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of <h1>Tribunal's Depreciation Deduction Decision Upheld for 2008-09 Assessment Year</h1> <h3>Commissioner of Income Tax-I Versus M/s Krishi Utpadan Mandi Samiti</h3> Commissioner of Income Tax-I Versus M/s Krishi Utpadan Mandi Samiti - TMI Issues:Challenge to judgment of Income Tax Appellate Tribunal regarding depreciation deduction under Section 32 of the Income Tax Act, 1961 for Assessment Year 2008-2009.Analysis:The appellant/department contested the Tribunal's decision allowing a deduction of Rs.59,92,835 as depreciation on assets, claiming it was a double deduction as the cost of assets purchased had already been fully claimed as expenditure. Counsel for the appellant relied on the Supreme Court judgment in Escorts Limited case to argue against the allowance of depreciation under Section 32 of the Act.In response, the respondent's counsel cited the Punjab & Haryana High Court judgment in Tiny Tots Educational Society case, asserting that depreciation is allowable. The Tribunal considered the Punjab & Haryana High Court's ruling in Commissioner of Income Tax Vs. Market Committee, PIPLI, stating that when income is nil and double benefit is given in allowing depreciation, the claim is justified. The respondent argued that the department erred in disallowing depreciation, and the Tribunal correctly allowed the claim.The High Court examined the Tribunal's judgment and found that the issue of depreciation on the assets had been previously examined in the assessee's case for the earlier assessment year, where the Tribunal directed the Assessing Officer to allow the claim. The High Court noted that the Tribunal's findings were based on cogent material and were not perverse. It emphasized that findings of fact cannot be overturned unless perversity is demonstrated.Additionally, since the assessee declared nil income for the relevant assessment year, the Tribunal's decision to allow depreciation was deemed appropriate by the High Court. The appellant's counsel failed to provide any reasonable cause for allowing depreciation, and the Circular No. 3/2011 stated that the appeal was not maintainable.Consequently, the High Court answered the framed question against the department and upheld the Tribunal's judgment, dismissing the appeal without costs.
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