Income Tax Appellate Tribunal - Hyderabad
Andhra Cement Co. Ltd. vs Income-Tax Officer on 25 March, 1986
Equivalent citations: [1986]18ITD93(HYD)
ORDER
T.V. Rajagopala Rao, Judicial Member
1. Since common points are involved in these appeals and as the assessee is one and the same in both these appeals they can be taken up together and disposed of by a common order for the sake of convenience.
2. The assessee is a public limited company which manufactures and sells cement. The assessee is having manufacturing units at three places, namely, Vijayawada, Visakhapatnam and Nadikudi. We are concerned with two assessment years in these appeals, i.e., assessment year 1982-83 for which previous year ended by 31-3-1982 and the assessment year 1983-84 for which previous year ended by 31-3-1983. For the assessment year 1982-83, the assessee had filed the original income-tax return on 9-9-1982. In the said return, it had claimed depreciation of Rs. 1,29,49,590. However, the assessee had revised its income-tax return for the assessment year 1982-83 on 15-5-1984. In its revised return, it claimed depreciation according to the Income-tax (Fourth Amendment) Rules, 1983 which came into force from 2-4-1983. The amount of depreciation claimed in the revised return was Rs. 1,89,05,488. The difference between the depreciation claimed in the original return and the depreciation claimed in the revised return was Rs. 59,55,898.
3. For the assessment year 1983-84, the assessee filed its income-tax return on 29-7-1983. In the said return itself depreciation was claimed at enhanced rates as per the provisions of the Income-tax (Fourth Amendment) Rules on its plant and machinery and buildings. The claim of depreciation amounted to Rs. 3,31,86,837. However, the ITO while completing the assessment for the assessment year 1983-84 granted depreciation at the old rates only but not at the rates envisaged in the abovesaid Rules. The amount of depreciation, thus, granted by the ITO in his assessment order dated 15-4-1985 was stated to be Rs. 2,59,16,291. Thus, the difference between the amount of depreciation claimed in the income-tax return for 1983-84 and the actual depreciation granted by the ITO is Rs. 72,70,546.
4. The grounds on which both the lower authorities negatived the additional claim of depreciation made by the assessee-company were one and the same. The ITO discussed the reasons for not conceding the enhanced rates of depreciation claimed by the assessee in his assessment orders for 1982-83, dated 26-12-1984. He stated that the enhanced rates came into effect under the impugned Rules from 2-4-1983. He stated that it is an accepted principle that the law as it stood on the first day of the assessment year alone is applicable to that assessment year, unless expressly provided otherwise. He further stated for the assessment year 1982-83, the law as it stood on 1-4-1982 alone is applicable. He also found that impugned Rules were made effective from 2-4-1983. Thus, the ITO held that the impugned Rules came into force after the end of the assessment year 1982-83. He further stated that it is provided in the impugned Rules that the new rates came into force from 2-4-1983. Therefore, he felt beyond any reasonable doubt that for the assessment year 1982-83 whose previous year ended on 31-3-1982, the impugned Rules have no application at all. He also held that provision relating to depreciation is not procedural law but represents substantive law. He made a reference to pages 1.138A and 139 of Taxmann's Income-tax Rules, 1983 edn., in which it was stated that higher rates of depreciation specified in the impugned Rules are applicable for the assessment year 1984-85 onwards and not even for the assessment year 1983-84, not to speak of the assessment year 1982-83. The ITO negatived the contention raised before him that the impugned Rules should apply to all the assessment years pending as on that date though the assessee relied upon the decision of this Tribunal in South India Road Transport v. ITO [1983] 4 ITD 176 and the decision of the Madras Tribunal in Rayalaseema Passenger & Goods Transports (P.) Ltd. v. IAC [1984] 7 ITD 111 in support of its claim for higher depreciation. The ITO distinguished both the decisions relied upon by the assessee. The ITO ultimately drew support from the orders of the Commissioner (Appeals) and, therefore, he had disallowed Rs. 59,55,898 towards depreciation for the assessment year 1982-83. So also for disallowing the higher claim of depreciation for the assessment year 1983-84 he had adopted the reasoning given by him in his assessment order relating to the assessment year 1982-83. Thus, the ITO under his assessment orders dated 15-1-1985 disallowed the higher claim of depreciation claimed by the assessee under the impugned Rules. As already noted the claim, thus, disallowed for the assessment year 1983-84, was Rs. 72,70,546.
