TMI Blog2004 (10) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... details have been furnished to the file of the learned AO. 2. The relevant and material facts for the disposal of the issue involved in these grounds of appeal are that originally the assessment was completed on 31st July, 1996, by the AO under s. 143(3) of the Act at nil income as a result of deduction under s. 80-IA of IT Act. The assessee is a pharmaceutical company having two industrial undertaking units styled as Unit I and Unit II manufacturing drugs in both the units. On examination of the records, the CIT, Shimla, observed that the order passed by the AO was erroneous and prejudicial to the interest of the Revenue. Accordingly, the CIT, Shimla, vide his order under s. 263 dt. 22nd March, 1999, read with order under s. 154 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which separate depreciation chart for Unit I and Unit II amounting to Rs. 11.43 lakhs and Rs. 351.75 lakhs had been claimed. The assessee submitted before the CIT(A) that the AO has not considered the additions of Rs. 1,297.82 lakhs in Unit II for the purpose of depreciation. The assessee pleaded before the CIT(A) that complete details of all additions to the fixed assets along with the photocopies of the bills were duly filed before the AO and hence the AO has erred in law in rejecting the claim of the assessee. 2.2 The CIT(A) after considering these submissions of the assessee, upheld the order of the AO and dismissed the appeal of the assessee by making following observations : "In my considered opinion, the appellant cannot rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made no submissions as to how claim of depreciation could be revised during such proceedings. Explanation 5 inserted by the Finance Act, 2001, is also of no help to the appellant. It has been held by the Hon'ble Kerala High Court in the case of CIT vs. Kerala Electric Lamp Works Ltd. (2003) 183 CTR (Ker) 182 : (2003) 261 ITR 721 (Ker) that Expln. 5 inserted by the Finance Act, 2001, has no retrospective effect. In the light of these facts, the ground raised in appeal is dismissed." 2.3 We have considered the rival submissions, perused the records and carefully gone through the orders of the tax authorities below. 2.4 The admitted facts appearing from the orders of the tax authorities below are that the CIT(A) set aside the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so we are not required to adjudicate upon this issue. Therefore, this citations given by the learned Authorised Representative for the assessee are of no help to the assessee. 2.6 Another argument advanced by the learned Authorised Representative for the assessee before us was that in the instant case, the AO in its revised order of assessment has partly allowed the claim of depreciation claimed by the assessee, but has not allowed full claim of the assessee and so it cannot be said that since the assessee has not taken this claim of depreciation in its original claim, the same cannot be allowed to the assessee in its revised claim of depreciation filed during the reassessment proceedings before the AO. 2.7 We have considered these s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not considering the depreciation in respect of Unit No. II as computed by the assessee in its revised computation. 2.10 Learned Authorised Representative for the assessee also contended before us that the assessee can claim depreciation on revising the same during such proceedings as per Expln. 5 inserted by the Finance Act, 2001, as the same should be deemed to have taken effect from the retrospective effect and so even during the assessment proceedings for the asst. yr. 1995-96, the assessee can claim the same under this Expln. 5 even though this was inserted by the Finance Act, 2001. In support thereof, he has placed reliance on the decision of the Tribunal Madras Bench "A" (Special Bench) in the case of ITO vs. V.R.V. Co. On going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually intended to nullify the effect of the decision of the apex Court rendered in the aforesaid decision, the Explanation added should have been given retrospective effect in express terms. On the other hand, the legislature itself thought that the Explanation should work only prospectively and did not intend to render the decision rendered prior to the amendment relating to the earlier assessment years in question nullified. The Finance Bill, 2001, clearly spells out that this amendment will take effect from April, 2002, and will accordingly, apply in relation to the asst. yr. 2002-03 and subsequent years. The memorandum explaining the provisions in the Finance Bill, 2001, also states that it will take effect only w.e.f. April, 2002, and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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