Tribunal affirms WDV method for depreciation rate at 80%, dismissing Revenue's appeal. Correct application of statutory allowances stressed.

The Tribunal upheld the Commissioner of Income-tax(Appeals)'s decision, confirming that the assessee had opted for the WDV method and was entitled to correct the rate of depreciation to 80%. The appeal filed by the Revenue was dismissed, and the cross objection filed by the assessee was dismissed as infructuous. The Tribunal emphasized that statutory allowances like depreciation must be correctly applied by the Assessing Officer, even if the rate initially claimed was incorrect.

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Issues Involved:
1. Whether the assessee exercised the option to claim depreciation on windmill under the Written Down Value (WDV) method or straight-line method.
2. Whether the assessee could correct the rate of depreciation from 15% to 80% through a letter during the assessment proceedings.
3. The applicability of the Supreme Court decision in Goetze (India) Ltd. v. CIT regarding claims made without filing a revised return.

Issue-wise Detailed Analysis:

1. Exercise of Option for Depreciation Method:
The primary issue revolves around whether the assessee exercised the option to claim depreciation on windmill using the WDV method or the straight-line method. The rule provides an option to choose either method, but it must be exercised before the due date for filing the return. The Commissioner of Income-tax(Appeals) observed that the relevant rule does not specify that the option has to be exercised by filing a separate format before the assessing authority. The assessee had filed its return of income before the due date, computing income based on claiming depreciation on the WDV method, albeit at an incorrect rate of 15% instead of 80%. The Commissioner concluded that the assessee had indeed exercised the option for the WDV method, and the mistake was only in the rate of depreciation.

2. Correcting the Rate of Depreciation:
The second issue is whether the assessee could correct the rate of depreciation from 15% to 80% through a letter during the assessment proceedings. The Revenue argued that the assessee did not exercise the option for the WDV method in the earlier assessment year and thus could not change the rate. The Commissioner of Income-tax(Appeals) held that the assessee had claimed depreciation on the WDV method but at an incorrect rate, and the prayer to apply the correct rate of 80% should be accepted. The Tribunal agreed with this finding, noting that the assessee was not making a fresh claim but rectifying a mistake apparent on record.

3. Applicability of Goetze (India) Ltd. v. CIT:
The third issue concerns the applicability of the Supreme Court decision in Goetze (India) Ltd. v. CIT, which held that a claim for deduction cannot be made other than by filing a revised return. The Revenue argued that the assessee's claim to correct the depreciation rate through a letter was invalid as it was not made through a revised return. However, the Tribunal found that the assessee was not making a fresh claim but correcting an apparent mistake. The Tribunal referenced the Punjab & Haryana High Court's decision in CIT v. Ramco International, which allowed a claim for deduction without a revised return when the claim was already made but not considered correctly. The Tribunal also cited the ITAT, Chennai Bench 'D' decision in K.K.S.K. Leather Processors (P.) Ltd., which emphasized that the Assessing Officer is obligated to allow the correct rate of depreciation as per statutory provisions.

Conclusion:
The Tribunal upheld the Commissioner of Income-tax(Appeals)'s decision, confirming that the assessee had opted for the WDV method and was entitled to correct the rate of depreciation to 80%. The appeal filed by the Revenue was dismissed, and the cross objection filed by the assessee was dismissed as infructuous. The Tribunal emphasized that statutory allowances like depreciation must be correctly applied by the Assessing Officer, even if the rate initially claimed was incorrect.

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