EID PARRY (INDIA) LIMITED Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The assessee is on appeal as against the order of the Income Tax Appellate Tribunal in respect of the assessment year 1994-95 and 1995-96. The following are the substantial questions of law raised in the Tax Case Appeal filed by the assessee T.C.(A) No.1311 of 2005:

(2.) The following substantial questions of law are raised in T.C.(A) No.1312 of 2005:

(3.) The Tribunal passed a common order in the assessee's appeal and in the Revenue's appeal. The present appeal in T.C.(A) No.1311 of 2005 is in respect of the orders passed in the assessee's appeal, regarding the written down value to be arrived at the hands of the amalgamated company, the assessee herein. It is seen from the facts herein that M/s.Falcon Gulf Ceramics Limited was amalgamated with the assessee company with effect from 1.4.1993. In arriving at the written down value of the assets at the hands of the amalgamated company, namely, the assessee herein, the Assessing Authority noted that the assessee had made the written down value based on the decision of the Bombay High Court reported in (Commissioner of Income-tax Vs Hindustan Petroleum Corporation Ltd., 1991 187 ITR 1). The assessee contended that as per Section 43(6) Explanation 2(b), the written down value of the assets at the hands of the amalgamated company would be the written down value of the assets at the hands of the amalgamating company. In other words, the written down value at the hands of the amalgamated company would be the written down value as arrived at by the actual cost of the assets as reduced by the depreciation actually allowed to the amalgamating company. Placing emphasis on the provisions of Section 43(6) Explanation 2(b), the assessee submitted that as held in the decision of the Bombay High Court referred to above, Explanation 3 to Section 43(6) has no relevance in the matter of arriving at the written down value of the assets and the assessee had properly computed the value of the assets taken over from the amalgamating company by adding the unabsorbed depreciation to the written down value of the assets. The assessee contended that Section 72A has no relevance to the case.