ASSISTANT COMMISSIONER OF INCOME CIRCLE 5(1)(2), MUMBIA vs. DHARMANANDAN DIAMONDS PRIVATE LIMITED, MUMBAI

The only common issue in these four appeals of Revenue is as regards to the order of CIT(A) allowing the claim of depreciation on enhanced value of assets i.e. the Written Down Value (WDV) of the asset as against the disallowance made by the Assessing Officer by invoking the provisions of Section 43(b)(c) of the Act and explanation 3 to section 43(1) of the Act. For this Revenue has raised identically worded grounds and facts and circumstances of the case are also exactly identical. Hence, we will the facts and grounds from Assessment Year 2012-13 in . The Grounds read as under:-

“On the facts and circumstances of the case and in law, the ld. CIT(A) erred in deleting the depreciation claimed whereas the same is not allowable as per the provisions of section 43(6)(c)(ii) and explanation 3 to section 43(1) of the Income-tax Act, 1961? On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the depreciation claimed of ₹2,78,82,751/- whereas the same is not allowable as per the provisions of section 43(6)(c)(ii) and explanation 3 to section 43(1) of the Income-tax Act, 1961?.” Dharmanandan Diamonds P Ltd.; AY 12-13 to 15-16 3. At the outset, the learned Counsel for the assessee stated that the issue is fully covered by Tribunal’s decision in assessee’s own case for Assessment Year 2009-10 in ITA No.3861/Mum/2014 for Assessment Year 2009-10 vide order dated 21.06.2017 which was consequently followed in Assessment Year 2010-11 in ITA No. 623/Mum/2019 for Assessment Year 2010-11 vide order dated 16.03.2020, wherein the Tribunal has allowed the claim of assessee vide Para 6 to 6.2 as under: - “6. We have heard the rival submissions and perused the relevant materials on record. As mentioned earlier the learned CIT(A) has followed the order of his predecessor-in- office for AY 2009-10 and dismissed the appeal. Aggrieved by the order of the learned CIT(A) for AY 2009-10, the assessee filed an appeal before the Tribunal. The only ground of appeal was against the “confirmation of disallowance of depreciation to the tune of Rs.22,28,71,726/- by upholding the order of the AO allowing depreciation of Rs.12,92,66,889/- as against claimed by the assessee- company at Rs.35,21,38,615/- including additional depreciation of Rs.35,81,977/- by holding that the assessee is entitled to claim depreciation at WDV of the erstwhile firm and not at the cost at which the assets were acquired by the assessee-company upon succession, even when all the conditions as envisaged in section 47(xiii) of the Act were satisfied.