TMI Blog2008 (3) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned JM agreed that it is covered in favour of the assessee by the judgment of the Hon'ble Delhi High Court in the case of CIT v. Bansal Credits Ltd. [ 2002 (11) TMI 76 - DELHI HIGH COURT] where it was held that where an assessee has leased out the commercial vehicles and the lessee has put them to use in the business of hiring them out, higher depreciation of 40 per cent is allowable to the assessee. Nevertheless, the matter was restored to the CIT(A) with the directions mentioned above. Order Ld AM - The learned AM however held that the question whether the assessee can make a claim by means of a letter filed in the course of the assessment proceedings without filing a revised return was not decided by the CIT(A) because the AO had himself taken a decision on the claim on merits and the CIT(A) was therefore not bound to address the question of validity of the assessee's claim. He, therefore, disagreed with the learned JM on this point. On merits, he found that the order of the CIT(A} for the AY 1996-97 on which the CIT(A) had relied had been set aside on further appeal to the Tribunal and the matter has been restored to the AO to verify the actual user of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter filed by the assessee in the course of the assessment proceedings. The CIT(A) therefore committed no error in dealing with the assessee's appeal on merits. Moreover, the AO himself has examined the claim on merits though he earlier held that the claim was not entertainable and the letter was non est. A decision having been given by him on merits it was open to the CIT(A) to deal with the merits. I, therefore, agree with the learned AM that the CIT(A) was not precluded from dealing with the assessee's claim for higher depreciation on merits. Coming to the merits of the assessee's claim, the learned AM has observed that for the AY 1996-97, the Tribunal has restored the matter to the AO for verification of the assessee's claim in the light of the judgment of the Hon'ble Delhi High Court in Bansal Credits. I agree with the course adopted by the learned AM. In the result, I agree with the order passed by the learned AM. The matter will now be placed before the regular Bench for passing appropriate orders. - R. V. Easwar Vice President, B. R. Jain A.M. And Smt. Diva Singh J.M. For the Revenue : Ram Bilash Meena , L. M. Pandey For the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is allowable @ 40 per cent per annum. The claim of total depreciation under s. 32 is now revised to Rs. 13,43,748 as against Rs. 10,28,368.68 claimed in the original return. 5. Referring to s. 139(5) of the IT Act, it was pointed out that the claim of the assessee was turned down by the AO observing as under : Since, revision of return in the instant case is not in accordance with the provisions of s. 139(5) in view of the facts that the assessee company filed its claim for revision of return vide letter No. 23rd Oct., 1996 (received in this office on 30th Oct., 1996) which is beyond the time limit, the same cannot be entertained and the same is treated as non est. 6. It was further pointed out by him that at p. 3, the AO discussed the claim of the assessee in the following terms and discussed the issue as under : The assessee company is engaged in providing finance to various persons as well as to various dealers of M/s Hero Honda Motor Cycles. During the year under consideration the assessee company has shown lease rental amounting to Rs. 8,41,207 and finance charges earned amounting to Rs. 90,05,338. The details with regard to the lease rental earned and major ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal, that the Supreme Court in CIT vs. Mahendra Mills (2000) 159 CTR (SC) 381 : (2000) 243 ITR 56 (SC) held that if, in the revised return filed by the assessee, the assessee had withdrawn the claim for depreciation made in the original return, then the assessment based on the revised return without considering the claim for depreciation would be a proper assessment, as the privilege of claiming depreciation could not be converted into a disadvantage and the option could not become an obligation. Though after that judgment Expln. 5 was inserted in s. 32(1) of the IT Act, 1961, declaring that 'for the removal of doubts' the provisions of sub-s. (1) would apply whether or not the assessee had claimed depreciation, the Explanation could not be regarded as taking away the effect of the judgment of the Supreme Court for years prior to the date of coming into force of the Explanation, as the law declared by the Supreme Court could not be regarded as having merely raised doubts. The newly added Expln. 5 took effect only on and from 1st April, 2002, and would not be applicable for prior years. 8. Reliance was also placed upon CIT vs. Mahendra Mills O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edits Ltd. (supra) had been followed. Page 13 of the paper book contains the details of additions to trucks stated to be leased to transporters in the year under consideration and pp. 14 to 33 is the vehicle lease agreement appended by way of an illustration entered into between the assessee and Arvind Road Carriers. Pages 34 to 39 is the copy of registration certificates of the trucks allegedly leased out and pp. 40 to 41 is the copy of the balance sheet and pre-operative expenses schedule for the year ending 31st March, 1994 in the case of Arvind Road Carriers (P) Ltd. etc. It is seen that as per the certificate appended by the assessee that it is stated as under : This is to certify that all the documents in the paper book have been drawn from the records of the lower authorities and no new evidence is being adduced at this stage. 11. However, as to which document was specifically before the AO or the CIT(A) in the present proceedings, it is seen has not been clarified. Accordingly, in the circumstances, it seen that whereas the claim of the assessee was rejected by the AO for specific reasons without presumably actually examining the documents available on record, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dt. 23rd Oct., 1996 in the course of assessment proceedings the assessee made a revised claim at the rate of 40 per cent per annum. The ITO was, therefore, obliged to entertain it and consider it on merits. The Hon'ble Bombay High Court Nagpur Bench in the case of CIT vs. Prabhu Steel Industries (P) Ltd. (1988) 171 ITR 530 (Bom) has taken such a view as is evident from the last para of the order. You may therefore reconsider. Sd/- (B.R. Jain) AM 22nd March, 2004 Received the above note with date mentioned as 22nd March, 2004 in the late afternoon of 23rd March, 2004. Learned AM may take corrective action. Sd/- (Diva Singh) JM 23rd March, 2004 May proceed on the basis of receipt of this note. Sd/- (B.R. Jain) AM 23rd March, 2004 2. With respect to the points for consideration in the proposed order in the case of Jt. CIT vs. Hero Honda Finlease Ltd., I would like to state that the proposed order has been made in the light of the submissions made before the Bench at the time of hearing. The peculiar facts and circumstances as well as the order of the tax authorities have been fully considered. Considering which and taking note of the point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the file of the CIT(A) for addressing the specific objections of the AO and for a verification of facts by way of a speaking order. 