5. Aggrieved against the short grant of depreciation in the hands of the ITO for the assessment years 1982-83 and 1983-84, the assessee-company took the matters in appeals before the Commissioner (Appeals). The learned Commissioner (Appeals) disposed of the appeals before him for the assessment years 1982-83 and 1983-84 by a common order dated 30-8-1985. It was argued before the learned Commissioner (Appeals) that the rates of depreciation are only rules of procedure or represents a branch which dealt with procedural law and, therefore, the rates prescribed under the impugned Rules would have to be applied in computation of income in all pending assessments. The assessee-company on the strength of the decision of the Hon'ble Supreme Court in Mathra Parshad & Sons v. State of Punjab AIR 1962 SC 745 argued that as held similarly in the said decision that though the impugned Rules came into effect only from 2-4-1983, the benefit of higher rates of depreciation available under them must be available for the whole of the assessment year 1983-84 for which it was granted. Lastly, reliance was also placed on South india Road Transport's case (supra), Rayalaseema Passenger & Goods Transports (P.) Ltd.'s case (supra) on behalf of the assessee-company. The learned Commissioner (Appeals), however, did not agree with any one of the contentions raised on behalf of the assessee. Firstly, on the strength of the decision of the Hon'ble Supreme Court in the case of CIT v. Isthmian Steamship Lines [1951] 20 ITR 572. The learned Commissioner (Appeals) held that the income-tax on the previous year's income should be computed in accordance with the law to be applied in the assessment year relevant to the said previous year, unless otherwise provided expressly or by necessary implication. He also held on the strength of the Privy Council's decision in Maharajah of Pithapuram v. CIT [1945] 13 ITR 221 that the subject of charge is not income of the year of the assessment but the income of the previous year. He further held that as the Finance Act comes into force on the first day of April in each year, the law has to be applied to the previous year's income is the law in force at the commencement of the assessment year that is on the first April in each year. He also relied upon the Supreme Court's decision in CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 as well as the decision in Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 and also the Calcutta High Court's decision in CIT v. Madhusudan Agarwalla [1978] 111 ITR 525 in support of the abovesaid proposition. He also held that the CBDT already considered the impugned Rules and took a decision that the rates of depreciation granted under those Rules would be applicable only to the income of the previous year relevant to the assessment year 1984-85 and he had quoted CBDT's view as it was available at page 1.390 of the Income-tax Rules, Law and Practice, 1984 edn. by S.R. Wadhwa. The learned Commissioner (Appeals) also held that the rates of depreciation prescribed under the Income-tax Rules, 1962 ('the Rules') are a branch of substantive law and not procedural as contended before him. In that connection, he had considered the decision of the Allahabad High Court in CWT v Laxmipat Singhania [1978] 111 ITR 272, the Supreme Court decision in Izhar Ahmad Khan v. Union of India AIR 1962 SC 1052 and also Sampath Iyengar's Commentary on Law of Income-tax, Seventh edn., p. 452 and ultimately held that the change brought about in the rates of depreciation is only in the realm of substantive law and not procedural law, because it affects the computation of income and the total tax liability. Thus the learned Commissioner (Appeals) by his common order dated 30-8-1984 dismissed the claim of enhanced rates of depreciation for the assessment year 1982-83 as well as 1983-84 and dismissed the appeals filed before him by the assessee-company.
