- (1.) THE present appeal, under Section 260A of the Income -tax Act, 1961 (hereafter referred to as 'the Act'), has been admitted vide order dated October 16, 2006, on the following substantial questions of law said to be arising out of the order of the Income -tax Appellate Tribunal dated March 22, 1999: 1. Whether on the facts and in the circumstances of the case the Income -tax Appellate Tribunal was justified in deleting the interest of Rs. 15,41,888 charged under Section 216 of the Income -tax Act, 1961 without appreciating the fact that the advance tax estimate filed by the assessee were grossly incorrect and did not reflect true and correct income of the assessee ?
(2.) WHETHER on the facts and in the circumstances of the case, the Income -tax Appellate Tribunal was justified in law in admitting the claim of the assessee for depreciation in higher rate relying upon the assessee's explanation that machinery comes into contact with corrosive chemicals without appreciating the fact that only corrosive ingredient coming into contact with machinery is sulphur dioxide but its percentage is well within tolerable limits ? 2. The appeal relates to the assessment year 1978 -79. Briefly stated the facts giving rise to the present appeal are as follows:
(3.) THE respondent -assessee had filed the estimate of income on June 14, 1977 declaring income of Rs. 561.07 lakhs which was reduced on September 15, 1977, to Rs. 352.91 lakhs. However, on December 15, 1977, the assessee filed the estimate of income declaring income of Rs. 529.15 lakhs for the said assessment year. The assessment was made on total sum of Rs. 798.25 lakhs on which interest under Section 216 of the Act was also charged. The assessment has been modified in appeal. The matter was taken up before the Tribunal. The Tribunal has deleted the levy of interest under Section 216 on the ground that penalty under Section 273 of the Act has been deleted by the Tribunal on similar facts. The other issue involved in the present appeal is regarding higher rate of depreciation on the ground that the machinery installed by the assessee comes into contact with corrosive chemicals. The Tribunal has accepted the plea of the assessee.;