TaxTMI 
TaxTMI 
2008 (3) TMI 357
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.... it was submitted by the learned Authorised Representative of the assessee that the point at issue is covered in assessee's favour by virtue of the judgment of the Delhi High Court in the case of CIT vs. Bansal Credits Ltd. & Ors. (2003) 179 CTR (Del) 23 : (2003) 259 ITR 69 (Del) and the orders dt. 27th Feb., 2003 of the Tribunal in assessee's own case for 1985-86 assessment year in ITA No. 3866/Del/1998 and 16th Dec., 2003 for 1996-97 assessment year in ITA No. 603/Del/1998 wherein depreciation at the rate of 40 per cent had been allowed to the assessee. 4. The learned Departmental Representative confronted with the orders of the Tribunal and the decision of the jurisdictional High Court, on the other hand, contended that had the case been so simple, he would have fairly conceded that the point at issue is covered. However, the facts available on record are a little different. Referring to the assessment order, it was pointed out that the assessee filed its return declaring an income of Rs. 69,77,600 which was filed on 20th Nov., 1994. Referring to p. 2 of the assessment order, it was submitted that during the course of assessment proceedings, the assessee filed a lette....
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....69,77,600." 7. Referring to the impugned order, it was stated that the learned CIT(A) while disposing the appeal of the assessee without touching the specific reason given by the AO for negating the assessee's claim proceeded to dispose the appeal in a cursory manner relying upon the past history and the provisions of the Act. With regard to the specific observation that the claim was made by way of a letter and not by way of revising the return and that too after a lapse of over two years which was not in conformity with s. 139(5) of the Act has not been addressed by him. It was vehemently contended by him that no proper claim was filed by the assessee and in these circumstances, in the absence of a proper claim by way of a revised return, the AO cannot consider the issue of higher depreciation and the CIT(A) has not dealt with this aspect at all. Reliance was placed upon Beco Engineering Co. Ltd. vs. CIT (1998) 144 CTR (P&H) 529 : (1999) 236 ITR 344 (P&H) for the proposition that depreciation neither sought nor claimed by the assessee in these circumstances, the AO was not required to allow depreciation. Reliance was also placed upon CIT vs. Sree Senhavalli Textiles (P) Lt....
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....ason or basis for him not to consider higher depreciation. It was further stated that it was the duty of the AO to give the correct deduction. 10. Having heard the rival submissions and perused the material available on record, it is necessary first and foremost to refer to the paper book filed by the assessee. A perusal of the same shows that from pp. 1 to 8, the submissions made before the CIT(A) are appended which deal with the issue of allowing higher depreciation only. However, the specific reason given by the AO for disallowing the claim has not been referred to. The AO has specifically rejected the claim of the assessee made by way of a letter in the course of the assessment proceedings which contravened s. 139(5) of the IT Act. This fact has not been addressed by the assessee in the written submissions filed before the CIT(A). A perusal of pp. 9 to 10 which contain the order of the Tribunal for 1985-86 assessment year shows that the only issue considered by the Tribunal was the claim of higher depreciation. Page 11 is the assessment order for 2001-02 which again shows that the claim of higher depreciation was allowed by the AO. Similarly, p. 11A and B of the paper book c....
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....he claim of the assessee. From a perusal of the certificate appended by the assessee in its paper book, we are unable to state as to which document was placed before which authority. Without going into the technicalities of this, we would merely direct the learned CIT(A) to decide the appeal by way of a speaking order in accordance with law after giving the assessee an opportunity of being heard. 12. Before parting, we would like to state that as far as the issue pertaining to claim of higher depreciation is concerned, the matter is well-settled by the decision of the jurisdictional High Court in the case of Bansal Credits Ltd. (supra) inasmuch as in case an assessee has leased out its commercial vehicles and the lessee too has put these vehicles for use for the purpose of hiring, then, the claim of the assessee who continues to remain the owner of the assets for higher depreciation has to be allowed. However, on account of the peculiar facts and circumstances of the case, which need to be addressed, the issue for the reasons given hereinabove is restored with the above direction. The ground raised by the Revenue is allowed for statistical purposes. 13. In the result, the app....
