Kalyan Jyoti Sengupta J. - (1.) By this writ application the petitioner challenged the impugned notice dated May 15, 2002, in relation to the assessment year 1994-95 under the Income-tax Act, 1961, (hereinafter referred to as "the said Act"), and also proceedings, notices and orders thereunder, issued by the Assistant Commissioner of Income-tax, Circle-V, Calcutta (hereinafter referred to as "the Assessing Officer"), asking the writ petitioner to show cause as to why depreciation claimed to the extent of Rs. 19,16,50,036 and also the amount of expenditure incurred for travel tour of the managing director should not be disallowed, as it does not fall within Explanation 3 to Section 43 of the said Act. The short facts, which have led to the filing of this application, are stated hereunder.
(2.) The first petitioner during the financial year of 1994-95 purchased numerous electric meters on different dates from the Gujarat Electricity Board (hereinafter referred to in short as "the Electricity Board") at a total cost of Rs. 35,10,10,450.63 without taking physical delivery of the same. The first writ petitioner thereafter by two separate lease agreements let the same on hire to the said seller (Electricity Board) for a period of 5 years at a total rent of Rs. 47.54 crores. While filing the returns for the assessment year 1994-95, the petitioner claimed depreciation on the meters of purchase price of Rs. 35,10,10,450.62. On May 19, 1997, regular assessment order under Section 143(3) of the said Act was made. The Assessing Officer disallowed the claim of depreciation and further refused to accept the rental income for taxing, rather observed notional income by way of interest on the said sum of Rs. 35,10,10,450.60. The amount of income was calculated at Rs. 4,39,31,807. Petitioner No. 1 preferred appeal against this order before the Commissioner of Income-tax (Appeals). In the appeal the Commissioner of Income-tax (Appeals) called for the report of the Assessing Officer by an order. The appellate authority, thereafter, making various inquiries and considering the remand report made by the Assessing Officer allowed the petitioner's appeal partly and held, inter alia, that the depreciation was allowable on Rs. 11,38,27,600 which was the book value of the meters in the books of the said Electricity Board as per the remand report. The petitioner not being satisfied with the partial relief granted by the Commissioner of Income-tax (Appeals) preferred subsequent appeal to the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"). By an order dated December 31, 2001, the Tribunal set aside the decisions on the issue of depreciation on the meters and sent the same for fresh decision to the file of the Assessing Officer. The issue of expenses incurred on account of foreign travel undertaken by Mrs. J. Thapar was also directed to be heard after considering all relevant facts and materials. Incidentally, the Revenue also filed cross objections against the order of the Commissioner of Income-tax (Appeals) for the above relief granted by him. This was dismissed holding the same as being barred by limitation with no satisfactory explanation was given for the delay in filing the cross objection.
(3.) In this context the relevant ordering portion of the learned Tribunal is required to be reproduced : "Since the Assessing Officer has no occasion to appreciate the case from its proper perspective by taking into consideration or account the aforesaid material papers which are not before the authorities below, we find it proper to set aside this issue regarding disallowing the claim of depreciation to the extent of Rs. 23,71,72,400 out of Rs. 35,10,00,000 to the file of the Assessing Officer with the direction to readjudicate the matter afresh after examining and verifying the reliability and veracity of the aforesaid material papers and documents filed by the assessee before us. The Assessing Officer shall adjudicate the issue whether the assessee has claimed depreciation with reference to enhanced costs with a view to reduce liability to income-tax by taking into consideration the papers and materials placed by the assessee before us and by keeping in view the judicial proceedings cited by the parties before us as referred to above. The assessee shall be at liberty to produce or furnish such other material or papers as it may think fit and proper in support of its claim of depreciation on electric meters. The Assessing Officer shall provide adequate opportunity of being heard to the assessee in this respect.";