Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (2) TMI 377

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e has to exercise option before the due date for furnishing return of income. If option is exercised after furnishing of return of income under sub-section (1) of Section 139, it is of no avail. Form ITR-6 gives methodology on which deprecation can be claimed. Statue did not provide for any other method to exercise option except through filing of return. To read something more into second proviso to Rule 5(1A), that an option should be exercised separately would make returns filed meaningless. Thus if assessee exercised option in terms of second proviso to Rule 5(1A) at time of furnishing of return of income, it will suffice and no separate letter or request or intimation with regard to of exercise of option is required. Further option once .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed deprecation of =19,59,919/- and return of income was processed u/s.143(1) of the Act. The Assessing Officer found that the assessee has claimed depreciation on windmill at 80% on WDV method in the return of income as against @7.69% on straight line method and issued notices u/s.148 and also 143 (2) of the Act and posted the case for hearing. In the re-assessment proceeding, the ld. Authorised Representative for assessee appeared from time to time and filed details of deprecation claimed at 80% on windmills u/s. provisions of Sec. 32 of the Act instead of SLM rate at 7.69% as per Act and submitted that the company has erected wind mills during the year 2008-09 and claimed deprecation as per the applicable rates. The Return of income was f .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... appeals before the Commissioner of Income Tax (Appeals). 4. In the appellate proceedings, the assessee has raised grounds and also challenged validity of reopening of assessment u/s.147 of the Act. The ld. Authorised Representative has reiterated his submissions made before the Assessing Officer and also relied on the decision of Co-ordinate Bench of the Tribunal in the case of M/s. KKSK Leather Processors Pvt. Ltd where it was considered that when the return of income was filed within the due date. The income tax return itself is a sufficient declaration for exercising the option to claim depreciation under written down value method. Further, it was pleaded that depreciation on windmills was allowed by Assessing Officer at 7.69% on str .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... d prayed for dismissal of the appeals. 7. We heard the rival submissions of both the parties, perused the material on record and also judicial decisions cited. The ld. Authorised Representative argued on methodology of claim of deprecation as per the provisions of the Act. The only issue for consideration before the lower authorities was in respect of allowing the depreciation on windmills @80% on written down value method instead of straight line method. We have perused the law on provisions of Sec.32(1)(i) of Income Tax Act read with Rule 5(1A) of Income Tax Rules, 1962 read as under:- The allowance under clause (i) of sub-section (1) of Section 32 of the Act in respect of deprecation of assets acquired on or after 1st day of Ap .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 1A) of the Income Tax Rules before the due date u/s.139(1) of the Act whereas for the assessment year 2010- 2011 and 2011-2012, the assessee claimed deprecation at 80% on written down value method instead of straight line method at 7.69%. As per the provision of the Act, where any option exercised shall be final and shall apply to subsequent/assessment years. Since the assessee company claimed depreciation on straight line method for the assessment year 2009-2010 and cannot have different methodology of deprecation for the subsequent years. We rely on the jurisdictional High Court decision in the case of CIT vs. Kikani Exports P. Ltd 369 ITR 0500 where it was held that All the second proviso to Rule 5(1A) states is that the assessee has .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates