Itxa/2261/2010 Of The Commissioner Of Income Tax - 7 Mumbai v. Nicholas Piramal India Ltd

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2261 OF 2010 The Commissioner of Income Tax-7, Mumbai ..Appellant. V/s. M/s. Nicholas Piramal India Ltd. ..Respondent. Ms. Suchitra Kamble for the appellant. Mr. J.D. Mistri, senior Advocate with A.K. Jasani for the respondent. CORAM : J.P. DEVADHAR AND A.A.SAYED, JJ. DATED : 27TH JULY, 2011 P.C. :- 1.The question raised in this appeal is, whether the assessee is entitled to depreciation on the assets taken over from Sumitra Pharmaceuticals & Chemicals Ltd. at the written down value as reflected in the books of Sumitra Pharmaceuticals & Chemicals Ltd. or at the market value at which the assessee had purchased the said unit. 2.The assessment year involved is 1996-97. In the assessment year in question, the assessee had purchased bulk drug unit of Sumitra Pharmaceuticals & Chemicals Ltd. as per the scheme of arrangement approved by the High Court of Judicature of Andhra Pradesh as also by the High Court of Bombay. Admittedly, even after the Bulk Drug Unit was taken over by the assessee, Sumitra Pharmaceuticals & Chemicals Ltd. continued to carry on business. In such a case, taking over the Bulk Drug Unit under the approved scheme of arrangement could not be treated as amalgamation and consequently, Explanation 2 to Section 43(6) of the Act would not be applicable. In these circumstances, the decision of the ITAT in holding that the market value and not the written down value has to be taken for the purposes of depreciation cannot be faulted. 4.In the result, we see no merit in the appeal and the same is dismissed with no order as to costs. (A.A. SAYED, J.) (J.P. DEVADHAR, J.)