6. Further aggrieved by the impugned order of the learned Commissioner (Appeals) dated 30-8-1985, the assessee-company came up in second appeals and, thus, the matters are now before us. All the contentions which are raised before the learned Commissioner (Appeals) on behalf of the assessee-company are also raised before us. Firstly, it is contended that the impugned Rules are rules of procedure and, hence, retrospective in character and, consequently, they apply to all the pending assessments. Shri C.V.K. Prasad, the learned counsel for the assessee, relied upon the Special Bench decision of the Delhi Tribunal in Biju Patnaik v. WTO [1982] 1 SOT 623 as well as Laxipat Singhania's case (supra). In the first of the decisions, he submitted that the Delhi Tribunal considered that Rule 1BB of the Wealth-tax Rules, 1957 ('the 1957 Rules') is held to be procedural in character even though it prescribes the method in which the valuation of residential building is to be made. So also the Allahabad High Court decision in the second cited case held that Rules 1C and 1D of the 1957 Rules are rules of procedure and evidence and not rules of substantive law though they prescribe how to value the unquoted preference shares. On the strength of above two decisions, it was argued that the impugned Rules which prescribed the rates of depreciation should be considered as rules of procedure andn ot substantive law and ex hypothesi retrospective in nature and all pending assessments should be completed by applying those rates. On the other hand, Shri Santhanam, the learned departmental representative, contended that the Calcutta Bench 'C in ITO v. Bharat Roadways [1985] 12 ITD 647 unequivocably held that the rates of depreciation mentioned in Appendix I of Part I are part of Rule 5 of the Rules and thereby they form part of Section 32(1) of the Income-tax Act, 1961 ('the Act') itself and, as such, Appendix I of Part I forms part of substantive law and is not procedural in nature. They further held when there is an amendment of the substantive law, it is normally not retrospective unless the amending Act itself makes it retrospective. The learned departmental representative also relied upon Sampath Iyengar's Law of Income-tax, Seventh edn., p. 452, where it was held that the assessability, method of computation, the exemptions or the reliefs permissible, the rates of taxes and the right of appeal or reference all confer substantive rights; they can be neither abridged nor enlarged during the course of the assessment year, except by specific retrospective legislation. The exposition of law by the learned commentator also would suggest that the rates of depreciation are in the realm of substantive law but does not constitute procedural law.
7. After hearing both the sides, we are of the view that the stand taken by the learned departmental representative appears to be correct and plausible. We hold that the rates of depreciation are to be determined as per Rule 5 and the depreciation chart as given in second column of the table in Part I of Appendix I. Thus, it would appear to us that whatever percentage of rates are prescribed as rates of depreciation, in the second column of the table of Part 1 of Appendix I automatically become part of Rule 5. Therefore, we are one with the Calcutta Tribunal Bharat Roadways' case (supra) when they held that any change in the rates of depreciation constitutes substantive law and does not remain merely as procedural law. Therefore, inasmuch as the rates of depreciation prescribed under the Rules are substantive rules in nature, they can be enhanced or reduced only by a prospective legislation and any rules either enhancing the rates of depreciation should be held to be a substantive law and so prospective in nature and not retrospective. There is no question of all the pending assessments being governed by them.
8. In this case, the impugned Rules are found published in [1983] 141 ITR (St.) 61. As can be seen from the said notification, the Notification No. S.O. 151(E) dated 28-2-1983 was published in the Gazette of India, Extraordinary, Part II, Section 3(ii) but they were directed to come into force on 2-4-1983. The previous year relevant to the assessment year 1982-83 is from 1-4-1981 to 31-3-1982 and the law that is to be applied, for the income earned during that previous year, is not definitely which came into force either on 28-2-1983 or on 2-4-1983 and, therefore, we are firmly of the opinion that the enhanced rates of depreciation under the impugned Rules did not apply while determining the taxable income of the assessee-company for the assessment year 1982-83 and the depreciation at the higher rates on plant, building and machinery of the assessee cannot be computed at those higher rates and allowed as a deduction while determining the taxable income of the assessee-company for 1982 83.
9. Now coming to the assessment year 1983-84, the contentions of the assessee's counsel Shri C.V.K. Prasad are that though the impugned Rules were framed and published on 28-2-1983, the intendment of notification of the Rules is important to be noted. Shri C.V.K. Prasad contended that nothing prevented the CBDT to state clearly that the impugned Rules apply only from the assessment year 1984-85 if that were to be their intention. Had it been their intention, they could have at least waited and published the impugned Rules only on 2-4-1983. He further argued that it is significant to note that 1-4-1983 was a Sunday and dies non for all official purposes and perhaps that is the reason why the impugned Rules were ordered to come into force from 2-4-1983. He further argued that the general principle that the law as on first day of April should govern the assessment for any previous year is not absolute but is subject to qualification by any express provision or necessary implication and for this proposition, he relied upon the decision of the Madras High Court in CIT v. Best & Co. (P.) Ltd. [1979] 119 ITR 830. On the basis of this observation, he argued that the necessary implication to prescribe the date of coming into force of the impugned Rules as 2-4-1983, instead of 1-4-1983 might be because 1-4-1983 being a Sunday, a holiday and dies non for all official purposes and not with a view to make those Rules non-applicable to the assessment year 1983-84. He further contended that in South India Road Transport's case (supra) this Tribunal held, interpreting a similar notification altering the depreciation rates on lorries, that though the