The assessee is\u00a0 a Pvt Ltd company filed the return of income , declaring nil income . The assessment was reopened on the ground that depreciation was wrongly allowed on the basis of revaluation by the firm . Under a scheme of succession estwhile partnership firm was succeeded in its business by assessee-company . \u00a0Before firm was converted into private limited company, partnership firm had revalued its intangible assets using standard valuation methods and same were transferred to assessee . In consideration, assessee allotted shares to partners of erstwhile partnership firm. n Assessee claimed depreciation on such intangible assets.\u00a0 Same was accepted and an same assessment order was passed.\u00a0 Thereafter, a reopening notice was issued against assessee on ground that original assets which were added in company at time of succession could not be considered for purposes of depreciation -accordingly, claim for depreciation on intangible assets was disallowed . The Appellate Tribunal has up held the\u00a0 reassessment and also affirmed the order of the Assessing Officer on\u00a0 merit\u00a0 On appeal allowing the claim of the assessee the Court held that\u00a0 the assessee and erstwhile partnership firm were different entities and there was transfer of intangible assets by partnership firm to assessee for a valuable consideration that was by way of allotment of shares . The \u00a0transaction between firm and assessee-company was covered under section 47(xiii) and, therefore, assessee was entitled to depreciation on actual cost incurred by it with reference to intangible assets . \u00a0(AY. 2005-06 to 2008-09)<\/p>\n","protected":false},"excerpt":{"rendered":"
S : 32: Depreciation \u2013 Intangible asset \u2013 Firm succeeded by Company \u2013 Revaluation of assets \u2013 Assessee is entitle to depreciation on actual cost incurred by it \u2013 5th proviso will apply only in the year of succession and not in subsequent years and also in respect of over all quantum of depreciation in the year of succession \u2013 Order of Appellate Tribunal was quashed [ S.32 (1)(ii), 47(xiii) ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-19788","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-59a","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=19788"}],"version-history":[{"count":3,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19788\/revisions"}],"predecessor-version":[{"id":24871,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/19788\/revisions\/24871"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=19788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=19788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=19788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}