Depreciation computation on finalised written down value upheld, while remand on interest income was left undisturbed

Depreciation had to be computed on the written down value basis without treating earlier unclaimed depreciation as thrust upon the assessee, because the Tribunal had already deleted those prior depreciation adjustments and that finding had attained finality; the Revenue's challenge on this issue therefore failed. On the interest-income question, the Tribunal had only remanded the matter to the Assessing Officer for fresh consideration in light of the binding decision in Asian Star Ltd., so the High Court declined to interfere with that remand.

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Issues: Whether, for assessment year 2003-04, depreciation had to be taken into account while computing deduction under Chapter VIA of the Income-tax Act, 1961, and whether the Revenue's challenge on the remand relating to interest income deserved interference.

Analysis: The assessee had not claimed depreciation in earlier years, and the depreciation thrust upon it in those years had already been deleted by the Tribunal and had attained finality. In that situation, the Tribunal was justified in holding that, for the year in question, depreciation had to be computed on the written down value determined on the footing that depreciation had not been thrust upon the assessee in the earlier assessment orders. As regards the interest-income issue, the Tribunal merely restored the matter to the Assessing Officer, and the fresh order was to take into account the binding judgment of the Court in Asian Star Ltd.

Conclusion: The first question was answered against the Revenue and the second question was not entertained; the Revenue's appeal failed.

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