1990 (11) TMI 210

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....owed to it by the ITO vide the original assessment order dated 15-3-1983. 3. However, later on, the ITO vide his notice dated 21-1-1986 addressed to the assessee, proposed to reduce the depreciation to 10% and for this purpose he had enclosed with that notice a revised depreciation chart. It appears that the assessee had, vide its identical letters dated 11-2-1986, written to the ITO as follows :--- " Dear Sir, With reference to your letter dated 4-2-1986 along with re-casted depreciation chart, we have to state that we have no objection in respect of recasted depreciation allowance and further income tax may kindly be recomputed after considering recasted depreciation allowance. Thanking you, Yours faithfully, For Hanuman Tube Well C....

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....TO under section 154. On the other hand on behalf of the assessee reliance was placed on the following decisions: (i) M.D. Narayan v. Agri. ITO [1974] 95 ITR 452 (Mys.) (ii) CIT v. Vac Met Corpn. (P.) Ltd. [1981] 127 ITR 676 (Guj.) (iii) Addl. CIT v. Distillers Trading Corpn. Ltd. [1982] 137 ITR 894 (Delhi). Shri S.L. Jain, the learned counsel for the assessee submitted that the depreciation once allowed could not be withdrawn. He also submitted that in terms of entry D(7) of Old Appendix-I Part-I of the Depreciation Table though the assessee was entitled to depreciation @ 30% on these machines and no extra shift allowance was allowable, by mistake the assessee claimed depreciation only at the general rate of 10% and 10% as extra shift ....

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.... (N.E.S.A.) " The assessee is neither a Mineral Oil concern nor a Mines and quarries concern, its business being of boring tube-wells and hand pumps. In the absence of any other specific entry dealing with these two machines, we have therefore to fall back on the general rate of 10% under item I(1) under which the normal depreciation allowable for the assessment years in question was 10%. We also find that there was no restriction on the admissibility of the allowances of extra shift allowance with reference to this general entry. In terms of section 32(1)(iia) the extra shift allowance admissible was a further sum equal to one-half of the admissible amount of depreciation. In other words, if extra shift allowance was to be allowed to the ....