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In CIT vs. Andhra Cotton Mills Ltd. [(1996) 219 ITR 404 (AP)] for the Assessment Year 1979-80 the assessee, a company, filed its return of income showing a loss of over rupees one crore. Later, a revised return was filed showing a loss of over rupees one crore though for a lesser amount than in the original return. Income-tax Officer, however, computed the current profit at Rs.4,32,364/- and the current depreciation at Rs.9,64,029/- leading to a net loss of Rs.5,31,665/-. Contention of the assessee was that since there was carried forward loss, if depreciation is not allowed as the deduction, then the carried forward loss could be set off against the current profit and the current depreciation could be carried forward without limitation, unlike business loss, for which there is a period of limitation for set off. That was the reason why the assessee had filed the revised return withdrawing the claim for deduction of depreciation. The question that ultimately came to be referred to the High Court was "Whether, on the facts and in the circumstances of the case, the Income- tax Appellate Tribunal is justified in upholding the orders of the Commissioner of Income-tax (Appeals) directing withdrawal of the deduction by way of depreciation allowed by the Income-tax Officer." It was the submission of the Revenue that the provisions of the statute required that true income should be ascertained and such income in respect of a business cannot be properly ascertained without deducting the depreciation which is the first charge on the profit. For this support was drawn from the decision of the Supreme Court in CIT v. Mother India Refrigeration Industries P. Ltd. [1985] 155 ITR 711. High Court said that under Section 139(5) a revised return could be filed if there was an omission or wrong statement. Assessee had prepared a Profit and Loss Account providing for depreciation but it did not opt for that option in the normal course of its business. High Court found that in the original return Profit and Loss Account containing the provision for depreciation had been filed. High Court was of the view that revised return was not a valid return and rejected the contention of the assessee that since particulars of depreciation were not given in the revised return the Income-tax Officer could not take into account the particulars of depreciation contained in the original return. High Court then went on to observe:

In Dasa-prakash Bottling Co. vs. CIT [(1980) 122 ITR 9 (Mad.)] the Madras High Court considered the fact that though the figures had not been furnished in return as such, but the figures were furnished by the assessee during the course of assessment under protest. High Court took the view that once the details and particulars required were furnished by the assessee whether furnished under protest or not did not make any difference and depreciation could be allowed.

In CIT vs. Southern Petro Chemical Industries Corporation Ltd. [(1998) 233 ITR 400 (Mad.)] following its earlier decision in Dasaprakash Bottling case the Court held that the grant of depreciation was a statutory allowance and even if the assessee had not furnished the particulars, it was open to the Income-tax Officer to grant the depreciation and that it would not be perfectly open to the Income-tax Officer to disallow the claim if the assessee had not furnished the particulars. On the other question where the assessee in the revised return had withdrawn his claim of depreciation the Court said that where the assessee had furnished the particulars regarding the claim of depreciation in the original return the assessee would not be able to withdraw his claim for depreciation as in that case revised return would not be valid within the meaning of Section 139(5) of the Act. High Court said that in that it could not be said that the assessee had discovered any omission or wrong statement in the original return. Even otherwise it was not open to the assessee to withdraw the particulars regarding grant of depreciation by filing a revised return. This is how the Court said: -

In Ascharajlal Ram Prakash case [90 ITR 477] Allahabad High Court said that since it is not mentioned in Section 34 as to in what form the prescribed particulars of depreciation must be furnished and that, therefore, there is no requirement in that Section that particulars must be furnished. High Court further went on to say that merely because the form of return provides for a place where the statement of such particulars should be set out, would not mean that in absence of such statement the Income-tax Officer has no power to allow the depreciation. This is contrary to the mandate of Section 34 as well as the Board circular dated August 31, 1965. Madras High Court in Dasa Prakash Bottling Co. case [122 ITR 9] following Allahabad High Court in the case of Ascharajlal Ram Prakash said that Income-tax Officer can disallow the claim of depreciation if the assessee did not furnish the prescribed particulars. It further went on to hold that it would be open to the Income-tax Officer to grant depreciation even if the assessee had not furnished the prescribed particulars. In this case the assessee did not give the particulars relating to depreciation in the return form nor did it claim depreciation. On being called upon by the Income-tax Officer to furnish necessary particulars the assessee in response thereto furnished the particulars under protest. On that basis the Income-tax Officer granted the depreciation. We do not think that the views expressed by the Madras High Court lay down correct law. Section 34 is not in the nature of merely an enabling provision. In the absence of particulars of depreciation as required by Section 34, there is no mandate on the Income-tax Officer under Section 29 to compute the income by allowing depreciation under Section 32. In the second Madras case (CIT vs. Southern Petro Chemicals Industries Corporation Ltd. [233 ITR 400] the assessee did claim depreciation but he withdrew the same in the revised return. On that basis it was held that since the assessee had furnished the particulars regarding the claim of depreciation in the original return the assessee would not be able to withdraw his claim for depreciation. It would appear that High Court proceeded on the basis that the revised return was not a valid return under Section 139(5) of the Act. High Court followed its earlier decision in Dasa Prakash Bottling Co. To us it appears that if the revised return is a valid return and the assessee has withdrawn the claim of depreciation it cannot be granted relying on the original return when the assessment is based on the revised return.