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....s to how the facts in the year under consideration justify a higher depreciation has to be seen. The certificate of the assessee, does not in categorical terms state that the relevant documents were before the AO for establishing the user for higher depreciation and the grievance of the Revenue is also on the point that there was no material before AO and CIT(A) has not looked into this factual aspect. 4. The arguments advanced before the Bench by the learned Authorised Representative who stated that the issue is covered in his favour have been recorded in para 3 of the proposed order. The arguments of the Departmental Representative contending that the issue is not covered on account of certain peculiar facts have been brought out in paras 4, 5, 6, 7 and 8 of the proposed order. The rejoinder of the assessee has also been brought out in para 9 of the proposed order. 5. Thus, after recording the peculiar facts, circumstances, position of law, the issue has been restored to the file of the CIT(A) to address the specific reasons given by the AO for disallowing the claim of the assessee and for verification on facts, if necessary. The judgment of the Bombay High Court in the cas....
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....sidered the issue in depth and directed the AO to allow the claim of depreciation @ 40 per cent conforming to his decision taken in appeal in assessee's own case for the asst. yr. 1996-97. 3. The perusal of the impugned order as well as order of the AO reveals that the assessee's claim for deduction for 40 per cent of depreciation has eventually been considered on merits by the assessing authority and adjudicated by the learned CIT(A) also. The AO had rejected the assessee's claim of higher depreciation on the ground that assessee had not made such a claim in the return filed by it though the claim of depreciation was there and particulars were also available on record. The assessee thus is found to have corrected its claim of depreciation made in the original return. Such correction of claim will not tantamount to making a new claim particularly when the claim for depreciation had already been made in the return. Thus revision of return under s. 139(5) was not necessary. It has to be understood that there is a distinction between the revised return and correction of the return. If the assessee files some application for correcting a return already filed, or making a....
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....enue's appeal to it was concerned, the AAC was fully justified in entertaining the claim for deduction under s. 80J because the claim had been made by the assessee before the assessment was completed i.e., during the assessment proceedings." 5. In the light of findings reached and position enunciated hereinabove, I do not find any merit in the second ground raised by Revenue, as there is no infirmity in the decision of the learned CIT(A) in considering the issue on merits as the AO himself had taken the decision on merit. Since there was no ground on validity of claim, the learned CIT(A) was not bound to address thereon, while adjudicating the issue in appeal before him though the claim made was valid in law. Furthermore, as that issue does not arise from the order of learned CIT(A) the second ground of Revenue in appeal is liable to be dismissed on that count also. However, the learned CIT(A) followed the decision in assessee's own case for the asst. yr. 1996-97 rendered by his predecessor for allowing higher depreciation. This decision of learned CIT(A) came up for consideration of the Tribunal which has been set aside and restored to the file of the AO to verify actua....
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....to 40 per cent. It was explained that the trucks were run on hire and according to the depreciation table, the admissible rate of depreciation was 40 per cent. It was stated that the claim @ 20 per cent made in the return was due to inadvertence and that the same was being revised to 40 per cent. The claim of depreciation was accordingly revised to Rs. 13,43,748 as against Rs. 10,28,368 claimed originally. The AO observed that the revised claim can be made only under a revised return filed under s. 139(5) of the IT Act and the mere filing of a letter, which was beyond the time limit prescribed by s. 139(5) for filing the revised return cannot be entertained. He accordingly treated the letter as non est. Nevertheless, he examined the merits of the assessee's revised claim of depreciation and observed that it was not allowable, following the judgments of the Rajasthan High Court in CIT vs. Manjeet Stone Co. (1991) 91 CTR (Raj) 239 : (1991) 190 ITR 183 (Raj) and CIT vs. Sardar Stones (1995) 125 CTR (Raj) 197 : (1995) 215 ITR 350 (Raj). He also referred to the Board's Circular No. 652, dt. 14th June, 1993 wherein it was observed that the higher rate of depreciation @ 40 per cen....
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....cate the issue afresh in the light of the judgment of the Hon'ble Delhi High Court cited above. Accordingly, he restored the matter to the AO with the same directions. 4. The questions formulating the points of difference are as under : (a) By Hon'ble AM : "Under the facts and findings whether there is any justification to restore the matter to learned CIT(A) for addressing on maintainability of claim of higher depreciation with reference to provisions of s. 139(5) of the Act or that the Tribunal is bound to answer the question when it is raised before it and the decision taken thereon is justified ?" (b) By Hon'ble JM : "Whether a finding of fact can be given in a dissent order where the specific issue, raised in the Departmental appeal of return filed beyond the time limit laid down under s. 139(5) has not been argued by the assessee before the Tribunal; or should the issue be restored to the CIT(A) for considering the finding of facts brought out in the assessment order, as has been done in the leading order ?" I have carefully considered the questions, the orders of the IT authorities and the rival contentions. The precise d....