notification dated 24-7-1980 was ordered to come into force 'at once'. This Tribunal took the view that the altered depreciation rates under the said notification would apply for the assessment year 1980-81 also. When a notification of similar Rules affecting depreciation dated 24-7-1980, which is at least four months after the first day of the assessment year, was held applicable to the assessment year 1980-81, there is no reason why the impugned Rules which came into effect from 2-4-1983 should not be applied for the assessment year 1983-84 especially when there is plausible explanation as to why 1-4-1983 was not prescribed as coming into force of the said Rules. Shri C.V.K. Prasad also contended that similarly in Rayalaseema Passenger & Goods Transports (P.) Ltd.'s case (supra) the Madras Tribunal held that the same Rules affecting depreciation on motor vehicles dated 24-7-1980 were held applicable for the assessment year 1980-81 and in that case the Tribunal even rejected the contention of the revenue that applying Rules dated 24-7-1980 for the assessment year 1980-81 is not a mistake apparent from record. Rejecting the said argument, the Madras Tribunal held that not granting depreciation at 40 per cent but conceding only 30 per cent on lorries, which is the old rate prior to 27-4-1980 is a clear mistake on record warranting action under Section 154 of the Act. It is also contended by Shri C.V.K. Prasad that granting additional percentage of depreciation on buildings, plant and machinery held by the assessee is akin to exemption from payment of sales tax considered by the Hon'ble Supreme Court in Mathra Par shad & Sons' case (supra). In that case, the State of Punjab by Government Notifica-tion (No. 4556-E & T (Ch.)-54-957) dated 27-9-1954 exempted sales tax on manufacture of tobacco but did not prescribe the date from which the exemption was to operate. The question which fell for consideration was whether the exemption under notification issued on 27-9-1954, has effect from that date or from the beginning of the financial year. The majority of the Judges of the Hon'ble Supreme Court considered the matter and held as follows :
12. There is no doubt that the tax is a yearly tax. It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949 was above the taxable quantum. The tax is to be levied on the taxable turnover of a dealer every year. The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of any period some deductions have to be made for the same period. This clearly shows that the tax is for a year. The method of collection allows collection of tax at intervals ; in some cases, the tax is collected at the end of the year ; in some others, the tax is collected quarterly and in still other cases, even monthly. If the exemption can be said to operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would be different for different persons. Those who are paying the tax annually would get exemption for the whole year; but those who are paying it quarterly or monthly would get benefit in the quarter or the month of the Notification but not for earlier quarters or months. It could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment.
13. The exemption thus must operate either from the date of the Notification or from the commencement of the financial year. Here, the nature of the tax, as disclosed in Sections 4 and 5, is decisive. In Section 5, the tax is made leviable 'on the taxable turnover every year of a dealer'. The divisions of the year and the taxable turnover into different parts are to make easy the collection of tax and form part of the machinery sections. If the tax is yearly and is to be paid on the taxable turnover of a dealer, then the exemption, whenever it comes in, in the year for which the tax is payable, would exempt sales of those goods throughout the year, unless the Act said that the Notification was not to have this effect, or the Notification fixed the date for the commencement of the exemption. In the present case, the Notification did not fix the date from which the exemption was to operate, probably because the Act omitted to make such provision, enabling the State to do so and the exemption must, therefore, operate for the whole year, during which it was granted. (p. 750) Similarly, in this case though the notification was ordered to have effect from 2-4-1983, in fact it was intended to apply for the assessment year 1983-84 especially when there is an adequate explanation for not prescribing 1-4-1983 as the beginning of operation of those Rules. He invited our attention to the Supreme Court's decision in CIT v. J.H. Gotla [1985] 156 ITR 323, where it is held that in a taxing statute where strict interpretation of a statutory provision leads to unjustifiable or absurd results equitable construction is permissible. So also, he drew our attention to Saroj Aggarwal v. CIT [1985] 156 ITR 497 (SC), where it is held that too hypertechnical or legalistic approach should be avoided in looking at a provision. It must be equitably interpreted and justly administered. The Courts should, whenever possible, unless prevented by the express language of any section or compelling circumstances of any particular case, make a benevolent and justice-oriented inference. Shri C.V.K. Prasad further submitted that ordinarily the Finance Act would be passed governing the rates of income-tax, etc., for a particular financial year. It is most unusual to think that the Parliament would pass a Finance Act prescribing the rates of income-tax, etc., for an assessment year beyond the current assessment year. So also, it is difficult to postulate that the CBDT would frame Rules for the assessment year 1984-85 even on 28-2-1983. Ordinarily, we presume that the CBDT would prescribe rules of depreciation first for the assessment year 1983-84 and then only for assessment year 1984-85. We cannot postulate that the CBDT would prescribe the rates of depreciation for the assessment year 1984-85 without prescribing for the assessment year 1983-84 and that too even before the first day of assessment year relevant to the assessment year 1983-84. Therefore, the reasonable inference which can be gathered from the impugned Rules is that they are intended to govern the assessment year 1983-84 and not for the assessment year 1984-85. Therefore Shri C.V.K. Prasad ultimately prayed that having regard to all the above, the assessee-company may be granted depreciation at the revised rates under the impugned Rules at least for the assessment year 1983-84.
