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TMI Blog1984 (2) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Income-tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as "the Tribunal "), in eight cross-appeals, four by the Revenue (namely, I.T.A. Nos. 323 to 326) and four by the assessee (namely, I.T.A. Nos. 336 to 339) of 1974-75. The Revenue withdrew three of its appeals, namely, I.T.A. Nos. 323 to 325 relating to the assessment years 1968-69 to 1970-71, respectively. The fourth appeal of the Revenue (namely, I.T.A. No. 326) for the assessment year 1971-72 was accepted. All the four appeals filed by the assessee were dismissed. The assessee filed five reference applications, four from the appeals filed by it, namely (R.A. No. 143 to 145 and 142 of 1976-77), and the fifth (namely, R.A. No. 146 of 1976-77) from the appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxpayer to claim or not to claim depreciation depending upon his convenience must be rejected. Similarly, it also rejected the assessee's contention regarding extra shift allowance. Consequently, the following question has been referred in R.A. Nos. 143 to 145 and 142 of 1966-67 by the Tribunal. " Whether the Tribunal has been right in law in holding that, on the facts of the case, the Income-tax Officer had no option but to compute and allow depreciation and extra shift allowance to the assessee for the four assessment years?" In order to determine the question, it will be relevant to refer to ss. 32(1)(ii) and 34(l) of the I.T. Act. Section 32(1)(ii), inter alia, provides that in respect of depreciation of buildings, machinery, pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1965, has provided that where the required particulars have not been furnished by the assessee and no claim for depreciation has been made in the return, the ITO should estimate the income without allowing depreciation allowance. From the circular, it is evident that in case the assessee has not claimed depreciation allowance, he cannot be granted the same by the ITO. It has been settled by the Supreme Court in Navnit Lal C. Javeri v. K. K. Sen, AAC [1965] 56 ITR 198, that the circulars issued by the Department would be binding on it. From the language of the section, read with the circular, it is clear that in case an assessee has not claimed depreciation, the ITO cannot give the allowance of depreciation to him. The learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the prohibition contained in s. 80A(2). It was further held that even assuming that the assessee was entitled to s. 80J relief on the given set of facts, it could not escape the adjustment of liability of Rs. 82,107 from the total employed capital of Rs. 85,14,635. One of the assessee's contentions was that r. 19A was in conflict with s. 80J and, therefore, it should be ignored. The Tribunal rejected the contention that the provisions of r. 19A came in conflict with s. 80J. It also rejected the assessee's contention that for the purposes of computation of relief under s. 80J, the liabilities of Rs. 82,107 should not have been adjusted. On an application of the assessee, the following question of law was referred : " Whether, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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