Milk procurement rate difference and balance additional depreciation allowed as consistent prior-year treatment was followed

Final rate difference paid for milk procurement was treated as allowable business expenditure, not a distribution of profit, because the same claim had already been accepted in the assessee's own earlier years and no distinguishing facts were shown; the disallowance was deleted. Balance additional depreciation was also allowed in the succeeding year where the asset was used for less than 180 days in the year of acquisition, following the same view taken in earlier years; that disallowance was likewise deleted. The Revenue's appeal failed on both substantive issues and the relief granted below was upheld.

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Issues: (i) whether the payment described as final rate difference in relation to milk procurement was allowable as an expenditure or was a distribution of profit; (ii) whether the assessee was entitled to claim the balance additional depreciation in the succeeding year where the asset was put to use for less than 180 days.

Issue (i): Whether the payment described as final rate difference in relation to milk procurement was allowable as an expenditure or was a distribution of profit.

Analysis: The issue had already been decided in the assessee's own case for earlier years, and the jurisdictional High Court had upheld the allowability of the claim. No distinguishing feature for the year under appeal was shown. The appellate finding allowing the deduction was therefore sustained.

Conclusion: The disallowance of the final rate difference was rightly deleted and the issue is decided in favour of the assessee.

Issue (ii): Whether the assessee was entitled to claim the balance additional depreciation in the succeeding year where the asset was put to use for less than 180 days.

Analysis: The same question had been decided in the assessee's favour in earlier years by the Tribunal, and the present year involved no material difference. The reasoning accepted that where only half the additional depreciation could be claimed in the year of acquisition because the asset was used for less than 180 days, the balance could be claimed in the succeeding year.

Conclusion: The disallowance of additional depreciation was rightly deleted and the issue is decided in favour of the assessee.

Final Conclusion: The Revenue's appeal fails on both substantive grounds and the relief granted by the first appellate authority is upheld.

Ratio Decidendi: Where an issue has been consistently decided in the assessee's favour in earlier years, and no distinguishing facts are shown, judicial consistency warrants following the earlier view; additionally, the balance of additional depreciation attributable to assets used for less than 180 days in the year of acquisition is allowable in the succeeding year.

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