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The Tax Publishers DCIT v. CNCS Facility Solutions [ITA Nos. 3720 & 3721/Mum/2013, dt. 4-4-2016] : 2016 TaxPub(DT) 2146 (Mum-Trib) Revaluation of assets before conversion of firm to company, claim of depreciation on intangible assets *Facts:* Assessee firm was converted into a company holding zero transfer under section 47(xiii). Prior to conversion all assets including intangible assets at their fair values with valuation report. Subsequently the company claimed depreciation on the intangible assets. This was negated by the assessing officer on the premise that they were self-generated assets and such revaluation was done with intent to claim depreciation in the hands of the company thus disallowed the depreciation claim in the hands of the company. On appeal Commissioner (Appeals) allowed the same. On further appeal by the department: Held in favour of the assessee that they were entitled to the depreciation claim on the intangible assets which were valued and brought into the company. Explanation 1 to section 43(6) cannot be read here in the instance. The decision Mumbai ITAT in M/s. Suyash Laboratories Ltd. in ITA Nos. 4003 & 4004/Mum/2012, dtd. 14-10-2015 squarely fits into the assessees case.

The Tax Publishers

DCIT v. CNCS Facility Solutions [ITA Nos. 3720 & 3721/Mum/2013, dt. 4-4-2016] : 2016 TaxPub(DT) 2146 (Mum-Trib)

Revaluation of assets before conversion of firm to company, claim of depreciation on intangible assets

Facts:

Assessee firm was converted into a company holding zero transfer under section 47(xiii). Prior to conversion all assets including intangible assets at their fair values with valuation report. Subsequently the company claimed depreciation on the intangible assets. This was negated by the assessing officer on the premise that they were self-generated assets and such revaluation was done with intent to claim depreciation in the hands of the company thus disallowed the depreciation claim in the hands of the company. On appeal Commissioner (Appeals) allowed the same. On further appeal by the department:

Held in favour of the assessee that they were entitled to the depreciation claim on the intangible assets which were valued and brought into the company. Explanation 1 to section 43(6) cannot be read here in the instance. The decision Mumbai ITAT in M/s. Suyash Laboratories Ltd. in ITA Nos. 4003 & 4004/Mum/2012, dtd. 14-10-2015 squarely fits into the assessees case.