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TMI Blog2006 (2) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... that the circulars are binding on the Department and it is not open to the Department to raise a contention which is contrary to the circulars and instructions validly issued by the Board. The Revenue authorities were therefore not correct in restricting the depreciation to the extent of 50 per cent. - - - - - Dated:- 6-2-2006 - Judge(s) : P. D. DINAKARAN., P. P. S. JANARTHANA RAJA. JUDGMEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, declaring total income of Rs. 5,21,180. The return was processed under section 143(1)(a) on December 8, 1993. Later, the case was taken up for scrutiny on December 6,1993. During the year, the assessee-company purchased two electrical yarn cleaners in January 1992 and February 1992 and claimed 100 per cent, depreciation on those assets valued at Rs. 13,61,704. According to the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to section 32(1) would operate. Here the issue is related to the question that if the individual worth of the asset is less than Rs. 5,000, whether restriction as contemplated in the relevant proviso to section 32 in regard to the 50 per cent, allowability would apply in the facts of the case. The relevant proviso to section 32 reads as under: "Provided further that where an asset referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual cost thereof shall be allowed as a deduction without any restriction, in respect of the previous year in which the machinery or plant is first put to use by the company for the purpose of its business or profession." It is to be noted that the first proviso to section 32 was omitted by the Finance Act, 1995 with effect from April 1, 1996. Prior to the omission, the first proviso as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular referred to above. The Supreme Court in the case of UCO Bank v. CIT reported in [1999] 237 ITR 889, held that the circulars are binding on the Department and it is not open to the Department to raise a contention which is contrary to the circulars and instructions validly issued by the Board. The Revenue authorities were therefore not correct in restricting the depreciation to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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