TMI Blog2000 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... profit and loss account would not be violative of the provisions of the Companies Act, when the same were not in accordance with Parts II and III of Schedule IV to the Companies Act, 1956?" The controversy has arisen in view of the applicability of section 115J of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The assessee calculated the depreciation on the plant and machinery at 33.33 per cent. as permissible under the Income-tax Rules, 1962, as against 30 per cent. depreciation required to be calculated under Schedule XIV to the Companies Act, 1956. The comparative rates of depreciation on the factory building, plant and machinery, furniture, fitting and office equipment and vehicle are as under: "The rates of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to use. Hence, providing of depreciation for full year instead of pro-rata depreciation is justified as prescribed in the Income-tax Rules, 1962. The matter was discussed and the following resolution was passed. Resolved that the rates of depreciation be provided as per the Income-tax Rules, 1962, being marginally higher than the rates specified under Schedule XIV to the Companies Act, 1956. Further resolved that depreciation be charged in the books of account to determine the profits/loss at the rates provided in the Income-tax Rules, 1962, though slightly higher and be provided for full year irrespective of use in view of the use of highly corrosive chemicals and dyes." The Assessing Officer allowed depreciation on the basis claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue, has submitted that the assessee could not claim depreciation at a higher rate on the ground that it was permissible under the Income-tax Rules. It is submitted that by claiming such depreciation at the higher rate, the assessee has claimed excess depreciation to the tune of Rs.19,63,023. Mr. J.P. Shah, learned counsel for the assessee, has drawn our attention to the relevant record including the resolution passed by the board of directors whereby the assessee had claimed higher rate of depreciation at 33.33 per cent. as permissible under the Income-tax Rules as against 30 per cent. rate prescribed under the Companies Act. For this marginally higher rate, the assessee has given a justification that in view of the nature of use of pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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