TaxTMI 
TaxTMI 
2015 (2) TMI 680
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....lved in all the above tax case (appeals) are one and the same, common order is passed in the above matters. 3. The brief facts common to all the above tax case (appeals) are as follows : The respondent-assessee in each of the cases, which are companies, have installed wind electric generator and claimed depreciation at the rate prescribed under rule 5(1) Appendix I of the Income-tax Rules. The Assess ing Officer was of the view that the assessee in each of the cases should exercise their option in terms of the second proviso to rule 5(1A) prior to the filing of the return, which they failed to do and, therefore, they would not be entitled to depreciation in terms of rule 5(1) Appendix I, but only under rule 5(1A) Appendix IA of the Income-tax Rules. Rule 5(1A) second proviso reads as follows : "Provided further that the undertaking specified in clause (i) of sub-section (1) of section 32 of the Act may, instead of the depreci ation specified in Appendix IA, at its option, be allowed depreciation under sub-rule (1) read with Appendix I, if such option is....
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...., provided such option has to be exercised before the due date for furnishing the return of income under section 139(1) of the Income-tax Act. He further submits that the rule prescribes that the assessee should have to exercise their option before furnishing the return of income. Since the assessees did not exercise their option before furnishing the return of income, they are not eligible to claim depreciation as per rule 5(1) Appendix I and they are eligible to claim only under rule 5(1A) Appendix IA. He submits that when the statute prescribes that the assessee has to exercise their option "before" the due date, it means, "only before and not the due date or after the due date". Hence, when the intentment is clear in the provision, it should not be brushed aside to confer benefits. The learned counsel appearing for the Revenue pleaded that the Tribunal is not correct in granting the benefit to the assessees ignoring the language of the second proviso to rule 5(1A) of the Income-tax Rules. 9. Per contra, learned counsels appearing for the assessees submitted that the return of income filed on the due date of filing of returns of income as per section 139(1) of the Income-tax ....
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....preciation, which reads as follows : "32. Depreciation.-(1) In respect of depreciation of buildings, machinery, plant or furniture owned wholly or partly by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed- (i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed ; (ii) in the case of any block of assets, such percentage on the writ ten down value thereof as may be prescribed." 14. Rule 5 of the Income-tax Rules deals with depreciation, which read as follows : "5. Depreciation.-(1) Subject to the provisions of sub-rule (2), the allowance under clause (ii) of sub-section (1) of section 32 in respect of depreciation of any block of assets shall be calculated at the per centages specified in the second column of the Table in Appendix I to these rules on the written down value of....
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....he previous year 5 Consideration or other realization during the pre-vious year out of 3 or 4 6 Amount on which depreciation at full rate to be allowed (3 + 4 5) (enter 0, if result is negative) 7 Additions for a period of less than 180 days in the previous year 8 Consideration or other realizations during the year out of 7 9 Amount on which depreciation at half rate to be allowed (7-8) (enter 0, if result is negative) 10 Depreciation on 6 at full rate 11 Depreciation on 9 at half rate 12 Additional depreciation, if any, on 4 13 Additional depreciation, if any, on 7 ....
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.... of section 139 of the Income-tax Act. According to the Revenue, each one of the assessees should file a separate application or a letter indicating their intention to avail of depreciation in terms of section 32 read with rule 5(1) of the Income-tax Rules and since the assessee in each case has not exercised such an option before the due date for furnishing the return of income, they will not be entitled to the benefit of rule 5(1) Appendix I but depreciation only under rule 5(1A) Appendix 1A. 17. It is relevant to note that while filing the return of income, a procedure has been prescribed for claiming depreciation as pointed out above. The assessee has to set out the manner in which depreciation is claimed for the assessment years in question. All the details required for claiming depreciation under various heads are set out thereunder. Rule 5 of the Income-tax Rules is in relation to determination of profits and gains of business or profession and depreciation forms part of such determination. Therefore, there cannot be an option exercised in isolation (i.e.) depreciation with regard to determination of profits and gains of business or profession in the manner other than the....
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....cember 31, 1975, the last day for making the declaration, it could have clearly said so in the proviso. The very fact that the date January 1, 1976, is in terms mentioned indicates that the time limit was up to that date. That in a given case the word 'before' in the con text of the time can be construed as 'not after' is well settled (R v. Arkwright [1848] 12 QB 960). This court in the case of Premchand Nathmal Kothari v. Kisanlal Bachharaj Vyas, AIR 1976 Bom 82, had read the word 'before' in section 3 of the Maharashtra (Vidarbha Region) Agricultural Debtors' Relief Act, 1969, as 'up to'." 19. The Tribunal in the case of K. K. S. K. Leather Processors (P.) Ltd. v. ITO (I. T. A. Nos. 826 and 827 of 2009, dated November 20, 2009 [2011] 9 ITR (Trib) 758 (Chennai) (subject matter of appeal in T. C. (A.) Nos. 1011 and 1012 of 2010) following the decision of the Bombay High Court reported in CIT v. Vijaya Hirasa Kalamkar (HUF) [1998] 229 ITR 772 (Bom)), held as follows (page 771 of 9 ITR-Trib) : "From the abovementioned decisions, it is clear that the word 'before' would have to be construed as up to or not after. The hon'ble Bombay....