Income Tax Appellate Tribunal - Mumbai
Taj Lands End Ltd. (Formerly Known As ... vs Acit on 29 May, 2007
ORDER
J. Sudhakar Reddy, Accountant Member
1. This appeal by the assessee is directed against the order of the CIT(A)-IX, Mumbai dated 31 -12-2003 pertaining to assessment year 2000-01
2. The sole issue in this appeal is whether depreciation not claimed can be (sic) on the assessee in computing the total income. The Revenue authorities have held that the assessee has to be allowed depreciation despite the fact that it has chosen not to claim the same. The learned Counsel for She assessee appearing on behalf of the assessee contended that the issue stands covered in favour of the assessee by order of the Tribunal. The learned Counsel submitted that depreciation cannot be thrust upon the assessee when the assessee has chosen not to claim prior to the assessment year 2002-03. He placed reliance on the decisions in the case of The Supreme Vinyl Films Ltd v. DCIT (ITA No 1563/Mum/2005 dated 13th March, 2007). Parksons Press Ltd v. ITO (2007) 12 SOT 128 (ITAI. Mum) and GP Electronics Ltd v. DCIT (ITA No 301/Mum/1994 dated 25th November, 2005). Further reliance was placed on the following decisions and contended that the Special Bench decision in the case of Vahid Paper Converters v. ITO (2006) 98 ITO 165 (Ahd)(SB) is distinguishable inasmuch as the issue considered by the Hon'ble Ahmedabad Special Bench was whether depreciation Under Section 32 of IT Act was to be deducted for calculating deduction under Chapter VIA of the Act:
1. CIT v. Mahendra Mills 234 ITR 56 (SC)
2. Uvifort Metalizers v. DCIT 73 TTJ (Ahd) 381
3. ACIT v. Gujarat State Fertilizers Co Ltd 68 TTJ (Ahd) 862
4. Beta Naphthol P Ltd v. DCIT 50 TTJ (Ind) 375 5 United Phosphorus Ltd v. JCIT 73 TTJ (Ahd) 404 The learned Counsel also contended that Explanation 5 to Section 32 which makes the allowance of depreciation mandatory is not retrospective and the same is applicable only from 01-04-2002. Reliance in this regard was placed on the following judgments:
1. CIT v. Aircel Ltd (2007) TIOL-136-HC-Mad
2. CIT v. Shree Snehavalli Textiles P Ltd 259 ITR 77 (Mad)
3. CIT v. Kerala Electric Lamp Works Ltd 261 ITR 721 (Ker) The learned departmental representative, on the other hand, placed his reliance on the decision Mandhana Exports (P) Ltd v. ACIT (ITA No 3689/Mum/99) to contend that after the omission of Section 34 there is no condition of furnishing the information to be eligible to claim depreciation and therefore the assessing officer has to allow the depreciation even though the assessee is not claiming it and the decision of the Ahmedabad Special Bench in the case of Vahid Paper Converters and Ors. v. ITO and Ors. 100 TTJ 532
3. We have considered the rival submissions and perused the material available on record. We find force in the pronouncements relied upon the learned Counsel for the assessee. The decision in the case of Vahid Paper Converters and Ors. v. ITO and Ors. (supra) is not applicable to the issue before us as in that case the Special Bench was examining an issue as to whether depreciation is to be allowed in a case where deduction Chapter VIA was claimed and the Special Bench found that before allowing deduction under Chapter VIA depreciation though not claimed by the assessee has to be allowed Therefore, the ratio of that decision is not applicable to the case before In fact the issue is squarely covered by the earlier decisions of the Tribunal as also by the judicial precedents relied upon by the learned Counsel for the assessee in this view of the matter we set aside the orders of the authorities below and direct the assessing officer not to deduction the depreciation that is not claimed by the assessee while computing the total income.
In the result appeal Tiled by the assessee is allowed.
Order pronounced in the open court at the time of hearing.