COMMISSIONER OF INCOME TAX Vs. BRAHMAPUTRA STEEL P LTD

JUDGEMENT

(1.) The appeal was admitted on the following questions of law -

(2.) Thus, this court is called upon to adjudicate the question of law whether the assessee has not furnished the details of the pre-operative expenses for the period from 1.4.88 to 12.7.88 and thus is not entitled for the depreciation and investment allowance for the said period. While considering income of the assessee for the assessment year 1989-1990 the Income Tax Officer has allowed the depreciation on pre-operative expenses of Rs. 10,65,827/ - whereas the depreciation and investment allowance has not been given for the period 1.4.88 to 12.7.88 on the ground that the assessee has not furnished the relevant materials before him. Aggrieved by the disallowance of the depreciation and investment allowances for the period 1.4.88 to 12.7.88 the assessee approached the appellate authority by filing an appeal. The appellate authority, after considering the submissions made by the counsel for the assessee and the records placed before the assessing authority, reached the conclusion that the assessee is entitled to depreciation allowance and investment allowance for the period 1.4.88 to 12.7.88 for pre-operative expenses of Rs.13,36,441/- and accordingly allowed the appeal. The Apex Court in the case of Challapalli Sugars Ltd. vs. Commissioner of Income Tax, A.P., reported in (1975) 98 ITR (SC) 167, has laid down the law that the assessee is entitled for depreciation and investment allowance till the commencement of production. Admittedly the production has commenced on 13.7.88. As per the decision of the Apex Court the assessee would be entitled for depreciation and investment allowance on Rs.24,02,268/-. This allowance was denied to him only on the ground that the relevant materials had not been placed by the assessee. The counsel appearing for the assessee has pointed out that the written submission has been made before the Commissioner of Income Tax which clearly indicates that the details of the pre- operative expenses incurred by the assessee were placed before the assessing authority for the period 1.4.88 to 2.7.88 and thus the Income Tax Officer was not correct in coming to a conclusion that the assessee having not furnished the details for the said period is not entitled for claiming the relief. The Commissioner (Appeals) as well as the Income Tax Appellate Tribunal has upheld the contention raised by the assessee that he is entitled for depreciation and the investment allowance till the period he has commenced the production. This finding has been arrived at on the basis of the fact that both the authorities were satisfied that the assessee has furnished relevant materials on the basis of which he was claiming the depreciation and investment allowance for the period 1.4.88 to 12.7.88 and not only for the period upto 31.3.88. On the submissions made before us we are also satisfied that the relevant materials have been placed before the Income Tax Officer for claiming the depreciation and investment allowance and the Income Tax Officer has committed an error in not considering it

(3.) In view of the above, the judgment and order dated 28.2.2001 rendered by the Income Tax Appellate Tribunal, Guwahati Bench in ITA No. 132(Gau) of 1994 is in accordance with law. The appeal stands dismissed. There shall, however, be no order as to costs.