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TMI Blog1990 (8) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... th the authorities cited. In exercise of the powers conferred by sec. 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes made rules by way of amendment of the Income-tax Rules, 1962. in this regard, Notification No. S.O. 562(E) datedJuly 24, 1980was issued. This can be found at Page I Statutes of 126 ITR. rules are called Income-tax (Fifth Amendment) Rules, 1980. The notification records that, "they shall come into force at once". Earlier depreciation on motor lorries was provided at the rate of 30% but under these rules, the depreciation will be at rate of 40%. The assessee -derives income from transport and, therefore, claim enhanced rate of Appreciation to be allowed to him for the asst. year 1980-81 for which the return was filed on12-5-1980. This claim of the assessee was negatived by the ITO but the learned CIT(A) allowed the claim. Hence, the appeal I from the revenue. 3. It is now well settled that the law as on the Ist day of April of any asst. year should govern the asst. for that year. However, this proposition of law is not absolute and is subject to qualification by any expressed provision or necessary implication, as held by the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... check. 6. Therefore, on the facts and circumstances of the case, we are of the opinion that the view taken by the CIT(A) is fully justified and warrants no interference at our hands at the instance of the revenue. The appeal of the revenue dismissed. Per S.S. Mehra, J.M. --- The draft order prepared by the learned A.M. has carefully been gone into. However, it is regretted that I could not persuade myself to agree with the conclusion arrived at. 2. The facts by and large have been incorporated in the order. The main issue for determination is whether the assessee was entitled to the benefit of the notification dated24-7-80. Earlier depreciation rate was 30% on lorries whereas from the above date it was raised to 40%. 3. The assessee's accounting period expired on31-3-80. The notification is dated24-7-80. It came in force at once. It may not be out of place to mention that notification ushered in a substantive provision. A right was conferred on assessee, to claim higher depreciation from the date of notification. It has not been the intention that the notification had effect from back date. It was thus relevant only from24-7-80. The law pertaining to procedure could appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by section 295 of the Income-tax Act, 1961 the Central Board of Direct Taxes made rules by way of amendment of Income-tax Rules, 1962 and issued a Notification No. S.O. 562(E) dated 24th July, 1980 which is published at page I Statutes of 126 ITR. The notification states that these rules shall come into force -at once. Earlier depreciation on motor lorries was allowable at the rate of 30% but under these rules the depreciation has to be allowed at the rate of 40%. The assessee being a transporter claimed depreciation at the enhanced rate of 40% in respect of vehicles even for the assessment year 1980-81, the return for which was filed on12-5-1980. The Income-tax Officer negatived the assessee's claim but it was allowed by the Commissioner (A), aggrieved by which the department filed a second appeal before the Tribunal contending that this notification providing for enhanced rate of depreciation was not available for the assessment year 1980-81 and had come into force only from the assessment year 1981-82. 3. The learned Accountant Member took the view that since it was the settled law that the law as on the Ist day of April of any assessment year should govern the assessment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the following words : Whether on the facts and in the circumstances of the case, the assessee is, entitled to depreciation at the rate of 40% on motor transport vehicles for the assessment year 1980-81 in view of the Notification dated 24-7-1980 in terms of Income-tax (Fifth Amendment) Rules, 1980 ?" 5. Notification No. S.O. 562(E) dated24-7-1980published on the same day in the Gazette of India states : "In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely :--- I. (1) These rules may be called the Income-tax (Fifth Amendment) Rules, 1980. (2) They shall come into force at once. 2. In Part I of Appendix I to the Income-tax Rules, 1962, in the Table of rates at which depreciation is admissible, in column 1, under the heading "III. Machinery and Plant (not being a ship) ---", under the sub-heading "(ii) Special rates :---" (a) in Group D, for item (9), the following item shall be substituted, namely :--- '(9) Motor buses and motor lorries other than those used in a business of running them on hire (N.E.S.A.)' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciple is worked its way, then the date of 24-7-80 falls in the assessment year 1981-82 and since the income is to be computed with effect from 1-4-80 onwards to 31-3-81, the effect of this notification must be given for the income that accrues in this period, which means that the benefit of the notification must be given with effect from 1-4-1980. Both the learned Members have agreed on the principle that the notification is substantive in nature, beneficial too and not procedural and that the law to be applied in the assessment year. to make the assessment for that year is the law available on the Ist day of the assessment year. As I have pointed out above, the learned Judicial Member was of the view that this notification which was issued on 24-7-80 could not be related back to the date of 1-4-80 and therefore it could not be said to be in existence on that date, whereas the learned Accountant Member pointed out that it must be related back to the date of 1-4-1980 because the assessment year starts from that day, and not from the date of 24-7-1980. I see no justification and good logic in the view expressed by. the learned Judicial Member. A somewhat similar situation had come ..... X X X X Extracts X X X X X X X X Extracts X X X X
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