TMI Blog2009 (10) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. JUDGMENT VALMIKI J. MEHTA, J. - This common order will dispose of the two ITAs 333/2008 338/2008. At the time of admission, following two questions of law were framed and which we answer by means of this judgment:- " 1. Whether ITAT was correct in law in allowing depreciation to the assessee on WDV on germplasm as on 31.03.2001 when the Department had challenged the said WDV computed by ITAT in assessment year 2001-2002? 2. Whether the cost incurred by the assessee much before becoming an "assessee" can still be treated as actual cost to the assessee in complete disregard to the peculiar circumstances of the case?" 2. The issue therefore pertains to the claim for depreciation on germplasm seeds which is a plant. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een shown as agricultural income and no depreciation had been claimed. The A.O. was not satisfied with the claim. He asked the assessee to submit a depreciation chart on the basis of written down value (WDV) after making notional allowance for depreciation in earlier years. The assessee did not file any such chart and rather insisted that the depreciation be allowed on the actual cost. In the absence of details, the A.O. disallowed the entire claim of depreciation for the assessment year 2001-02. For assessment year 2002-03, the depreciation allowed by him was on the basis of WDV as per the assessment order for assessment year 2001-02. The basic issue raised in these appeals is as to what should be the WDV of the germplasm seeds for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT Vs. Straw Products Ltd. (1966) 60 ITR 156, CIT Vs. Dharampur Leather Co. Ltd. (1966) 60 ITR 165, CIT Vs. Nand Lal Bhandari Mills (1966) 60 ITR 173. The relevant portions of the Supreme Court judgment in Straw Products Ltd. case reads as under:- "The Appellate Assistant Commissioner, disagreeing with the Income-tax Officer, held on appeal that the assessee had not been allowed excess depreciation allowance as per the original assessment and there was no basis for initiating proceedings under section 34. He was of the view that the expression "actually allowed" could not imply depreciation allowed by a mental phenomenon. The Appellate Tribunal upheld the order of the Appellate Assistant Commissioner and directed the computati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are not actually allowed then the Central Government would have added a deeming provision as the legislature did in the Explanation to section 10(5) of the Act." The judgment in Dharampur Leather Co. Ltd. case having been passed on the same day by the Supreme Court in the Straw Products case affirms the view in the Straw Products case that the words actually allowed does not include notional allowance. In the Nand Lal Bhandari Mills case the Supreme Court ( per Subha Rao Sikri JJ), held as under:- "that in fixing the depreciation allowance for the years in which the respondent was assessed as a non-resident under the Indian Income-tax Act, the Income-tax Officer had "actually allowed" only a portion of the amount towards depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm prescribed itself requires particulars to be furnished if the assessee claims depreciation. These particulars are required to be furnished in great detail. There is a circular of the Board dated August 31, 1965, which provides that depreciation could not be allowed where the required particulars have not been furnished by the assessee and no claim for the depreciation has been made in the return. The Income-tax Officer in such a case is required to compute the income without allowing depreciation allowance. The circular of the Board dated April 11, 1955, imposes merely a duty on the officers of the department to assist the tax payers in every reasonable way, particularly, in the matter of claiming and securing relief. The officer is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctions "actually allowed". If the assessee has not claimed deduction of depreciation in any past year it cannot be said that it was notionally allowed to him. A thing is "allowed" when it is claiomed. A subtle distinction is there when we examine the language used in section 16 and sections 34 and 37 of the Act. It is rightly said that a privilege cannot be to a disadvantage and an option cannot become an obligation. The Assessing Officer cannot grant depreciation allowance when the same is not claimed by the assessee." 5. The counsel for the revenue has strongly relied upon the judgment of the Supreme Court in CIT Vs. Saharanpur Electrical Supply Corporation Ltd. 194 ITR 294. We fail to understand as to how the said judgment would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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