Explanation 2 to Sec 43(6)

I have a doubt regarding Explanation 2 to Sec 43(6) which says -

Explanation 2.—Where in any previous year, any block of assets is transferred,—

  (a) by a holding company to its subsidiary company or by a subsidiary company to its holding company and the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied; or

  (b) by the amalgamating company to the amalgamated company in a scheme of amalgamation, and the amalgamated company is an Indian company,

then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the transferee-company or the amalgamated company, as the case may be, shall be the written down value of the block of assets as in the case of the transferor-company or the amalgamating company for the immediately preceding previous year as reduced by the amount of depreciation actually allowed in relation to the said preceding previous year.

Can anyone please explain what would be the cost to be taken in the hands of the amalgamated company if, say, WDV for amalgamating company is Rs. 40 Lacs.?