As per Indian Income tax act 1961 Question 7: Discuss the following issues in the computation of income from business for the assessment year 2024-25 A company wants to claim depreciation on technical know-how acquired in August, 2023 for the manufacture of a new product for its business at a lump sum cost of 12 lakh. A company was a lessee of an old building under an agreement with the lessor. It demolished the old building and built a new building on the same site at a cost of 10 lakh and was permitted to reoccupy the new building for a further period of 20 years at the old rent. It claimed the expenditure of 10 lakh as revenue expenditure. 1. 2. 3. 4. The accounts of X & Co. were rejected by the Assessing Officer, who estimated the income applying the gross profit rate as in the earlier year, not allowing any specific expenditure. Further, he made an addition of 40,000 under section 40A(3) for certain cash payments effected in respect of purchases. Discuss the validity of the action of the Assessing Officer. X Ltd. was amalgamated with Y Ltd. with effect from August 29, 2023. The written down value of its block of assets as on April 1, 2023, the rate of depreciation on each block and the values at which the block of assets were transferred by X Ltd. to Y Ltd. are given below: Block of Asset Buildings Plant & hich they relate has been machinery Furniture Rate of Depreciation 10% 15% Written down value in the hands of X Co. Ltd. as on April 1, 2023 10,00,000 25,00,000 Transfer value to Y Co. Ltd. 9,00,000 24,00,000 10% 5,00,000 4,50,000 You are required to work out the deductions admissible under section 32 by way of depreciation to X Ltd. and to Y Ltd. in respect of these assets for the financial year 2023-24 relevant to the assessment year 2024-25. It may be noted that amalgamation is in terms of section 2(1B) of the Income-tax Act. [MAY 1999]