Tarun Agarwala, J. - (1.) We have heard Sri Shubham Agrawal, the learned counsel for the appellant and Sri Rupesh Jain along with Sri R.S. Agrawal for the assessee.
(2.) The assessee is a public limited company engaged in the manufacture of synthetic yarn and cement. For the assessment year 1988-89, the assessee filed a return declaring a loss. The return was not accepted and the Assessing Officer passed an assessment order under Section 143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act) after making certain additions and disallowances under various heads. Being aggrieved, the assessee filed an appeal, which was partly allowed. The matter was taken to the Tribunal. The Tribunal allowed the appeal against which the Department has filed the present appeal.
(3.) The assessee claimed depreciation after reevaluating its fixed assets. The Assessing Officer found that as per Section 115J of the Act, net profit shown in the profit & loss account was in accordance with the provisions of part II and III of Schedule VI to the Companies Act, 1956. The Assessing Officer however, was of the opinion that the method of computation of profit & loss was not in consonance with the provisions of Section 350 of the Companies Act, and, consequently, disallowed the excess depreciation and added that amount in the profit & loss account. The assessee's appeal against this part was rejected by the appellate authority but was accepted by the first Tribunal relying upon the decision of the Supreme Court in the case of Apollo Tyres Ltd. v. Commissioner of Income-Tax, (2002) 255 ITR 273 (SC). The Tribunal held as under: "We have considered the rival submission and the decisions relied upon by the ld. A.R. Since the Revenue has not brought to our notice any other decision contrary to the decisions relied upon by the led. Counsel, we decide this issue in assessee's favour as covered by the decision of the Hon'ble Supreme Court in the case of Apollo Tyres Ltd. (supra). This ground of the assessee is allowed.";