I had sent this query last week. But perhaps all were busy with tax audit and hence I did not receive any reply. Hence I am posting the same question. Please Help out.
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depreciation
Dear Raveendranath Sir,
1) Transfer of Individual Business into Partnership amounts to Transfer simply because it is nowhere excluded...(No benefit is available u/s 47 as in case of conversion of individual business into Company)
2) Proportional Depreciation is allowed in ur case as per 5th Provisio to Clause (ii) of Sec 32(1) read with Sec 170.
3) Yes it is necessary that asset should exist on the last day of the Previous year (there r few exceptions as mentioned in 2 point)
As per Law AO is justified in Invoking 154 & treating as Capital Gain..I think u should look for other things like-
1) whether notice u/s 154 has been served in time or not..(within 4 years from the end of year in which assessment was made.)
2) Interesting thing would be Sale Price of this tranfer, see If u can challenge his sale price..
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