1988 (10) TMI 98 - AT - Income Tax

Summary

Issues:
- Jurisdiction of CIT to revise assessments under section 263 of the IT Act, 1961.
- Allowance of depreciation at 30% on rigs used in business.

Jurisdiction of CIT to revise assessments:
The appeals by the assessee were against the common order passed by the CIT under section 263 of the IT Act, 1961. The CIT contended that depreciation at 30% on rigs was admissible only in mineral oil concerns, not in any other business. The assessee argued that the CIT did not have jurisdiction to revise the assessments as the ITO's finding was in line with Tribunal decisions. The Tribunal held that the CIT's assumption of jurisdiction was not necessary to decide as they consistently held that the assessee was entitled to depreciation at 30% based on previous Tribunal decisions.

Allowance of depreciation at 30% on rigs used in business:
The Tribunal referred to a previous decision in Fist ITO vs. Popular Borewell Service, where it was established that the assessee is entitled to depreciation at 30% on rigs. The Tribunal analyzed technical information and factual details to determine that the drilling equipment used by the assessee fell under item D(4) of the Depreciation Schedule, allowing for depreciation at 30%. The Andhra Pradesh High Court also supported this view, emphasizing that the description under item D(4) is illustrative, not exhaustive. The Court upheld the Tribunal's decision, stating that the drilling equipment used by the assessee qualified for depreciation at 30%. Consequently, the appeals of the assessee were allowed based on the merit of the depreciation claim.

In conclusion, the Tribunal affirmed the allowance of depreciation at 30% on rigs used in the business, based on the technical classification of the drilling equipment and previous Tribunal decisions. The jurisdiction of the CIT to revise assessments was deemed unnecessary as the merit of the depreciation claim was upheld.