1993 (11) TMI 23

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....wo applications under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") arising out of a common order passed by the Income-tax Appellate Tribunal. These applications have been made at the instance of the Revenue and pertain to the assessment years 1987-88 and 1988-89. In these applications, the following common question has been proposed : "Whether, on the facts ....

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....the assessment year 1987-88. The assessee took the matter in appeal before the Commissioner of Income-tax (Appeals) for both these years. The Commissioner upheld the rate of ten per cent. but directed that the assessee was entitled to the relief in respect of the depreciation that it had claimed. Against the appellate order, cross-appeals were filed before the Income-tax Appellate Tribunal. The ap....

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....This was not upheld by the appellate authorities including the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal relied upon a circular of the Central Board of Direct Taxes No. 29D(xix) of 1965, F. No. 45/239/65-ITC, dated March 31, 1965. Under this circular, the Board had issued instructions that where income is proposed to be computed by applying a net rate and the assessee has fu....

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....e admissible depreciation. We may also observe that the Income-tax Appellate Tribunal in determining the question about the rate to be applied had judged the same with reference to the past history of the assessee's case and found that nine per cent. flat rate should be the reasonable rate. Admittedly, in the past, nine per cent. was being applied without taking into account the claim for deprecia....