2014 (8) TMI 422 - HC - Income Tax

Depreciation on assets disallowed Outside the block period, a regular assessment order was passed in respect of the assessment year 1997-98 where the assessee had claimed depreciation - Tribunal allowed the claim of depreciation - Held that - The Tribunal while following the decision as given in earlier assessment year of the same assessee have granted the benefit - assessee has substantiated his claim for depreciation - the assessee has established his claim for depreciation, there was no justification to interfere with the finding of fact no substantial question of law arises for consideration Decided against Revenue.

Summary

Issues:
1. Disallowance of depreciation in block assessment order.
2. Appeal against the order of the Income-Tax Appellate Tribunal.
3. Disallowance of depreciation in regular assessment for the assessment year 1997-98.
4. Grant of depreciation for the assessment year 2001-02.
5. Concurrent findings of fact regarding depreciation claim.

Analysis:

1. The High Court addressed the issue of disallowance of depreciation in the block assessment order. The assets claimed by the assessee were initially held to be not genuine, resulting in the disallowance of depreciation related to those assets. However, the Tribunal set aside the assessment order on the grounds of limitation. The Revenue challenged this decision, leading to a reference under Section 260-A of the Income Tax Act. The High Court noted that the matter is pending before the Apex Court after setting aside the Tribunal's order.

2. In the regular assessment for the assessment year 1997-98, the assessee claimed a significant amount of depreciation, which was disallowed. The Appellate Authority upheld this decision. However, the Tribunal, in a separate order, allowed the claim of depreciation for the same assessment year. Subsequently, for the assessment year 2001-02, the Assessing Authority initially declined to grant depreciation of a specific amount. Both the First Appellate Authority and the Tribunal, following the precedent set in the earlier judgment, granted the benefit of depreciation to the assessee for the year 2001-02.

3. The High Court emphasized that when there is a concurrent finding of fact that the assessee has substantiated the claim for depreciation, there is no justification to interfere with such a finding. In this case, both the Appellate Authorities concluded that the assessee had established the claim for depreciation for the assessment year 2001-02. As a result, the High Court dismissed the appeal without addressing the substantial question of law framed in the appeal, as no substantial question of law was found to arise for consideration based on the established facts and findings.

This detailed analysis of the judgment highlights the various issues surrounding the disallowance and grant of depreciation in different assessment orders and the significance of concurrent findings of fact in determining the outcome of the appeal.