Law:

Section:

Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records - Assessment year 1962-63 - By an agreement, a foreign company agreed to transfer all its assets and liabilities to respondent-assessee company - Assessee company agreed to meet all liabilities of transferor company - For assessment year in question assessee claimed depreciation on basis of written down value of fixed assets as determined in previous year by transferor company - Auditors of respondent also furnished an amended statement of depreciation and development rebate on basis of actual cost of fixed assets of respondent, namely value of assets as shown in books of transferor company on date of sale - ITO accepted claim of respondent and completed assessment - For subsequent three assessment years claim of assessee was also accepted - Subsequently, ITO issued notice under section 154 on ground that there was mistake in calculation of allowances of depreciation - Whether on facts, it could be said there was a mistake apparent from records so as to justify issue of impugned notice - Held, no FACTS Company V had been incorporated abroad. By an agreement dated 30-11-1961, V agreed to transfer all its properties, factories, plants, machinery and other movable and immovable assets to the respondent, an Indian company. The transferee-company undertook to meet all the liabilities of the transferor-company, incurred on account of its Indian business including a loan due by the transferor-company. For the assessment year 1962-63, the respondent company filed its return of income claiming depreciation on the basis of the written down value of the fixed assets as determined in the previous assessment of the transferor-company. By a letter dated 3-12-1962, the respondent's auditors furnished an amended statement of depreciation and development rebate, on the basis of the actual cost of the fixed assets of the respondent, namely, the value of these assets as shown in the books of the transferor-company on the date of the sale. The ITO, in making the assessment, accepted the respondent's contention after taking into consideration the terms of the agreement for sale and transfer,…

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