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Issues:
1. Adjustment of depreciation debited in the profit and loss account due to change of method. 2. Dispute regarding computation of liability under section 115J. 3. Condonation of delay in filing Revenue's appeal. 4. Disallowance of rent and taxes paid for a guest house under section 37(4). Issue 1: The dispute in the appeal revolves around the adjustment of depreciation debited in the profit and loss account resulting from a change in the method of depreciation from straight line to the written down value method. The Assessing Officer contended that depreciation related to earlier years cannot be debited in the profit and loss account, calling for an adjustment to compute the income chargeable to tax under section 115J of the Act. The Commissioner of Income-tax (Appeals) upheld this decision, stating that the change in the method of depreciation, even for earlier years, was impermissible under the Companies Act. The Tribunal, however, found that the claim of the assessee was supported by various decisions, directing the Assessing Officer to allow the claim of the assessee based on precedent cases. Issue 2: The disagreement also pertained to the computation of liability under section 115J. The Commissioner of Income-tax (Appeals) rejected the assessee's contention that changes in the accounts were permissible under the Companies Act, emphasizing that the assessee cannot reopen its books of account, especially when approved by shareholders. However, the Tribunal referred to previous cases where it was held that the net profit shown in the accounts, after adjustments, should represent the book profits, and the Assessing Officer cannot substitute his own figure. Hence, the Tribunal directed the Assessing Officer to accept the claim of the assessee. Issue 3: The Revenue's appeal was found to be time-barred by 164 days. A petition for condonation of delay was filed, attributing 155 days to misplaced records. The Tribunal declined to condone the delay, citing lack of satisfactory explanation by the Revenue. Moreover, the issue regarding the disallowance of rent and taxes paid for a guest house under section 37(4) was addressed, with the Tribunal referring to relevant court decisions and provisions to support the assessee's position. The assessee's appeal was allowed, while the Revenue's appeal was dismissed. In conclusion, the Tribunal's judgment resolved the issues related to the adjustment of depreciation, computation of liability under section 115J, condonation of delay in filing the Revenue's appeal, and the disallowance of rent and taxes paid for a guest house under section 37(4), providing detailed analysis and referencing relevant legal precedents and provisions.
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