2013 (3) TMI 880 - HC - Income Tax

Summary

Issues:
1. Re-computation of interest offered in earlier years and setting off against current year's income.
2. Allowing expenditure claimed under Section 35D of the I.T. Act.
3. Deletion of disallowance made on account of depreciation claimed on certain assets.
4. Disallowance of depreciation claimed on leased assets.

Analysis:

Issue 1:
The Tribunal remanded the issue of re-computation of interest to the Assessing Officer, and the High Court declined to interfere with this decision.

Issue 2:
Regarding the expenditure claimed under Section 35D of the I.T. Act, the Tribunal directed the benefit to be granted based on the principle of consistency. The Tribunal noted that the claim had been allowed in previous years without dispute, and therefore, it could not be suddenly disallowed. Citing a previous court decision, the Tribunal upheld the claim, emphasizing the importance of maintaining consistency in such matters.

Issue 3:
The Tribunal deleted the disallowance made on account of depreciation claimed on certain assets. It observed that the transactions were not merely financial arrangements, and the assessee was entitled to the depreciation benefits. The Tribunal emphasized the rule of consistency and directed the Assessing Officer to allow the claim, as it had been granted in previous years without challenge.

Issue 4:
The issue of disallowance of depreciation claimed on leased assets was also addressed by the Tribunal. It noted that the assessee had not relinquished its interest in the leased equipment, and therefore, the claim was justified. Relying on the rule of consistency and previous court decisions, the Tribunal allowed the claim and directed the Assessing Officer to do the same.

In conclusion, the High Court dismissed the Tax Appeal, upholding the decisions of the Tribunal regarding the re-computation of interest, allowance of expenditure under Section 35D, deletion of disallowance on certain assets' depreciation, and disallowance of depreciation claimed on leased assets. The judgments were based on the principles of consistency and previous practices in granting such claims.