Tribunal allows weighted depreciation on trucks, disallows depreciation on computers, and permits bad debt claim

Goyal Gases (P.) Ltd. Versus Deputy Commissioner Of Income Tax.

Goyal Gases (P.) Ltd. Versus Deputy Commissioner Of Income Tax. - ITD 049, 317, Issues Involved:
1. Whether the revised statement of income furnished constituted a revised return.
2. Disallowance of assessee's claim for weighted depreciation on trucks for the entire accounting period of 27 months.
3. Disallowance of depreciation on computers purchased and leased out.
4. Disallowance of travelling expenses by an employee.
5. Disallowance of bad debt claimed by the assessee.
6. Charging of interest under sections 234A and 234B.

Issue-wise Detailed Analysis:

1. Revised Statement of Income as Revised Return:
The first two grounds of appeal questioned whether the revised statement of income furnished by the assessee on 24th March 1992 constituted a revised return. The tribunal found no merit in the submissions made by the assessee's representative that the revised computation constituted a revised return. It was emphasized that a revised return must be on the prescribed form and properly signed and verified. The tribunal dismissed these grounds, referencing the cases of Gopaldas Parshottamdas v. CIT and Waman Padmanabh Dande v. CIT.

2. Weighted Depreciation on Trucks:
Grounds of appeal Nos. 3, 4, and 5 related to the disallowance of the assessee's claim for weighted depreciation on trucks for the entire accounting period of 27 months. The tribunal found that the assessee, engaged in the business of hiring business assets since 1974, had extended its business activity to leasing trucks. The tribunal concluded that both activities constituted one and the same business due to common management and interlocking of funds. Citing Supreme Court judgments, it was held that the assessee was entitled to weighted depreciation on trucks for the entire period of 27 months, thus allowing these grounds of appeal.

3. Depreciation on Computers:
Grounds Nos. 6, 7, 8, and 9 concerned the disallowance of depreciation on computers purchased from M/s Pertech Computers Ltd. and leased to M/s ALTOS India Ltd. The Assessing Officer noted several discrepancies and concluded that the transaction was sham, as the computers did not exist. The tribunal agreed with the Assessing Officer's findings, emphasizing that the assessee failed to establish ownership and user of the computers. The tribunal excluded certain evidence collected without confronting the assessee but upheld the disallowance of depreciation, treating the hire charges received as instalments of a loan plus interest.

4. Travelling Expenses:
Ground No. 11 involved the disallowance of Rs. 42,990 on account of travelling expenses by an employee, Shri Kaushal Jain, to China. The tribunal found no material to justify the Assessing Officer's finding that the amount was capital. It was noted that the trip aimed at business extension, and the claim was allowed as revenue expenditure.

5. Bad Debt:
Ground No. 15 addressed the disallowance of a bad debt of Rs. 5,21,482. The assessee had advanced Rs. 10 lakhs to M/s Bharatpur Industries and received interest until 30th June 1982. The tribunal noted that the assessee had to file a civil suit to recover the principal and interest and wrote off the interest as bad debt after the death of a partner in November 1988. The tribunal found that the assessee made an honest judgment in writing off the amount and allowed the claim.

6. Interest under Sections 234A and 234B:
The last grievance concerned charging interest under sections 234A and 234B. The tribunal held that interest under section 234A was leviable due to the late filing of the return and directed a recomputation of interest in light of the appellate order. Similarly, interest under section 234B was to be recomputed for default in payment of advance tax.

Conclusion:
The appeal was partly allowed, with the tribunal providing detailed reasoning for each issue, ensuring the application of relevant legal principles and case law.