1990 (9) TMI 128 - AT - Income Tax

Summary

Issues:
1. Validity of assessment for the assessment year 1981-82 based on the limitation period.
2. Depreciation allowance for a weighing machine.

Analysis:

Issue 1: Validity of assessment for the assessment year 1981-82 based on the limitation period

The appellant contended that the assessment for the year 1981-82 was invalid due to exceeding the specified 180-day period between the forwarding of the draft assessment order to the assessee and receiving directions from the IAC. The argument was based on clause (iv) of Explanation 1 to section 153, which sets a time limit for the IAC to provide directions under section 144B. However, the Tribunal rejected this argument, stating that the time limit under section 153 for completing assessments is two years from the end of the relevant assessment year. Explanation 1, including clause (iv), provides exceptions to this rule. The Tribunal clarified that clause (iv) does not impose a time limit on the IAC but extends the assessment period by 180 days for the assessing officer to obtain directions and complete the assessment. The Tribunal cited precedents to support this interpretation, emphasizing that the 180-day extension is for the assessing officer's benefit, not a constraint on the IAC's powers. Therefore, the Tribunal held that the assessment order, passed within the extended period, was valid.

Issue 2: Depreciation allowance for a weighing machine

The appellant challenged the CIT (Appeals) decision to allow depreciation at 10% instead of the claimed 15% for a weighing machine due to its exposure to corrosive chemicals. The appellant argued that the machine qualifies for 15% depreciation as per relevant guidelines. However, the Tribunal noted the lack of evidence supporting this claim and upheld the CIT (Appeals) decision. The Tribunal found no reason to intervene in the depreciation allowance determination and rejected the appellant's argument.

In conclusion, the Tribunal upheld the validity of the assessment for the assessment year 1981-82, dismissing the challenge based on the limitation period. Additionally, the Tribunal affirmed the depreciation allowance decision for the weighing machine, finding no grounds to overturn the CIT (Appeals) ruling.