- (1.) I.C. Sudhir, J.M. The revenue has impugned the order, dt. 27-2-1996, of the Commissioner (Appeals), Bangalore, mainly on the ground that the Commissioner (Appeals) has erred in cancelling the order of the assessing officer, rejecting the application under section 154 of the Act of the assessee for rectification without appreciating the material fact that 100 per cent depreciation is admissible only on plant and machinery whose cost does not exceed Rs. 5,000.
(2.) Sri K. Ramesh, the learned Departmental Representative, submits that the Commissioner (Appeals) while allowing the first appeal has not given reason as to how the action of the assessing officer in rejecting the application for rectification under section 154 of the Act was not tenable under the law. Sri. G. Lakshminarashimhan, the learned authorised representative, on the contrary submits that the respondent- assessee is an investment and financial institution which had invested huge amount in furniture for the purpose of leasing out those items; this material fact could have been verified during scrutiny under section 143(2) by examining the memorandum and articles of association and other documents., and no investigation can be made during the proceedings under section 143(1)(a) of the Act. He draws our attention to the Circular No. 689, dt. 24-8-1994 (See (1994) 120 CTR (St) 311 of the CBDT in support. He submits further that the assessee-company was very much entitled for 100 per cent depreciation in respect of plant and machinery whose value was less than Rs. 5,000. His further submission is that even if there was no proof in support of the claim of depreciation accompanying the return, the proper course of action on the part of the assessing officer was to invoke the provisions of section 143(2) of the Act instead of making assessment under section 143(1)(a) of the Act defying the principles of natural justice. The learned authorised representative refers the following decisions in support : (i) Acme Fabrik Plast Co. v. ITO & Ors. (1997) 225 ITR 826 (MP); (ii) Kha ta u Junkar L td. & Anr. v. K. S. Pathania & Anr. (1992) 196 ITR 55 (Bom); (iii) S.R.F. Charitable Trust v. Union of India & Ors. (1992) 193 ITR 95 (Del); and (iv) Delhi Auto & General Finance (P) Ltd. v. Dy. CIT (1994) 50 ITD 626 (Del-Trib).
(3.) WE have considered the arguments advanced by the parties, materials available on the record and have gone through the order impugned as well as the judgments cited by the learned authorised representative.;