6. The above paras shall form part of the original proposed order. B.R. JAIN, A.M. : 12th Jan., 2005 My learned colleague had sent order running into 1 to 13 paras. The Revenue has also taken a ground that the claim of the assessee for higher depreciation was made beyond the period stipulated under s. 139(5) of the Act and the learned CIT(A) ought to have considered this fact before allowing higher depreciation to the assessee. My learned colleague since did not address on this issue in specific and restored the matter back to the learned CIT(A) to address on the specific reason taken by the AO, an internal note on 22nd March, 2004 was sent to her. However, she has written a further order running into six paras, stating the same to be part of the original proposed order. In my view, after writing the initial order, she had become functus officio, therefore, without going into the subsequent order, I consider it my bounden duty to answer the question raised by Revenue in their appeal before us and accordingly proceed to deal the same her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls Ltd. vs. CIT (1973) 90 ITR 236, 240 (All). In that view of the matter, the correction of claim could not have been treated as a revised return filed beyond period prescribed under s. 139(5) of the Act. The claim of the assessee was therefore justified and maintainable. It is also the bounden duty of the AO to consider and allow the correct statutory deduction/ allowance to the assessee while making the assessment of his income. The circular of the CBDT as reproduced by the apex Court in the judgment in the case of CIT vs. Mahendra Mills (2000) 159 CTR (SC) 381 : (2000) 243 ITR 56, 62 (SC) reads as under : The circular of the Central Board of Revenue [No. 14 (SL-35) of 1955, dt. 11th April, 1955], required the officers of the Department 'to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs ...Although, therefore, the responsibility for claiming refunds and reliefs rests with the assessees on whom it is imposed by law, officers should'(a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other. 4. The AO thus was duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the light of the said judgment of jurisdictional High Court though the issue has been restored to learned CIT(A) in place of AO, it will not make material difference. For that matter, I concur with her view for deciding the issue in the light of aforesaid decision rendered in the case of Bansal Credits Ltd. (supra). 6. Accordingly, Revenue's appeal stands partly allowed for statistical purposes only. REFERENCE UNDER S. 255(4) OF THE IT ACT, 1961 B.R. JAIN, A.M. : January, 2005 Since, there is difference of opinion between the Members the following question is referred to the Hon'ble President of the Tribunal for deciding the same as contemplated in s. 255(4) of the Act : Under the facts and findings whether there is any justification to restore the matter to learned CIT(A) for addressing on maintainability of claim of higher depreciation with reference to provisions of s. 139(5) of the Act or that the Tribunal is bound to answer the question when it is raised before it and the decision taken thereon is justified ? SMT. DIVA SINGH, J.M. July, 2007 Whether a finding of fact can be given in a dissent order where the specific issue, rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the claim and found that in the asst. yr. 1996-97, his predecessor had accepted the assessee's claim for higher depreciation @ 40 per cent on the trucks by order dt. 29th Nov., 1999. He accordingly upheld the assessee's claim for depreciation @ 40 per cent on the trucks. 3. The Revenue carried the matter in appeal before the Tribunal. The learned JM who wrote the leading order held that since the CIT(A) did not specifically address the question as to whether the higher claim of depreciation could be validly made by a letter, the matter has to be restored to his file with a direction to specifically address this question and pass a speaking order in accordance with law after giving sufficient opportunity to the assessee. So far as the merits are concerned the learned JM agreed that it is covered in favour of the assessee by the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Bansal Credits Ltd. Ors. (2003) 179 CTR (Del) 23 : (2003) 259 ITR 69 (Del) where it was held that where an assessee has leased out the commercial vehicles and the lessee has put them to use in the business of hiring them out, higher depreciation of 40 per cent is allowable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee can make a claim for deduction, which has not been claimed in the return, only by filing a revised return within the time allowed. In the same decision, it was made clear that the power of the Tribunal to admit an additional ground under s. 254 is not affected by its decision. It was however clarified that the case was concerned with only the power of the assessing authority and not the appellate authority. Under s. 250(5), the CIT(A) has the power to allow the appellant to go into any ground of appeal not specified in the grounds of appeal if he satisfied that the omission of the ground from the form of appeal was not wilful and unreasonable. Dealing with such a power, the Bombay High Court in CIT vs. Prabhu Steel Industries (P) Ltd. (1988) 171 ITR 530 (Bom), held that where a claim for special deduction was made by the assessee not in his return but in the course of the assessment proceedings and the ITO failed to consider the same, it was open to the AAC to entertain the claim. In CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC), it was held by the Supreme Court that the powers of the CIT(A) sitting in appeal over an assessment were plenary and conterminous with thos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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