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TMI Blog2008 (12) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... pective effect? (2) Whether the ITAT was right in law and on facts in reversing the order of the CIT(A) deleting the disallowance of Rs.26,60,22,204/- out of depreciation claimed? 2. The Assessment Year is A.Y.2003-2004, the relevant accounting period being Financial Year ended on 31st March, 2003. It is an accepted fact that respondent-assessee was constituted under National Dairy Development Board Act, 1987, with effect from 12.10.1987. Section 44 of the Income Tax Act, 1961 ( the Act), as it stood upto 31.3.2003, reads as under: 44. Notwithstanding anything contained in the Income-tax Act, 1961 or any other enactment for the time being in force relating to tax on income, profits or gains, the National Dairy Development Board shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the order of Commissioner (Appeals) to submit that the Tribunal had failed to appreciate that the Assessing Officer was within his right in exercise of powers under Section 145(3) of the Act and thus bring to tax the amount which was escaping tax net. It was submitted that as the assessee was not liable to be taxed upto 31.3.2002, the Resolutions of the Board of the assessee changing the system of accounting even for the period between 1.4.2001 to 31.3.2002 would indicate that the change had been undertaken only for the purposes of not paying tax on the interest received during the year under consideration. The learned advocate therefore urged that the issue was required to be considered and appeal be admitted on the substantial questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax by virtue of Section 44 of the Act, as it then stood. 6. In light of the aforesaid findings recorded by the Tribunal, it is apparent that the Tribunal has recorded findings of fact after appreciating the evidence on record. Whether a change in the method of accounting is bona fide or not has to be examined in light of the facts and evidence on record and the Tribunal has applied the correct principles laid down by this Court to the facts found. The Tribunal is justified in holding that the action of respondent-assessee in changing the method of accounting with effect from 1.4.2001 cannot be read to mean that the act was mala fide because for the said period, admittedly, the assessee was not liable to tax. The contention of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Sections 10A and 10B of the Act, the depreciation had to be worked out at a notional basis. The Commissioner (Appeals) also upheld the order made by the Assessing Officer by holding that for the period since inception in 1987 upto 31.3.2002, the original cost of assets had to be reduced by the amount of actual wear and tear of the assets and literal meaning of the words actually allowed cannot be granted. 8. Learned advocate for the appellant has assailed the impugned order of Tribunal wherein the Tribunal has held that the written down value of the assets has to be taken at their original cost and not as reduced by the notional depreciation deemed to have been allowed in earlier years when the assessee was not chargeable to tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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