10. The learned departmental representative, on the other hand, argued that the assessee is not entitled for this relief even for the assessment year 1983-84. He had cited the decisions in Scindia Steam Navigation Co. Ltd.'s case (supra). In that case, a steamship called 'El Madina' was lost in enemy action. The Government paid compensation. The difference between the original cost of the ship and its written down value was Rs. 9,26,532. As the total compensation exceeded the cost price, the assessee had recouped themselves all the amounts deducted for depreciation. The point of controversy is whether the above amount of Rs. 9,26,532 is liable to be included in the total income of the assessee-company for the assessment year 1946-47. The liability of the assessee-company to be taxed fell to be determined as on 1-4-1946, but the proviso to Section 10(2)(vii) of the Indian Income-tax Act, 1922, under which the charge was made had been introduced by the Income-tax (Amendment) Act, 1946 which came into force on 4-5-1946. The Bombay High Court held that the abovesaid proviso was not retrospective in its operation and the amount, in question was not liable to be included in the taxable income of the assessee and answered the question in the negative. The Supreme Court upheld the decision of the Bombay High Court on the ground that the amounts of compensation were received by the assessee in the month of July 1944, whereas the proviso to Section 10(2) (vii) came into force on 4-5-1946 and it was not in force on 1-4-1946, the day on which the liability to pay tax for the assessment year 1946-47 crystallised. He also quoted before us the decision of the Supreme Court in Kesoram Industries & Cotton Mills Ltd. v. CWT [1966] 59 ITR 767 in which it is held that the primary object of the Finance Act is only to prescribe the rates so that the tax can be charged under the 1961 Act. The 1961 Act is a permanent Act whereas the Finance Act is passed every year and its main purpose is to fix the rates which would be charged under the Act for that year. A liability to pay income-tax is a present liability though it becomes payable after it is quantified in accordance with the ascertainable data. There is a perfected debt at any rate on the last day of the accounting year and not a contingent liability. The rate is always easily ascertainable. If the Finance Act is passed, it is the rate fixed by that Act ; if the Finance Act is not yet passed, it was the rate proposed in the Finance Bill pending before the Parliament or the rate in force in the preceding year, whichever is more favourable to the assessee. The next decision to which our attention is drawn by the learned departmental representative is the one in Karimtharuvi Tea Estate Ltd.'s case (supra) where it is held as follows :
Now, it is well-settled that the Income-tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force. (p. 264) He also relied upon the Calcutta Tribunal's decision in Bharat Roadways' case (supra) in which the rules of the depreciation dated 24-7-1980 were considered and in that decision it was held as follows :
The significance of the words 'at once' is unambiguous in the context in which these words have been used in the aforesaid amendment namely, that with effect from 24-7-1980 buses and trucks, etc., would be eligible for depreciation at the rate of 40 per cent irrespective of the date of their acquisition. Even if the trucks had been acquired earlier and were then entitled for depreciation at the rate of 30 per cent, depreciation on them after 24-7-1980 would be at the rate of 40 per cent. Trucks and buses which will be used on and after 24-7-1980 would be eligible for consideration with regard to their depreciation at the rate of 40 per cent in the assessment year 1981-82 only because on 1-4-1981 the law with regard to the depreciation would be as introduced with effect from 24-7-1980. Therefore, the rate of depreciation brought into effect from 24-7-1980 would not govern trucks and buses used prior to 24-7-1980.
