| Case ID |
2d3d80fa-fa67-46d1-8d8f-46f301b5ba7f |
| Body |
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| Case Number |
IT REFERENCE No. 121 OF 1976 |
| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal correctly determined that the actual cost of the two cranes to the assessee was Rs. 93,779, adhering to the provisions of section 43(1) of the Income-tax Act, 1961. This decision was based on the written down value of the assets in the hands of the donor and the market value at the time of acquisition, taking the lesser of the two. The Tribunal found that the original cost to the donor was Rs. 2,06,667 while the market value estimated by the valuer was inflated due to the assumption of free marketability. Therefore, the Tribunal reversed the decision of the AAC, restoring the ITO's assessment, which allowed depreciation and development rebate based on the actual cost determined. |
| Summary |
This case revolves around the assessment of actual cost for two cranes gifted to Simon Carves India Ltd. by its parent company, under the provisions of the Income-tax Act, 1961. The crux of the case lies in the determination of the actual cost of these assets, which was contested between the Income Tax Officer (ITO) and the Appellate Assistant Commissioner (AAC). The ITO determined the actual cost based on the CIF value plus expenses incurred, while the AAC argued for the original cost to the donor as the actual cost. Ultimately, the Tribunal upheld the ITO's assessment, emphasizing the importance of adhering to the statutory provisions concerning the determination of actual costs, particularly in cases involving gifted assets. The decision highlighted the significance of accurate asset valuation in tax assessments, with implications for depreciation and tax rebates. This case is pertinent for tax professionals and entities dealing with asset valuations under Indian tax law, particularly in relation to gifts and inherited assets. |
| Court |
Calcutta High Court
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| Entities Involved |
Not available
|
| Judges |
Sabyasachi Mukharji J
|
| Lawyers |
K. Roy,
R.N. Dutt,
A. Sengupta,
P. Majumdar
|
| Petitioners |
Simon Carves India Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1983 SLD 909,
(1983) 141 ITR 712
|
| Other Citations |
CIT v. Smt. Ashima Sinha [1979] 116 ITR 26 (Cal.),
CIT v. S.P. Jain [1973] 87 ITR 370 (SC),
CIT v. Kanan Devan Hills Produce Co. Ltd. [1979] 119 ITR 431 (Cal.),
CIT v. Panchanan Das [1979] 116 ITR 272 (Cal.),
CIT v. Rajasthan Mines Ltd. [1970] 78 ITR 45 (SC),
CIT v. Saraspur Mills [1959] 36 ITR 580 (Bom.),
CIT v. Sri Rama Vilas Service (P.) Ltd. [1960] 38 ITR 25 (Mad.),
Karnani Properties Ltd. v. CIT [1971] 82 ITR 547 (SC),
Star Co. Ltd. v. CIT [1970] 75 ITR 179 (SC),
Sudesh Chandra Talwar v. CWT [1982] 137 ITR 483 (Cal.)
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| Laws Involved |
Income-tax Act, 1961
|
| Sections |
43(1)
|