Court emphasizes assessee must claim depreciation for it to be granted

The High Court of Punjab and Haryana ruled that depreciation cannot be deemed as granted if not claimed by the assessee, emphasizing that it must be claimed to be granted. The court decided in favor of the assessee, stating that the Tribunal's presumption of allowance without the assessee's claim was not sustainable. The judgment answered two specific questions in the negative, based on the principle that depreciation allowance is based on actual claims made by the assessee.

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Issues involved: Interpretation of whether depreciation can be deemed to have been granted despite not being claimed by the assessee during the relevant years.

Summary:
The High Court of Punjab and Haryana addressed two references made by the Income-tax Appellate Tribunal regarding the issue of depreciation claimed by two assessees. The primary question was whether the depreciation can be considered as granted even if not claimed by the assessee during the relevant years. The Tribunal referred two specific questions to the court for opinion, focusing on the interpretation of orders passed by the Income-tax Officer for the assessment years 1980-81 and 1981-82 regarding a truck. The facts revealed that the assessee did not claim depreciation for consecutive years, leading to a dispute with the Income-tax Officer. The court analyzed the legal provisions and a circular by the Central Board of Direct Taxes emphasizing that depreciation cannot be thrust upon the assessee and must be claimed to be granted. The court cited previous judgments to support the principle that depreciation allowance is calculated based on actual claims made by the assessee. The court concluded that since the assessee did not claim depreciation, it could not be granted, and the Tribunal's presumption of allowance was not sustainable. The judgment favored the assessee based on the admitted facts, answering both questions in the negative.

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