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TMI Blog2012 (10) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation and the AO has incorrectly restricted it to 7.69%. The AO is therefore directed to allow the enhanced rate of depreciation to the appellant. The appeal of the appellant is therefore allowed - in favour of assessee. - ITA No.923/Mds/2012 - - - Dated:- 11-7-2012 - Dr. O. K. Narayanan and Shri V. Durga Rao, JJ. Appellant by : Shri K.E.B. Rengarajan, Jr. Standing Counsel ORDER PER V. DURGA RAO, JUDICIAL MEMBER: This appeal by the Revenue for the assessment year 2006-07 is against the order passed by the CIT (Appeals)-V, Chennai dated 30-01-2012. 2. Facts in brief are that the assessee filed a return of income declaring NIL income. The return was processed initially u/s 143(1) of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The relevant portion as extracted by the learned CIT(A) in his order is reproduced hereunder : As per clause (i) of sub-section (1) of section 32, the depreciation on the assets of an undertaking engaged in generation or generation and distribution of power is, at a percentage as prescribed as per rates on the actual cost thereof. Thus, clause (i) of sub-section (1) of section 32 provides the depreciation at a prescribed rate on the assets of specified undertaking on the actual cost instead of written down value. The Explanation 5 to sub-section (1) of section 32 makes it clear that the provisions of sub-section (1) of section 32 shall apply whether or not the assessee has claimed the deduction in respect of depreciation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1) of section 32. Therefore, the provisions contained in the rules cannot override the provisions contained in the statute and the requirement of option under proviso to rule 5(1A) cannot be held in the nature that the failure of the same would be so fatal that the very object of the provision for providing higher rate of depreciation is defeated. Where there is no specific form or method prescribed for exercising the said option, then the claim made in the return of in come as well as reflected from the books of account and audit report filed along with return of income is more than the exercise of the option as required under second proviso to rule 5(1A). (Para 7). Therefore, even if option is not exercised within the stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only when the last day is expired. As such the option exercised on the due date is nothing but before the due date as the same is not after the due date. Therefore, it can be said that the option exercised by the assessee on due date by way of making claims of depreciation in the return of income along with audit report and books of account wherein the assessee has adopted the rate as claimed is within time-limit prescribed under second proviso to rule 5(1A). The limit provided under the second proviso to rule 5(1A) is only to facilitate the Assessing Officer in discharging its obligations and duties as per the provisions of sub-section (1) of section 32. Therefore, the said requirement cannot be considered as mandatory. Moreover, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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