TaxTMI 
TaxTMI 
2010 (4) TMI 1075
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....or the Assessment Year 20012002 and subsequently for the Assessment year 2002-2003, 2003-04, 2004-05 and 2005-06. 3. The Ld. C.I.T. (A) has erred in law and in the facts and circumstances of the case in upholding the action of the A-Q, applying ratio of the Bombay High Court judgment in the case of Indian Rayon Corporation Limited vs. C.I.T. 261 ITR 98 despite the fact that the ratio of the said judgment is limited to peculiar facts of that case and is not applicable on the facts of the appellant. 4. The Ld. C.I.T. (A) ought to have appreciated and followed the orders of the Bombay Tribunal in the case of Plastiblends India Ltd. I.T.A. No. 4542/Mum/99 Assessment Year 1996-97 and Kabra Extrusion Technik Ltd. I.T.A. No. 1517/Mum/99 assessment year 1995-96 -wherein Bombay Tribunal had considered the scope and applicability of the aforesaid Bombay High Court Judgement in the case of Indian Rayon Corporation Limited vs. C.I.T, 261 ITR 98. 5. The Ld. C.I.T. (A) has erred in the facts and circumstances of the case, whilst upholding the order of the A.0. with regard to the claim of depreciation, in not appreciation that the appellant had claimed depreciation firs....
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....acts, in brief, as per relevant orders are that the return declaring an income of Rs. 6,61,75,593/- filed on 28-10-2005 by the assessee, after being processed on 28-02-2006 u/s 143(1) of the Income-tax Act, 1961 [hereinafter referred to as the "Act"] was taken up for scrutiny with the issue of notice u/s 143(2) of the Act on 02 05-2006. During the course of assessment proceedings, the AO noticed that the assessee claimed deduction u/s 80IB of the Act at the rate of 30% of the eligible profits. Since the manufacturing activity in the industrial undertaking was started by the assessee in the period relevant to AY 1996-97, this was 10th year of claim of the said deduction. The AO noticed during the course of assessment proceedings that the assessee did not claim depreciation until the AY 2000-01. However, in the AYs 2001-02 to 2004-05, depreciation was allowed to the assessee taking into consideration the opening WDV of assets right from the beginning i.e. AY 1996-97. On that basis, depreciation in the year under consideration worked out to Rs. 1,36,23,238/- as against Rs. 1,46,57,811/- claimed by the assessee. Accordingly, relying upon the decision of the Hon'ble Supreme Court in....
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....used the orders of the lower authorities and the material available on record. In the instant case, it is not in dispute that the assessee neither has claimed nor was allowed depreciation in respect of fixed assets used in its industrial unit. During the year under consideration, for allowing depreciation, the assessing officer deducted the value of the depreciation which ought to have been claimed by the assessee in earlier years and which ought to have been allowed to the assessee by the Department in the earlier years. Thus, the dispute before us raised on determining of the written down value of the year under consideration with reference to which depreciation u/s 32 of the Act is to be calculated. We find that the written down value has been defined in section 43(6) of the Act which reads as under:- 6) "written down value" means- (a) in the case of assets acquired in the previous year, the actual cost to the assessee; (b) in the case of assets acquired before the previous year the actual cost to the assesses less all depreciation actually allowed to him under this Act, or under the Indian Income-tax Act, 1922 (11 of 1922), or any Act repealed by that....
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....lock of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item Explanation 1.-When in a case of succession in business or profession, an assessment is made on the successor under subsection (2) of section 170 the written down value of any asset or any block of assets] shall be the amount which would have been taken as its written down value if the assessment had been made directly on the person succeeded to. Explanation 2.- Where in any previous year, any block of assets is transferred, - (a) by a holding company to its subsidiary company or by a subsidiary company to its holding company and, the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied; or (b) by the amalgamating company to the amalgamated company in a scheme of amalgamation, and the amalgamated company is an Indian company, then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the transferee-company or the amalgamated company-, as the case may be,-shall be the written down value of the block of assets as in the ca....
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.... record any material before us to show that though the depreciation was not claimed by the assessee but in fact such depreciation was allowed by the Department as deduction to the assessee in the assessment made in respect of the income of the assessee. In our considered opinion, it is not open to the Revenue to deduct any amount from the cost of the asset to determine the WDV on the ground that such amount should have been claimed by the assessee as depreciation in earlier year. In our considered view, WDV can be ascertained only by reducing the actual depreciation allowed to the assessee in an assessment and not the amount which ought to have been allowed to the assessee. It is the actual depreciation allowed to the assessee which only can be reduced for ascertaining the WDV and not the amount which is notionally allowed to the assessee. Thus, in the absence of any material Drought before us to show that any remedial measure was taken by the Revenue in the earlier assessment years to actually allow the depreciation to the assessee in the year in which the assessee has himself not claimed such depreciation, in our considered view, the notional amount cannot be reduced to ascertain....