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TMI Blog1991 (12) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the assessee to close its accounts on 30th June subject to the condition that there will not be any skipping up of any assessment year, that for the assessment year 1984-85 income earned for the period of twelve months from 1-4-1983 to 31-3-1984 would be assessed to tax and for the assessment year 1985-86 the income earned for the period of three months from 1-4-1984 to 30-6-1984 would be assessed to tax. A further condition imposed was that although depreciation for assessment year 1984-85 would be 100 per cent, depreciation for the assessment year 1985-86 i.e., for three months period would only be 3/12th of normal depreciation admissible. According to the Income-tax Officer, who passed the assessment order in the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missible only at reduced rates. 14. In view of the decisions cited above, I would direct the Assessing Officer to permit the entire normal depreciation admissible for assessment year 1985-86 and not to restrict it to 3/12th. " Hence the present appeal by the Revenue. 4. The Departmental Representative contended that the CIT(Appeals) failed to note that in the instant case the equitable rule of estoppel will clearly apply since the assessee has accepted the condition imposed by the ITO and the ITO has acted on it. It cannot be open to the assessee to claim that the condition imposed by the Income-tax Officer be vacated. The Madras High Court's decision in the case of S. Manickam Chettiar v. ITO [1976] 104 ITR 283 will squarely apply. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Synthetics Ltd. v. O.S. Bajpai, ITO [1976] 105 ITR 864 at page 878 as under : " It is argued on behalf of the respondents that the company had accepted the conditions voluntarily and with eyes open and it should not be allowed to challenge their validity. This is not a correct proposition. It is well settled that there is no estoppel against law. The ITO is authorised to impose only valid conditions and if the conditions imposed by him turn to be invalid, they can be challenged and struck off. " The decision of the Supreme Court in the case of CIT v. V. MR. P. Firm [1965] 56 ITR 67 is also very apt and relevant. It was held therein that, " The Doctrine of 'approbate and reprobate' is only a species of estoppel ; it applies only to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12/12 depreciation is against the provisions of the Act and hence not applicable. Where the provisions of a Statute are involved, it is not open to the parties to enter into any contract which will in effect circumvent the said provisions in the Statute. 6. We have considered the rival submissions. It is true that the Assessing Officer while granting permission to the assessee to change its accounting year imposed a condition that depreciation for the assessment year 1985-86, i.e., for the three months period (from 1-4-1984 to 30-6-1984) will be 3/12. The said condition was agreed to by the assessee. But at the time of assessment for the assessment year 1985-86 the assessee claimed depreciation of 12/12 instead of 3/12. Under section 32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid decisions of the Supreme Court, we hold that the assessee is well within its rights to claim depreciation of 12/12 in spite of the condition imposed by the Assessing Officer the depreciation was allowable at 3/12 only at the time of granting permission for changing the accounting year and the assessee's agreeing for the same. The CIT(Appeals) is, therefore, justified in directing the ITO to grant depreciation at full rates as against the period of three months. 7. The decision of the Madras High Court in the case of S. Manickam Chettiar referred to above is distinguishable. In that case, the assessee Viswanathan Chettiar wanted a Tax clearance certificate for returning to Ceylon. The ITO did not permit the assessee to leave India if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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