TaxTMI 
TaxTMI 
2002 (9) TMI 856
X X X X Extracts X X X X
X X X X Extracts X X X X
....from profit and gains of business, and not income from 'other sources' as held by the AO. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that it is the net interest which is to be deducted to arrive at the 'profits of the business' though the Explanation cl. (baa) to s. 80HHC provides reduction of 90 per cent of receipt. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the AO to compute business incomes without allowing the depreciation which has not been actually claimed by the assessee, disregarding the provisions of s. 32 of the Act." 3. I have heard the rival submissions. Both the parties agree....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ertainly for the benefit of the assessee. If it does not wish to avail that benefit for some reason, benefit cannot be forced upon him. It is for the assessee to see if the claim of depreciation is to his advantage. Rather the ITO should advise him not to claim depreciation if that course is beneficial to the assessee. Further, at p. 80, Hon'ble Supreme Court has observed : "It is rightly said that a privilege cannot be to a disadvantage and an option cannot become an obligation". 7. Finance Act, 2001, w.e.f. 1st April, 2002 inserted Expln. 5 to s. 32, this reads as under : "Explanation 5 : For the removal of doubts, it is hereby declared that the provisions of this sub-section shall apply whether or not the assessee has cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nstrued when the pre-amended provision was clear and unamiguous. 10. To find out the intent of the legislature, it would be beneficial to make recourse to the Memorandum Explaining Provisions in the Finance Bill, 2001. [(2001) 166 CTR (St) 145 : (2001) 248 ITR (St) 193]. This reads as under : "Modification of provisions relating to allowance of depreciation : Under the existing provisions of sub-s. (2) of s. 32 of the IT Act, carry forward and set off of unabsorbed depreciation is allowed for assessment years. With a view to enable the assessees to conserve sufficient funds to replace capital assets specially in an era where obsolescence takes place so often, the Bill proposes to dispense with the restriction o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claimed by the assessee. These amendments will take effect from 1st April, 2002, and will, accordingly, apply in relation to the asst. yr. 2002-2003 and subsequent years." 12. In the case of Ram Nath Jindal vs. Dy. CIT (2001) 170 CTR (P&H) 251 : (2001) 252 ITR 590 (P&H) at p. 593, Punjab & Haryana High Court held as under: "Thus, it is clear that the AO cannot grant the benefit of depreciation when it has not been claimed by the assessee. This position is further obvious from the fact that in the Finance Act, 2001, Expln. 5 has been inserted in s. 32(1)(ii) with effect from 1st April, 2002. It has been, inter alia, provided that the provision shall apply "whether or not the assessee has claimed the deduction in respect....