TMI Blog1998 (6) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Appellate Tribunal was justified in law in not following the Madras High Court's decision in the case of Dasaprakash Bottling Co. v. CIT [1980] 122 ITR 9 which specifically held that it was open to the Income-tax Officer to grant depreciation even if the prescribed particulars were not furnished? 4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that in order to preserve and conform to all the priorities, the Department could not foist upon the assessee a claim declined by the assessee-company? 5. Whether, on the facts and in the circumstances of the case and having regard to the context in which the Board's Circular No. 29---D(XIX---14) of 1965 dated August 31, 1965, was issued, the Appellate Tribunal was right in holding that the said circular was applicable to the facts of the assessee's case and was binding on the Income-tax Officer? 6. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that depreciation was admissible on expenditure capitalised during the previous year relevant to the assessment year 1976-77? 7. Whether, on the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other items also, viz., depreciation on roads, depreciation on laboratory equipment at 15 per cent. and depreciation on capital expenditure, he accepted the contention raised on behalf of the assessee and directed the Income-tax Officer to grant reliefs as prayed for. The Revenue carried the matter in appeal before the Income-tax Appellate Tribunal. The Appellate Tribunal held that the revised return was a valid return within the meaning of section 139(5) of the Act and since the revised return did not contain particulars, the Income-tax Officer could not have granted the depreciation and no depreciation would be allowed. The Tribunal relied upon a circular of the Board No. 29D dated August 31, 1965, and held that the decision of this court in Dasaprakash Bottling Co.'s case [1980] 122 ITR 9, is distinguishable as in that case particulars were furnished but in the instant case, there were no particulars before the Income-tax Officer to grant depreciation. According to the Tribunal, the revised return was filed to substitute the original return, and the original return must be deemed to have been withdrawn. The Tribunal held that it is not open to the Income-tax Officer to look i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also held that it is open to the Income-tax Officer to grant "depreciation" even if the assessee had not furnished necessary particulars as the computation of income under the Act is the computation of the real or proper statutory income and this income could be arrived at only after allowing the deductions available under the law. The ratio of the decision in Dasaprakash Bottling Co.'s case [1980] 122 ITR 9 (Mad) would apply to the facts of the case and in view of the judgment of this court, we are bound to follow the said judgment. The Tribunal, in our view, has tried to distinguish the application of the decision in Dasaprakash Bottling Co.'s case [1980] 122 ITR 9 (Mad) on the ground that the particulars were available in Dasaprakash Bottling Co.'s case [1980] 122 ITR 9 (Mad), but the particulars were withdrawn in the instant case by the assessee. The ratio of the decision of this court is that the grant of depreciation is a statutory allowance, and even if the assessee had not furnished the particulars, it is open to the Income-tax Officer to grant the depreciation. So also, it would be perfectly open to the Income-tax Officer to disallow the claim, if the assessee had not fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Delhi Cloth and General Mills Co. Ltd. v. State of U. P. [1979] 118 ITR 277. The Supreme Court dealt with a case arising under the U. P. Agricultural Income-tax Act, 1948. That case dealt with the option regarding the method of computation and whether it is permissible for the assessee to change his option by filing a revised return. The decision of the Supreme Court, as rightly pointed out by the Tribunal, has no connection with the issue that arises in the reference before us. The contention of learned counsel for the assessee was that the assessee had withdrawn the original return by filing a revised return and the particulars filed along with the original return were also withdrawn by filing the revised return. Learned counsel for the assessee relied upon the decision of the Bombay High Court in CIT v. Shri Someshwar Sahakari Sakhar Karkhana Ltd. [1989] 177 ITR 443, the decisions of the Punjab and Haryana High Court in the case of Beco Engineering Co. Ltd. v. CIT [1984] 148 ITR 478 and CIT v. Friends Corporation [1989] 180 ITR 334, the decision of the Karnataka High Court in the case of CIT (Chief) (Admn.) v. Machine Tool Corporation of India Ltd. [1993] 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Officer to grant depreciation, even if the assessee had withdrawn the claim in the revised return. The circular of the Board relied upon by the Tribunal has no application to the facts of the case. In that circular, the Board has merely reiterated that if the particulars are not available, it would be open to the Income-tax Officer not to grant depreciation allowance. The reliance placed by the Tribunal on the said circular is misplaced. The attempt on the part of the Tribunal to distinguish the application of the decision of this court in Dasaprakash Bottling Co.'s case [1980] 122 ITR 9 on the facts of the case, in our opinion, is not warranted. As we have already seen, the apex court has held that the current depreciation is the first charge on the profits and under the scheme of the Act it is the duty of the Income-tax Officer to grant depreciation and without granting depreciation, it is not possible to arrive at the true and proper income of a particular assessment year and it will disturb the priorities in granting deduction of various statutory allowances. The option of the assessee in the matter of grant of depreciation after the particulars were available is ..... 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