Home › Income-Tax Act › PIK Studios P. Ltd. v Dy. CIT (2020)79 ITR 533 (Mum) (Trib)

PIK Studios P. Ltd. v Dy. CIT (2020)79 ITR 533 (Mum) (Trib)

S. 32 : Depreciation – Actual cost -Trade Mark — Revaluation — Depreciation to be claimed on cost incurred and not on revaluation figure —Total amount of depreciation cannot exceed depreciation to which assessee would be entitled if succession had not taken place [ S.43(1), Explanation 3, 47(xiii) ]

Tribunal held that where the firm is succeeded by a company falling under section 47(xiii) , the Act mandates that the aggregate deduction in respect of the asset shall not exceed in any previous year, the deduction calculated at the prescribed rates as if the succession had not taken place and such deduction shall be apportioned between the predecessor and the successor in the ratio of the number of days for which the assets were used by them.

Tribunal also held that the rate and amount of depreciation which was applicable for the predecessor would be the amount of depreciation allowable on the item.  ( AY.1999-2000 to 2006-07, 2008-09 to 2012-13)