COMMISSIONER OF INCOME TAX Vs. KERALA ELECTRIC LAMP WORKS LTD
HIGH COURT OF KERALA
COMMISSIONER OF INCOME TAX
Kerala Electric Lamp Works Ltd
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P.R.RAMAN, J. -
(1.) THESE two references are at the instance of the Revenue. The following question is referred for the decision of this court :
'Whether, on the facts and in the circumstances of the case and when the assessee did not make a claim or a request for allowance of depreciation, whether the Assessing Officer would be justified in allowing the deduction ?'
(2.) IN Income -tax Reference No. 21 of 1999, for the year 1989 -90, the assessee filed a return showing a loss of Rs. 9,30,59,275. In computing the loss, the Assessing Officer held that whether the assessee had claimed it or not depreciation was to be allowed as per the provisions of the Income -tax Act and accordingly, he computed the depreciation allowance at Rs. 2,02,79,334 and carried forward the same to be set off against the income of the subsequent years/This was confirmed by the Commissioner (Appeals). In further appeal, the Tribunal held that the Assessing Officer was not justified in allowing deduction by way of depreciation when the assessee had not made a claim. In para. 4 of the order of the Tribunal it was noticed that after the amendment of Section 34(1) by the Taxation laws (Amendment and Miscellaneous Provisions) Act, 1986, with effect from April 1, 1986, it was not necessary for the assessee to furnish the prescribed particulars for claiming depreciation but still there was another implicit condition to be satisfied and that condition was that the assessee should have asked for it. The Tribunal also relied on the decision of the Bombay High Court in CIT v. Shri Someshwar Sahakari Sakhar Karkhana Ltd. : 177ITR443(Bom) . A similar view was also expressed by the Central Board of Direct Taxes in Circular dated August 31, 1965. The Commissioner of Income -tax, however, sought a reference of the question relying on the decision reported in Dasaprakash Bottling Co. v. CIT : 122ITR9(Mad) and Ascharajlal Ram Parkash v. CIT : 90ITR477(All) .
Income -tax Reference No. 216 of 1999 relates to the assessment year 1990 -91. There, the assessee filed the return of income showing a loss of Rs. 3,33,77,642. The assessee did not claim any allowance of depreciation. However, the Assessing Officer held that the depreciation was to be allowed irrespective of whether the assessee claimed it or not and accordingly, computed the allowance at Rs. 1,65,95,460 and carried forward the same to be set off against the income of the subsequent years. This view of the Assessing Officer was confirmed by the Commissioner of Income -tax (Appeals). In further appeal by the assessee, the Tribunal found that a similar claim for earlier assessment years has been allowed by the Tribunal. The Tribunal took the view that when the assessee did not make a claim or a request for depreciation, there is no justification in allowing the deduction by the Assessing Officer. Reliance was placed on the decision in CIT v. Shri Someshwar Sahakari Sakhar Karkhana Ltd. : 177ITR443(Bom) and CIT v. Andhra Cotton Mills Ltd. : 228ITR30(AP) .
(3.) SINCE the question raised in both these cases is one and the same and since the assessee is also the same, except that the Income -tax Reference No. 216 of 1999 the successor -in -interest of the Kerala Electrical Lamp Works Ltd., namely, Crompton Greaves, had filed the appeal before the Tribunal. We dispose of these two income -tax references by this common judgment.;
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