2015 (1) TMI 704 - HC - Income Tax

Deduction u/s. 80HHC and 80IA - Tribunal allowed the deduction on gross total income inclusive of income from other sources - Held that - The Appellate Tribunal is right in law and on facts in allowing the deduction u/s. 80HHC and 80IA on gross total income inclusive of income from other sources. - Decided in favour of assessee. Depreciation allowance - Whether no claim for depreciation has been made in the return the Income-Tax Officer should estimate the income without allowing depreciation allowance? - Held that - As far as newly added question is concerned there also we hold that the the Appellate Tribunal is right in law and on facts in holding that depreciation not claimed for by the assessee cannot be allowed as a deduction despite the introduction of the concept of block assets. Decided in favour of assessee.

Summary

Issues:
1. Challenge to the judgment allowing deduction u/s. 80HHC and 80IA on gross total income inclusive of income from other sources.
2. Consideration of whether depreciation not claimed by the assessee can be allowed as a deduction despite the introduction of the concept of block assets.

Issue 1: Challenge to deduction u/s. 80HHC and 80IA:
The Revenue challenged the judgment allowing deduction u/s. 80HHC and 80IA on gross total income inclusive of income from other sources. The CIT(A) held the deduction as allowable, leading to the question of whether the Tribunal was correct in law and on facts in allowing such deductions. The Court referred to a previous case and upheld the Tribunal's decision based on the Supreme Court's ruling. The Court dismissed the appeal, stating that no substantial question of law arose, and the Tribunal's decision was justified.

Issue 2: Depreciation deduction and block assets:
A new question arose regarding whether depreciation not claimed by the assessee could be allowed as a deduction despite the concept of block assets. The Court considered the arguments presented by both counsels. The Revenue's counsel relied on previous decisions, while the respondent's counsel based their submission on a Supreme Court ruling. The Court analyzed the findings of the CIT(A) and the Tribunal, concluding that the deduction of depreciation not claimed by the assessee cannot be allowed, even with the introduction of block assets. The Court held in favor of the assessee, stating that the Tribunal was correct in law and on facts in disallowing the depreciation deduction. Consequently, the Court dismissed the Tax Appeal.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal precedents, and the final decision rendered by the Court.