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TMI Blog2015 (10) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... on energy saving devices was wrongly allowed. Accordingly, he issued a notice u/s 148 of the Act on 25/03/2010, in response to which, a letter was filed by assessee stating therein that the return originally filed may be treated as return filed in response to the notice u/s 148. In the assessment completed u/s 143(3) read with section 147 vide order dated 31/12/2010, the AO concluded that assessee could not claim depreciation at 80% on the energy saving devices as per the provisions of Rule 5(1) as it had not exercised option under the second proviso to Rule 5(1A). Accordingly, he restricted the claim of assessee for depreciation on energy saving devices at 8.24% (Rs. 2,20,60,521) as against 80% (20,53,82,364) claimed by assessee. 3. On appeal, ld. CIT(A) reversed the order of the AO on this issue and allowed the claim of assessee for depreciation @ 80% on energy saving devices following, inter-alia, the decision of Chennai Bench of ITAT in case of KKSK Leather Processors (P) Ltd. Vs. ITO, 130 TTJ 184. Aggrieved by the order of ld. CIT(A), the revenue has preferred the appeal before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, it is pertinent to note, though the second proviso to Rule 5(1A) speaks of exercise of option by the assessee but it does not prescribe any mode and manner for exercising such option. Neither learned DR could point out nor we are able to locate any other provision either in the Act or in Rules laying down the mode and manner of exercising option in terms of second proviso to Rule 5(1A). Therefore, in the absence of any mode or manner for exercising option, the only way available to assessee to exercise option is to compute depreciation in accordance with Appendix - 1 in the accounts and claim it in the return of income filed u/s 139(1). . It is not in dispute that assessee, in fact, has exercised option in claiming depreciation as per Appendix - 1 not only in AY 2003- 04, but, also in subsequent assessment years including the impugned assessment year. Third proviso to Rule 5(1A) also makes it clear that once assessee exercises its option in terms of second proviso to Rule 5(1A) the same will apply even to the subsequent AYs. The ITAT, Chennai Bench in case of KKSK Leather Processors (P) Ltd. Vs. ITO (supra), while considering identical nature of dispute relating to exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore due date simply refers and means that not after the expiry of due date. If the requisite act is done before the last day expires then it will simply be said that before due date. When the time of filing the return is available to the assessee till the last moment of the due date then the whole of that day is available to the assessee and due date expires 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. In the case of CIT vs. Vijaya Hirasa Kalamkar (HUF) (supra), the Hon'ble Bombay High Court has held at pp. 774 and 775 as under : "Having regard to the object of the Ordinance and the words used in s. 3(1), it seems to us that the declaration received on 1st Jan., 1976, was well within time. In the whole context, the word 'before' will have to be construed as 'upto' or as 'not after'. There are various provisions in the IT Act, wherein the expression 'before' has been used [ss. 139(1)(a)(i), s. 139(1)(b); s. 184, s. 212]. The expression has always been taken to mean 'upto'. Sec. 3 specified the period before which a declaration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the said requirement cannot be considered as mandatory. Moreover the AO cannot act on the option exercised before the return is filed and therefore no fruitful purpose or object can be achieved by mandating exercise of option prior to filing of return on due date." 10. While affirming the aforesaid view expressed by ITAT, the Hon'ble Madras High Court, in judgment dated 09/09/14 in case of CIT Vs. M/s Kikani Exports Pvt. Ltd. and others held as under: "20. A reading of the above said decision of the Bombay High Court makes it clear that if the assessee exercised the option in terms of second proviso to Rule 5(1A) of the Income Tax Rules at the time of furnishing of return of income, it will suffice and no separate letter or request or intimation with regard to exercise of option is required. Since the returns are filed in accordance with section 139(1) of the Income Tax Act and the form prescribed therein make a provision for exercising an option in respect of the claim of depreciation, no separate procedure is required, as contended by the Department. We are in agreement with the reasoning of the Tribunal ." 11. The ratio laid down by the ITAT Chennai Bench, which was c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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