1990 (11) TMI 112

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....was valid in law despite the fact that the Income-tax Officer had altered the depreciation allowance in the assessment order after the approval under section 144(B) of the Act given by the Inspecting assistant Commissioner ?" Before we proceed to give our answer to the question, the facts may be stated briefly and they are as follows : For the assessment year 1973-74, the assessee, Messrs. Manipal Industries Ltd., Manipal, in its return claimed depreciation on machinery at Rs. 2,69,672. The assessing authority did not accept the return as filed. He, therefore, assessed the assessee-petitioner under sub-section (3) of section 143 of the Act. In that behalf, following the procedure prescribed under section 144B of the Act, he sent a pro....

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....ts order dated September 30, 1980, partly allowed the appeal, but, in so far as the appeal related to the reduction of depreciation claimed, the Tribunal, after noting the contention, had this to say, "in the draft order, depreciation was taken as claimed at Rs. 2,69,672. The Income-tax Officer has stated that this was accepted provisionally". In the final order the depreciation worked out was Rs. 2,13,445, We find that, even when the draft order was sent, the depreciation was provisionally worked out and, in the circumstances , there is no merit in the contention either. In that circumstance, to the extent the assessee-appellant failed before the Tribunal, he sought a reference of this question which was, in the first instance, rejected. T....

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....ance of the variation, the Income-tax Officer shall complete the assessment on the basis of the draft order. (4) If any objections are received, the Income-tax Officer shall forward the draft order together with the objections to the Inspecting Assistant Commissioner and the Inspecting Assistant Commissioner shall, after considering the draft order and the objections and after going through (wherever necessary) the records relating to the draft order, issue, in respect of the matters covered by the objections, such directions as he thinks fit for the guidance of the Income-tax Officer to enable him to complete the assessment : Provided that no directions which are prejudicial to the assessee shall be issued under this sub-section befo....