Tribunal rules assessee can waive depreciation allowance claim. Department cannot impose if not claimed.

The Tribunal ruled in favor of the assessee, M/s Central Pulp Mills Ltd., stating that the assessee can waive the right to claim depreciation allowance, and the Department cannot impose it if not claimed. The Tribunal emphasized that the deduction of depreciation allowance should only be granted upon the assessee's claim and provision of necessary particulars. They relied on a special Bench order and distinguished the case from previous decisions, ultimately allowing the appeal in favor of the assessee.

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Issues:
1. Whether an assessee can waive the right to claim depreciation allowance.
2. Whether the Department can thrust depreciation allowance on the assessee even if not claimed.
3. Interpretation of statutory provisions regarding depreciation allowance.
4. Applicability of previous judicial decisions on the current case.
5. Priority of set off and allowance in case of depreciation deduction.

Analysis:
1. The main issue in this appeal is whether an assessee can waive the right to claim depreciation allowance. The assessee, M/s Central Pulp Mills Ltd., contested that the depreciation allowance was imposed on them despite not claiming it or providing the necessary particulars for its computation. The Income Tax Officer (ITO) had deducted a depreciation allowance of Rs. 49,22,621 from the adjusted profit, resulting in a nil income after considering brought forward losses and depreciation. The assessee argued that the allowance should only be granted upon their claim and furnishing of prescribed particulars, which was not done in this case.

2. The representative for the assessee argued that the Poona Bench's consistent view was that depreciation allowance must be deducted to arrive at a commercial profit, even if the assessee does not claim it. However, they contended that the special Bench of Bombay 'A' in a specific case held that an assessee can waive the right to depreciation allowance, and the Department cannot impose it. The assessee further pointed out the Madras High Court decision indicating circumstances where a departure from an earlier view is permissible. The Departmental Representative emphasized that depreciation allowance is essential for determining true profits in a business sense.

3. After considering the arguments, the Tribunal upheld the claim of the assessee. The Tribunal relied on the special Bench order, which stated that the assessee can waive the right to depreciation allowance, and the Department cannot enforce it. The Tribunal agreed that the deduction of depreciation allowance was not justified and deleted it. They also noted that blindly following a previous view in the same case is not necessary, as indicated by the Madras High Court decision. The Tribunal distinguished the question before the Bombay High Court from the current appeal.

4. The Tribunal acknowledged the importance of the issue for the priority of set off and allowance. If depreciation for the current year is not deducted, the assessee can claim set off of earlier losses or allowances, which may lapse due to time limits. Ultimately, the appeal was allowed in favor of the assessee.

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