TMI Blog2008 (9) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the case, and in law, the appellant submits that the arbitrary allocation of interest is erroneous and that exemption be allowed under s. 10(33) as claimed. (3) The learned CIT(A) erred in confirming the action of the AO in disallowing a sum of Rs. 1,16,125 being the amortization of premium paid for leasehold land. (4) The learned CIT(A) erred in ignoring the provisions of Expln. 2B to s. 43(6) of the Act and holding that the block of assets transferred to the appellant company in a scheme of demerger with Godrej Foods Ltd., were to be considered at their tax WDVs, for the purpose of computing depreciation allowable under s. 32 of the Act. Having regard to the facts of the case and the provisions of law, the appellant submits that the AO be directed to accept the WDV of such assets as appearing in the books of account and to recompute the depreciation accordingly. (5) Without prejudice to the foregoing ground, the learned CIT(A) erred in adjudicating an issue which was not before him. (6) The appellant submits that the AO be directed to carry forward/set off unabsorbed depreciation and brought forward business loss of Godrej Foods Ltd., apportioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.3 Ground No. 3 is in respect of amortization of premium of Rs. 1,16,125 paid on leasehold land. This issue is decided against the assessee, in view of the earlier decision of the Tribunal for asst. yrs. 2000-01 and 2001-02 cited supra. Accordingly ground No. 3 of the assessee fails. 3.4 Ground No. 5 is rejected as not pressed. 3.5 Ground No. 6 taken by the assessee, in our considered opinion, does not arise in this appeal. The assessee wants this Bench to issue certain directions to the AO, which would be consequential, if the claims of the assessee are allowed. The AO, would anyhow consider the legal consequence of the order of the Tribunal or any higher authority having allowed assessee's claims and consequentially deal with other aspects of the matter. But at this stage, the Bench does not deem it necessary to comment on the same. Ground No. 6 is rejected. 3.6 Ground No. 7 with regard to computation of deduction under s. 80HHC stands covered in favour of the assessee and against the Revenue by the decision of "E" Bench of the Tribunal in the case of Asstt. CIT vs. Ajanta Pharma Ltd. (2008) 2 DTR (Mumbai] 241 : (2008) 118 TTJ (Mumbai] 611 : (2008) 21 SOT 101 (Mumbai). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2B to s. 43(6) were changed to the wordings, "WDV of the transferred assets as appearing in the books of account". As a resuit, Expln. 2B to s. 43(6) in the asst. yr. 2001-02, stood as follows: "2B. Wherein a previous year, any asset forming part of a block of assets is transferred by a demerged company to the resulting company, then, notwithstanding anything contained in cl. (1), the WDV of the block of assets in the case of the resulting company shall be the WDV of the assets as appearing in the books of account of the demerged company immediately before the demerger." Further, by Finance Act, 2003, w.e.f. 1st April, 2004, the words "as appearing in the books of account" were omitted from the statute. Thus, Expln. 2B to s. 43(6) for the asst. yr. 2004-05 reads as below: "2B. Where in a previous year, any asset forming part of a block of assets is transferred by a demerged company to the resulting company, then, notwithstanding anything contained in d. (1), the WDV of the block of assets in the case of the resulting company shall be the WDV of the assets of the demerged company immediately before the demerger." With this, we now move to examine the other relevant sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original return of income, with detailed notes in support thereof. The assessee was requested to explain the revised claim of depreciation. In response thereto, the assessee vide letter dt. 31st Jan., 2005, has made detailed submissions as to why the depreciation claim was revised. It was explained that the consumer products business of the assessee company was demerged into a separate company, viz., Godrej Consumer Products Ltd. (the resulting company) w.e.f. 1st April, 2001, as per the scheme of arrangement approved by the Hon'ble High Court at Mumbai on 14th March, 2001. Pursuant thereto, the block of assets of the assessee company for computation of depreciation was reduced by the WDV of the assets transferred to the resulting company, as appearing in the books of account and depreciation was computed accordingly. Based on Expln. 2A to s. 43(6) of the IT Act, it is the assessee's contention that it is required to reduce from its block of assets, the tax WDV of assets transferred to the resulting company. Accordingly, in the revised return of income, the assessee has revised the depreciation claim under s. 32 of the Act after reducing the tax WDV of assets transferred to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck of assets of the assessee company at their book values. Depreciation is being allowed on such transferred assets at their book values in the hands of Godrej Consumer Products Ltd. Similarly, the assets transferred to the assessee company from Godrej Foods Ltd. In the scheme of demerger have also to be considered at their book values. In its original return of income, the assessee company had reduced the WDV as per the books of account in respect of the assets transferred to Godrej Consumer Products Ltd. In the revised return, depreciation was recomputed after reducing the tax WDV of assets transferred to the resulting company from its block of assets. This is not in accordance with the provisions of the Act and the intention of the legislature. Thus, the revised claim of depreciation of the assessee company by reducing the tax WDV in respect of the assets transferred to Godrej Consumer Products Ltd. is rejected. In view of the above discussion, the depreciation allowable as per the Act is Rs. 19,17,20,396, which is as per Annexure attached." 6. After hearing rival contentions we find that for the current assessment year i.e., 2002-03, the applicable wordings in Expln. 2B are " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxman 62 (SC)(Mag). 10. In the result, this ground of the assessee is dismissed. ITA No. 4197/Mum/2006-Asst. yr. 2003-04 11. This appeal is against the order of the CIT(A)-X, Mumbai, and relates to the asst. yr. 2003-04. In this appeal, the assessee has raised the following grounds: "(1) The learned CIT(A) erred in holding that interest expenditure was not allowable under s. 36(1)(iii) of the Act. (2) The learned CIT(A) erred in holding that interest expenditure was attributable to the earning of dividend income. Having regard to the facts and circumstances of the case, and in law, the appellant submits that the arbitrary allocation of interest is erroneous and the same be quashed. (3) The learned CIT(A) erred in confirming the action of the AO in disallowing a sum of Rs. 1,16,125 being the amortization of premium paid for leasehold land. (4) The learned CIT(A) erred in holding that the opening WDV of the block of assets was to be adopted as per the appellate order for the immediately preceding assessment year for computing depreciation allowable under s. 32 of the Act. Having regard to the facts of the case and the provisions of law, the appellant submits that t ..... 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