TMI Blog1986 (3) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... 961, (hereinafter referred to as "the Act"). In the course of original assessment proceedings, the assessee had claimed depreciation at 100% on pans, condensers, etc., under the amended Income-tax Rules which came into force with effect from April 1, 1970. In reassessment proceedings, the Income-tax Officer did not accept the assessee's claim for 100% deduction on the ground that depreciation at 100% was admissible only for new salt pans, etc., on replacement and riot for old pans. According to the Income-tax Officer, so far as old pans, etc., were concerned, the expenditure incurred for repairs or replacements thereof was admissible as revenue expenditure prior to April 1, 1970. The assessee, however, did not claim expenditure for repairs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as the assessee's claim for depreciation at 100% of the written down value in respect of salt pans, etc., was concerned, the Tribunal held that the assessee was entitled to claim 100% depreciation on the written down value of the salt pans, etc.. In the result, it allowed the claim of the assessee and set aside the orders in this regard passed by the Appellate Assistant Commissioner and Income-tax Officer. The Revenue being aggrieved by the decision of the Tribunal, the following question has been referred to us at its instance by the Tribunal under section 256(1) of the Act: "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the Income-tax Officer was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the note below the entry relating to salt pans makes it clear that repairs to similar works made of earth will be allowed as revenue expenditure. Therefore, submitted Mr. Shelat, if the salt pans, etc., in respect of which the assessee is now claiming depreciation at 100%, were made of earth and clay as urged by the assessee, it could not have claimed any depreciation in the past. It could have claimed expenditure incurred for repairs of salt pans made of earth as revenue expenditure. It could have claimed depreciation at the rate of 6% only if salt pans, etc., were made or constructed of masonry, concrete, cement, asphalt or similar materials. It must, therefore, be assumed or inferred that salt pans, etc., in respect of which deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials like cement, concrete, etc. We find ourselves unable to accept this submission. As observed above, it is very clear from the order of the Income-tax Officer that he refused to allow the assessee's claim for 100% depreciation solely on the ground that salt pans, etc., were not new. This is made further clear from the following observations made by the Income-tax Officer in his order : "The written down value on which depreciation was claimed and computed pertains to old pans for which expenditure was admissible as revenue expenditure prior to April 1, 1970. The assessee did not claim the expenditure as revenue expenditure in the past, but decided to capitalise the same and claimed depreciation at 6%. The written down value arriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified. In the result, the question referred to us at the instance of the revenue must be answered in the affirmative and against the Revenue. In the view which we are taking, it is not necessary to answer the question referred to us at the instance of the assessee. The assessee succeeds on merits and, therefore, it would be academic to decide whether the Tribunal was right in holding that the assessment was rightly reopened under section 147(b) of the Act. We, therefore, decline to answer question No. 2 referred to us at the instance of the assessee on the ground that it is academic to do so. Reference answered accordingly with no order as to costs. A copy of this judgment should be sent under the seal of this court and under the si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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