9911796707
TMI Blog2008 (12) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... e refusal of the Assessing Officer to accept the change in method of accounting system from cash to mercantile with retrospective effect? (2) Whether the ITAT was right in law and on facts in reversing the order of the CIT(A) deleting the disallowance of Rs.26,60,22,204/- out of depreciation claimed? 2. The Assessment Year is A.Y.2003-2004, the relevant accounting period being Financial Year ended on 31st March, 2003. It is an accepted fact that respondent-assessee was constituted under National Dairy Development Board Act, 1987, with effect from 12.10.1987. Section 44 of the Income Tax Act, 1961 ( the Act), as it stood upto 31.3.2003, reads as under: 44. Notwithstanding anything contained in the Income-tax Act, 1961 or any other enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the relevant accounting period. 4. On behalf of the appellant, learned advocate read extensively from the assessment order and the order of Commissioner (Appeals) to submit that the Tribunal had failed to appreciate that the Assessing Officer was within his right in exercise of powers under Section 145(3) of the Act and thus bring to tax the amount which was escaping tax net. It was submitted that as the assessee was not liable to be taxed upto 31.3.2002, the Resolutions of the Board of the assessee changing the system of accounting even for the period between 1.4.2001 to 31.3.2002 would indicate that the change had been undertaken only for the purposes of not paying tax on the interest received during the year under consideration. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to state that the same would escape tax as the same was admittedly income of the earlier year and the assessee was not liable to tax by virtue of Section 44 of the Act, as it then stood. 6. In light of the aforesaid findings recorded by the Tribunal, it is apparent that the Tribunal has recorded findings of fact after appreciating the evidence on record. Whether a change in the method of accounting is bona fide or not has to be examined in light of the facts and evidence on record and the Tribunal has applied the correct principles laid down by this Court to the facts found. The Tribunal is justified in holding that the action of respondent-assessee in changing the method of accounting with effect from 1.4.2001 cannot be read to mean tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually allowed as used in Section 43(6) of the Act had to be understood as actually allowed or allowable and on analogy of provisions of Sections 10A and 10B of the Act, the depreciation had to be worked out at a notional basis. The Commissioner (Appeals) also upheld the order made by the Assessing Officer by holding that for the period since inception in 1987 upto 31.3.2002, the original cost of assets had to be reduced by the amount of actual wear and tear of the assets and literal meaning of the words actually allowed cannot be granted. 8. Learned advocate for the appellant has assailed the impugned order of Tribunal wherein the Tribunal has held that the written down value of the assets has to be taken at their original cost and no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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