Accordingly, the Commissioner (Appeals) in the present case was not right in allowing the depreciation at the rate of 40 per cent.(p. 648) The learned departmental representative also relied upon the CBDT's view on the impugned Rules quoted at page 1.390 supra wherefrom the learned Commissioner quoted in his impugned orders at pages 5 and 6. On the strength of these decisions as well as the view expressed by the CBDT, it was argued that the fact that 1-4-1983 was a Sunday does not have any significance whatsoever. The impugned Rules, as held by the Calcutta Bench of the Tribunal should be considered to be part and parcel of the provisions of Section 32(1) and it constituted substantive law. For the assessment year 1983-84 the income of the previous year is to be assessed. The previous year is from 1-4-1982 to 31-3-1983. For the said income of the previous year, the law as it stood on 1-4-1983 should be applied. If the law is, changed subsequent to 1-4-1983, the changed law is not applicable for the assessment of the previous year as the impugned Rules were specifically ordered to come into force from 2-4-1983. They should not be applied while assessing the income for the assessment year 1983-84.
11. Thus, we heard the arguments on both sides. We are inclined to accept the arguments advanced on behalf of the assessee-company for the assessment year 1983-84. Firstly, we follow the Madras High Court's decision in Best & Co. (P.) Ltd.'s case (supra) and hold that the general rule that the law as on the first day of the assessment year should govern the assessment is subject to a qualification by any express provision or necessary implication. The Madras High Court held that the law as on the first day of April of a particular assessment year governs the assessment is not absolute. Here in this case 1-4-1983 was a Sunday and perhaps that may be the reason why the CBDT thought to make the impugned Rules applicable from 2-4-1983. Therefore, simply because the impugned Rules came into force on 2-4-1983 it cannot be said that the Rules do not govern the assessment for 1983-84. There is no reason why the impugned Rules should have been passed and published on 28-2-1983 itself, were they intend to apply only from the assessment year 1984-85. It is significant that the impugned Rules did not specifically state to which the assessment year they apply. The intention in passing the impugned. Rules was only to apply the enhanced rates of depreciation from 1-4-1983 in which case the impugned Rules clearly apply for the assessment year 1983-84. South India Road Transport's case (supra) and Rayalaseema Passenger & Goods Transports (P.) Ltd.'s case (supra) this Tribunal and the Madras Tribunal, respectively, interpreted similar Rules affecting depreciation which came into force in the middle of the assessment year, but even then, this Tribunal as well as the Madras Tribunal, held that they apply for the assessment year 1980-81 even though, the Rules came into force in July 1980. It is no doubt true that a different note was struck by the Calcutta Tribunal in Bharat Roadways' case (supra). In that case, the Calcutta Tribunal in our opinion went too far to equate the Rules framed by the CBDT ultimately with the provisions of the Act itself, namely, Section 32 (1). In our humble opinion, this deeming is not warranted simply because the rule was framed in pursuance of the powers derived by an authority from a provision of law, the Rules framed by the authority do not automatically become part of the statute. For this reason, we disagree with the Calcutta Tribunal and we wish to follow our own previous decision in South India Road Transport's case (supra) and the Madras Tribunal decision in Rayalaseema Passenger & Goods Transports (P.) Ltd.'s case (supra) in preference to the Calcutta Tribunal decision in Bharat Roadways' case (supra). It is no doubt true that the learned departmental representative vehemently contended that the law to be applied to the income of the previous year is that which is in force on the first day of the assessment year relevant to the previous year. In this case, he argued that the law in force as on 1-4-1983 should be applied. In support of this proposition he relied upon several Supreme Court's decisions which included Isthmian Steamship Lines' case (supra) and Karimtharuvi Tea Estate Ltd.'s case (supra), etc., but they are all cases which deal with the Finance Acts but none of them deal with the Rules framed by the CBDT. Thus, the ratio laid down by the Hon'ble Supreme Court in all the decisions relied upon by the learned departmental representative in our opinion does not apply. While considering the applicability of the Rules framed by the CBDT enhancing the rates of depreciation, over those in vogue, certainly confer advantage or benefit to the assessee and thus the impugned Rules are certainly beneficial provisions, assuming without admitting that the impugned Rules came into force only from 2-4-1983, still as the impugned Rules are beneficial provisions, following the ratio of the Hon'ble Supreme Court in Mathra Parshad & Sons' case (supra) they can still be applied to assessment year 1983-84. Therefore, on this reasoning also, the assessee is entitled for the impugned Rules being applied to its previous year's income relevant for the assessment year 1983-84. In the view we have taken we are of the opinion that the assessee is entitled to claim depreciation under the impugned Rules and, therefore, it is entitled to the relief of Rs. 72,70,546.
12. In the result, the appeal for 1982-83 is dismissed and the appeal for 1983-84 is allowed.