2000 (12) TMI 214

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....tion was withdrawn. The AO completed the assessment under s. 143(3) on 17th March, 1997, wherein he has accepted the claim of the assessee regarding withdrawal of depreciation on the basis of revised return. Subsequently the learned CIT found that order of the AO is erroneous and prejudicial to the interest of the Revenue. He, therefore, invoked the provisions of s. 263 and after giving opportunity of hearing to the assessee and considering its reply concluded that the AO acted upon the revised return of questionable validity and wrongly allowed the withdrawal of claim of depreciation. Further, on two other issues, he directed the AO to verify the claim and allow the amount admissible as per law. 3. Aggrieved by the order of learned CIT, t....

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.... to forgo it. It is urged by him that in case the assessee does not make a claim for depreciation, it cannot be forced upon the assessee. In support of this, reliance can be placed on the decision of this Tribunal order dt. 6th March, 2000, in the case of Sun Pharmaceutical Industries vs. Dy. CIT(A) in ITA Nos. 2355/A/98, 1261 & 1190/A/89 for the asst. yrs. 1995-96 and 1996-97 and decision of Indore Bench of Tribunal dt. 15th July, 1993, in the case of Beta Naphthol (P) Ltd. vs. Dy. CIT in ITA No. 1000/A/92 for the asst. yr. 1989-90. 5. On the other hand, Shri Pirthilal appeared for the Revenue supported the order of learned CIT under s. 263 whereby he concluded that AO acted upon the revised return of questionable validity and wrongly all....

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....pect of any previous year relevant to the assessment year commencing on or after the 1st of April, 1988. As per this provision even in respect of assessment year commencing on or after 1st of April, 1989, w.d.v. is to be computed by deducting the depreciation actually allowed and not 'less old depreciation allowable". Therefore, depreciation which is not claimed cannot be made to reflect in w.d.v. of the block of assets. If the idea behind the provision was to provide for compulsory deduction for depreciation then w.d.v. of "block of assets" in newly inserted s. 43(6)(c)(iii) by the Taxation Laws (Amendment and Miscellaneous Provision) Act, 1986, w.e.f. 1st April, 1988, would have been defined so as to mean, the w.d.v. of the block of asset....

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....t taxpayer has option to claim or not to claim depreciation. In the said judgment it was pointed out that the Board itself had taken the view that furnishing of requisite particulars is a precondition for the allowance. If the assessee could forgo the depreciation by not furnishing the particulars, there was no reason why it should not be treated as a matter of option. The significance of the words "actually allowed" in law would expect a positive allowance with reference to the actual cost incurred by the assessee. After detailed consideration of various decisions and the precedents on the subject involving different facts as in cases, where depreciation was not claimed at all or depreciation was claimed but sought to be withdrawn by a rev....