Double benefit claim rejected where revised income-tax return removed depreciation on duty component and duty credit remained valid

Credit of duty on capital goods or spares cannot be denied merely because depreciation was initially indicated on the duty component under the Income-tax Act, where a revised return excludes that element. The revised return neutralised any earlier depreciation claim, so there was no simultaneous double benefit of depreciation and duty credit. A Chartered Accountant's confirmation supported that position. The Commissioner (Appeals) therefore correctly allowed the credit, and the Revenue's challenge failed.

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Issues: Whether credit of duty on capital goods/spares could be denied on the ground that depreciation had been claimed under the Income-tax Act, thereby resulting in double benefit.

Analysis: The assessees had taken credit of the duty paid on capital goods and had initially filed the income-tax return in a manner indicating depreciation on the duty component. However, the subsequent revised return excluded the duty element from the depreciation claim. On that basis, the situation did not amount to the simultaneous enjoyment of depreciation and duty credit as a double advantage. The earlier claim was neutralised by the revised return, and the supporting Chartered Accountant's letter corroborated that position.

Conclusion: The credit could not be denied on the ground of double benefit. The order of the Commissioner (Appeals) was upheld and the Revenue's appeal was rejected.

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