2008 (9) TMI 1003 - HC - Income Tax

Summary

Issues involved:
The issues involved in the judgment are:
1. Whether the Tribunal erred in law in holding that the Commissioner of Income Tax was not justified in invoking the jurisdiction u/s 263 without considering the erroneous allowance of depreciation on plant and machinery installed after 1.4.2002?
2. Whether the Tribunal failed to consider that additional depreciation introduced by Finance Act, 2002 was to be allowed only for assets acquired and installed after 1.4.2002, and thus the additional depreciation wrongly allowed by the Assessing Officer?

Issue 1: Jurisdiction u/s 263
The Court admitted the appeal and referred the substantial question of law regarding the Commissioner of Income Tax's jurisdiction u/s 263. The Tribunal's decision was questioned on the grounds that the Assessing Officer erroneously allowed depreciation on plant and machinery installed after 1.4.2002, amounting to a significant sum. The issue at hand was whether the Commissioner was justified in invoking the jurisdiction u/s 263 without considering this error.

Issue 2: Additional Depreciation
The second issue raised in the judgment pertained to the Tribunal's alleged failure to consider the provisions of the Finance Act, 2002 regarding additional depreciation. It was argued that the additional depreciation was to be allowed only for assets acquired and installed after 1.4.2002. Despite the assets being purchased before this date, it was contended that they were installed after 1.4.2002, leading to the erroneous allowance of additional depreciation by the Assessing Officer.

The Court directed the preparation of a paper book by the appellant to be served upon the respondent within four weeks after vacation. The appeal was scheduled to appear six weeks after vacation. All parties were instructed to act on a xerox signed copy of the order, and an urgent xerox certified copy of the order would be supplied to the parties upon application, subject to compliance with formalities.