TaxTMI 
TaxTMI 
2000 (12) TMI 17
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.... basis of the income-tax records and debited to the profit and loss account would not be violative of the provisions of the Companies Act, when the same were not in accordance with Parts II and III of Schedule IV to the Companies Act, 1956?" The controversy has arisen in view of the applicability of section 115J of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The assessee calculated the depreciation on the plant and machinery at 33.33 per cent. as permissible under the Income-tax Rules, 1962, as against 30 per cent. depreciation required to be calculated under Schedule XIV to the Companies Act, 1956. The comparative rates of depreciation on the factory building, plant and machinery, furniture, fitting and office equipme....
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....ter was discussed and the following resolution was passed. Resolved that the rates of depreciation be provided as per the Income-tax Rules, 1962, being marginally higher than the rates specified under Schedule XIV to the Companies Act, 1956. Further resolved that depreciation be charged in the books of account to determine the profits/loss at the rates provided in the Income-tax Rules, 1962, though slightly higher and be provided for full year irrespective of use in view of the use of highly corrosive chemicals and dyes." The Assessing Officer allowed depreciation on the basis claimed by the company, but the Commissioner of Income-tax exercised powers under section 263 of the Act and held that the rate of depreciation claimed under the I....
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....mitted that by claiming such depreciation at the higher rate, the assessee has claimed excess depreciation to the tune of Rs.19,63,023. Mr. J.P. Shah, learned counsel for the assessee, has drawn our attention to the relevant record including the resolution passed by the board of directors whereby the assessee had claimed higher rate of depreciation at 33.33 per cent. as permissible under the Income-tax Rules as against 30 per cent. rate prescribed under the Companies Act. For this marginally higher rate, the assessee has given a justification that in view of the nature of use of plant and machinery which is exposed to various chemicals and dyes of highly corrosive nature like caustic soda, soda ash which eat away the main body of the machi....