2014 (11) TMI 49

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..... d/1991, for the assessment year 1990- 1991 for the opinion of this Court. i) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in holding that depreciation has to be worked out in accordance with Rules prescribed in Schedule XIV of the Companies Act for the purpose of working out the book profit U/s.115J of the Income-tax Act? ii) Whether on the facts and in the circumstances of the case, the Honble Income-tax Appellate Tribunal is justified in holding that the company is not permitted to claim depreciation in accordance with the rates prescribed under the Income-tax Rules, 1962? 2) After hearing the learned Senior Counsel Sri S.R. Ashok for Revenue and learned counsel for responden .....

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..... he rates as prescribed under the Income Tax Rules for the purpose of drawing up the profit and loss account while computing the book profits under Section 115J of the Act. 5) Reasoning of the authorities below is to the effect that only when there is a bona fide technical necessity higher rate of depreciation than specified in the Schedule XIV of the Companies Act can be allowed to be claimed. For coming to the said conclusion the authorities relied on Accounting Standard No.6 issued by the Institute of Chartered Accountants of India. In that view of the matter, the assessing authorities reworked out the depreciation by providing minimum rates of deprecation as provided under the Companies Act in terms of Part-II and III of the Schedule- V .....

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..... e Assessment order, which is the forming part of the record, would fairly concealed that the Assessing Officer had committed an error in redrawing the profit and loss account by making changes by adding depreciation debited to profit and loss account by the assessee, which is impermissible by them in terms of the statute and also in the light of the judgment of the Supreme Court in Apollo Tyres case (1st supra). The fairness on the part of the learned Senior Counsel for the Revenue is highly appreciable. 9) Therefore, in the light of the judgment of the Supreme Court in Apollo Tyres case (1st Supra), the action of the Assessing Officer in redrawing the profit and loss account for the purpose of sub-section 1(a) of 115J of the Act, is total .....

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