1982 (7) TMI 15

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.... allowable as repairs and renewals in the respective assessment years in the past but capitalised by the assessee for the purpose of allowance of depreciation ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the written down value for an asset for which no rate of depreciation has been prescribed prior to the assessment year 1970-71 and for which 100% depreciation is allowable from the assessment year 1970-71 onwards is the actual cost of the asset after deduction of the depreciation actually allowed ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that for the purpose of finding out the written down value t....

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....wed in the earlier years and if no depreciation is found to have been given in the earlier years in relation to the assets set out above the assessee should be given full depreciation at 100% as per the above rule on the actual cost of the assets to the assessee. Aggrieved by the decision of the Tribunal, the Revenue has obtained a reference to this court on the three questions set out above. The learned counsel for the Revenue contends that normally the cost of repairs and replacements each year would have been allowed as revenue expenditure and in this case the assessee not having claimed those expenditures as revenue expenditure, those expenditure would have been capitalised so as to increase the value of the assets and, though the ru....

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....pect of all salt works, salt pans, reservoirs and condensers, etc., which might have been acquired in the earlier years, but put in use in the previous year. The Tribunal then referred to the conditions to be satisfied for claiming depreciation u/s. 32 of the I.T. Act and held that the assessee has made out his entitlement to claim depreciation at 100%. Thus, the main point which came for consideration before us is whether the depreciation at 100% is allowable under the rules as amended in respect of the assets acquired long before the previous year but used in the previous year. The ITO and the AAC proceeded on the basis that, since the assets in this case had been acquired long before the previous year, the benefit of 100% depreciation....