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Issues Involved:
1. Excess allowance of depreciation on increased value of assets due to foreign currency fluctuations. 2. Excess grant of refund u/s 244A due to late filing of return. Summary of Judgment: Issue 1: Excess Allowance of Depreciation The petitioner challenged the notice issued u/s 263 of the Income-tax Act, 1961, by the Commissioner of Income-tax on the grounds of excess allowance of depreciation on increased value of assets due to fluctuations in foreign currency rates. The petitioner argued that the Assessing Officer's order was in consonance with the law, citing the Supreme Court decision in CIT v. Arvind Mills Ltd. [1992] 193 ITR 255 and other High Court decisions, which held that depreciation is to be allowed on the fluctuation added cost. The court observed that the Commissioner had accepted this view for the assessment year 1989-90 but issued a contradictory notice for the subsequent year. The court reiterated that the law laid down by the apex court and High Courts is binding on the authorities, and the Assessing Officer's order was not erroneous as it followed these decisions. The court emphasized that judicial discipline requires following the decisions of higher authorities, and the Commissioner's notice was invalid. Issue 2: Excess Grant of Refund u/s 244A The petitioner also challenged the notice regarding the excess grant of refund u/s 244A due to the late filing of the return. The court found the notice vague as it did not specify the reasons for the delay attributable to the assessee. The court highlighted that u/s 244A(2), the Assessing Officer must determine the period of delay attributable to the assessee, and the notice failed to provide such details. The court concluded that the notice was vague and lacked material evidence to support the claim of delay caused by the assessee. Conclusion: The court quashed and set aside the impugned notice at annexure "C" and made the rule absolute, with no order as to costs.
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