1996 (3) TMI 16

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....NIKKACHALAM J.---At the instance of the Department, the Tribunal referred the following question for the opinion of this court under section 256(1) of the Income-tax Act, 1961 : "Whether the amount of depreciation allowed to the assessee on cars maintained by it and which has been used if not wholly at least partly for the personal purposes of the directors, can be taken into consideration for ....

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.... adjudged as excessive or unreasonable. The Tribunal found that depreciation which is allowable at a prescribed rate is an allowance which can never come for adjudication as excessive or unreasonable and, therefore, the deduction for depreciation had to be given without any disallowance under section 40(c) even if the cars had been used for personal purposes of the directors. Before us, learned....

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....ing of the order passed by the Tribunal would go to show that the Tribunal had not given a definite finding as to whether allowance of depreciation is also subject to section 40(c) of the Act. Hence, a request was made to direct the Tribunal to give a definite finding on this issue. We have heard learned standing counsel as well as learned counsel appearing for the assessee. The fact remains....

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.... deduction for depreciation had to be given without any disallowance under section 40(c) even if the cars had been used for personal purposes of the directors. In view of the abovesaid decision of the Supreme Court C. W. S. (India) Ltd. v. CIT [1994] 208 ITR 649, this finding given by the Tribunal is not correct. Section 40(c)(ii) includes both expenditure as well as allowance in respect of any....