TMI Blog2002 (11) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... AO the amount of depreciation is amounting to Rs. 5,64,033 and by application of s. 34A, the AO allowed the sum of Rs. 3,76,022. The AO calculated the unabsorbed carried forward depreciation at Rs. 5,64,033 on the basis of capitalised incidental expenses which were not considered for depreciation for the asst. yr. 1986-87. Therefore, the AO re-calculated the carried forward unabsorbed depreciation. According to the assessee the AO had no power to recalculate unabsorbed carried forward depreciation. According to the assessment framed for earlier years there was unabsorbed depreciation amounting to Rs. 8,19,840. For this proposition heavy reliance has been placed on the decision of Hon'ble Madras High Court in the case of CIT vs. Century Flo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad substituted the figure for Rs. 5,64,033 on the basis of some disallowance made by AO for asst. yr. 1986-87. In other words, no such exercise was done in assessment orders for subsequent years. In these circumstances, it was not permissible for the AO to disturb the figure of unabsorbed brought forward depreciation without interfering with the earlier assessment orders. The decision relied upon by the learned authorised representative in the case of CIT vs. Century Flour Mills Ltd. supports the viewpoint forwarded by him. The learned Departmental Representative could not cite any contrary decision. In this view of situation, we do not see any justification in reducing the quantified unabsorbed depreciation brought forward from earlier yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee only in respect of cost of tumbling drier and SS Reactor. The AO computed the claim of assessee only with respect to cost of plant and machinery, and ignored all other items. The CIT(A) upheld the order of AO. The learned authorised representative of the assessee contended that there was no justification in ignoring the cost of the assessee towards incidental expenditure, utilities and electric equipment. According to the learned authorised representative these were part and parcel of plant and machinery and investment allowance should have been allowed on these items also. For incidental expenses he placed reliance on the following decisions: (i) Challapalli Sugar Ltd. vs. CIT 1974 CTR (SC) 309 : (1975) 98 ITR 167 (SC). (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration, the asset was sold for a sum of Rs. 1,45,000. According to books of account the cost of this asset was shown at Rs. 1,60,081.50. The depreciation allowed thereon was amounting to Rs. 58,728. Thus, the assessee calculated the cost as per its books of accounts as at the beginning of the year at Rs. 1,01,253. After taking into consideration the sale amount of Rs. 1,45,000 a profit of Rs. 43,646 was worked out and included in the P L a/c. It is the claim of the assessee that no such profit was assessable in view of concept of block of assts, only sale price had to be reduced from the block of assets. Therefore, the assessee is eligible to reduce its income shown in excess of Rs. 43,646. 9. The learned Departmental Representative ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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