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of <h1>Income Tax Tribunal upholds depreciation computation, rejects Revenue's argument on reopening past assessments. High Court affirms decision.</h1> <h3>THE COMMISSIONER OF INCOME TAX, LTU Versus M/s SILVASSA INDUSTRIES LTD</h3> THE COMMISSIONER OF INCOME TAX, LTU Versus M/s SILVASSA INDUSTRIES LTD - TMI Issues:- Whether the Tribunal was justified in allowing depreciation to be computed on the basis of actual cost of the assets without reducing the depreciation of earlier years allowed to the Assessee even though not claimed by it and thereby ignoring Explanation 5 to Section 32 of the Income Tax Act.Analysis:1. The Assessing Officer disallowed part of the claim for depreciation for the Assessment Years 2003-04, 2004-05, and 2005-06, stating that in earlier years, depreciation not claimed was thrust upon the Assessee, resulting in a lower written down value of Plant & Machinery and consequently lower allowable depreciation in the subject years.2. The Commissioner of Income Tax (Appeal) and the Tribunal had set aside the depreciation thrust upon the Assessee for earlier years based on a decision of the Apex Court in a specific case.3. The Revenue argued that Explanation 5 to Section 32 of the Income Tax Act, added w.e.f. April 1, 2002, allows depreciation even if not claimed by the assessee, necessitating a recomputation of the written down value of Plant & Machinery and restricting depreciation.4. The Tribunal, in its order, upheld the decision of the CIT(A) and held that the issue of higher depreciation than claimed in earlier years was settled by previous Tribunal decisions, making it impossible to reopen assessments for earlier years and invoke Explanation 5 to Section 32.5. The Tribunal maintained that assessments for earlier years were final, and without disturbing the written down value of Plant & Machinery for those years, changing the opening written down value for the subject years was not feasible. The Tribunal concluded that Explanation 5 could not unsettle final assessment orders accepted by both the Revenue and the Assessee.6. The High Court agreed with the Tribunal's reasoning, stating that the law was self-evident, and there was no need to consider the proposed question of law. Consequently, all three appeals by the Revenue were dismissed with no order as to costs.
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